Middle market cloud strategies are maturing, but may need refinement

For many years, middle market companies have moved infrastructure and assets to the cloud to increase security and enhance process efficiency. However, while the majority of companies are using the cloud in some fashion, many may need to reevaluate strategies to maximize effectiveness and limit potential risks.

In the middle market, the pace of cloud migration has slowed because most companies have already completed their transition. During the years of rapid adoption, many took a giant leap into the cloud, but not all were completely ready or fully understood how to get the most out of the technology.

“What we're seeing right now is a pause where companies realize they need to manage their cloud strategy in a more sophisticated way to get the most out of it and limit potential risks,” says RSM US LLP Director Justin Devine. “Companies might not be getting all the benefits they wanted out of the cloud, so they’re slowing down to figure it out and do it right.”

Q1 2026 RSM US Middle Market Business Index survey data shows how middle market companies balance assets between the cloud and on-premises environments. The greatest share of survey respondents (30%) reported having 21%−50% of their environment operating in the cloud, followed closely by those with 51%−75% in the cloud (28%). For larger middle market companies, the top result (36%) was 51%−75%, while the leading response for smaller companies (27%) was 21%−50%.

However, in many cases, splitting assets between cloud and on-premises environments without a dominant platform can present operational and risk challenges.

“If you have one foot in the cloud and one foot on-premises, you have to worry about both,” says Devine. “You’ve given yourself double duty, but you likely don’t have the budget and resources for that. If you’re not doing one of the two well, that creates a lot of risk.”

Middle market companies have a clear opportunity to commit to one platform and reduce the burden of double costs, double processing and double governance.

In the MMBI survey, respondents cited the following as the leading cloud technologies used to enhance cybersecurity efforts:

In the current threat environment, many companies are concerned about the increasing number of security breaches at cloud providers, highlighting the importance of due diligence when evaluating cloud options.

“Middle market firms need to be sure that their cloud security is as good as or better than their on-premises security,” says Devine. “As the number of cloud breaches rises, the cost for firms is going way up.”

The costs related to cloud deployments are another major consideration for middle market companies. Cloud expenses are rising for many, with potential risk repercussions.

“Cost and security go hand in hand,” says Devine. “You need to be cost conscious with cloud investments so you don't end up in a situation where you're so cost constrained that you can't do security right.”