Midmarket organizations confident to embrace AI

According to Avanade, the top goal for midmarket organizations in 2025 is to use AI tools like Microsoft Copilot to drive new revenue while building a collaborative workplace culture.

While large enterprises continue to focus on improving their GenAI capabilities, midmarket and smaller businesses are still trying to figure out how they can make the most out of the technology. Given the costs involved in developing GenAI use cases, midmarket businesses in particular want to make sure they are making the right calls when investing in AI.

Interestingly, despite cost concerns, a report from Avanade shows that midmarket organizations in Asia Pacific are embracing AI with confidence. Interestingly, the report also revealed that most of these midmarket organizations anticipate returns to fourfold within 12 months.

However, it is not as simple as it seems. There are still many obstacles for midmarket organizations in their AI journey. Gaps in workforce readiness, data governance, and technology infrastructure continue to be key obstacles for midmarket organizations to achieve sustainable returns.

With insights from 4,100 global business and IT decision-makers, key findings from the Avanade Trendlines: AI Value Report 2025 revealed the top goal for midmarket organizations in 2025 is to use AI tools like Microsoft Copilot to drive new revenue while building a collaborative workplace culture.

The report also revealed that 87% of midmarket businesses expect to increase their budgets for GenAI projects by up to 50%. The reason for this is most likely because 85% of these organizations expressed concern over losing competitive advantage without rapid AI adoption. Hence fast-tracking implementation is a top priority.

While the results sound promising, the reality is that nearly half of these midmarket businesses are stuck at business case (48%) or proof of concept (POC) (44%) stage. This problem seems to be common among larger enterprises as well although they are more capable of moving from POCs at a faster rate.

Having the right AI infrastructure

As the interest in using more GenAI among midmarket organizations increases, having the right AI infrastructure to support the foundation of their AI journey is key. The report revealed that 95% of leaders are fast-tracking plans to modernize legacy systems while 76% state that poor data quality and governance inhibits AI progress.

With regulations continuing to ensure proper development of AI, midmarket companies are stepping up investments in data governance with 44% planning to implement new data platforms and 41% setting governance standards. In terms of budget, the focus is also expected to be on data and analytics platforms (27%), automation (17%), as well as security and cyber resilience (15%).

According to Bhavya Kapoor, Avanade’s President for Asia Pacific , the region is a dynamic economic region with its present and future success underpinned by factors such as diverse demographics, regional collaboration, and tremendous potential for high growth.

“Coupled with rapid advancement in AI and the region’s appetite for innovation, mid-market companies in Asia Pacific are at a pivotal juncture of their growth and transformation. With the right partnership and strategic guidance, mid-market companies can leverage technologies like AI to unleash their potential and emerge as the next generation of market leaders and industry titans,” Kapoor added.

Kapoor also mentioned that Avanade has recently introduced seven new AI services that combine Avanade’s industry and technical expertise with Microsoft’s secure, AI-powered platforms and tools to help mid-market organizations in Asia Pacific overcome these business challenges.

Designed with efficiency and agility in mind, the new services provide enterprise-grade innovation and technology at a scale that suits the size and needs of mid-market organizations.

The new services include capabilities to accelerate revenue generation, an AI-powered migration and modernization tool, ERP modernization, Copilot capabilities for business transformation as well as tools to unify threat detection. There are also tools to help midmarket businesses build and modernize AI apps and a unified intelligent data and analytics platform.