Despite the current economic uncertainty, 72 percent of high technology industry leaders in the United States, Canada, and Western Europe have plans to grow revenue in 2023, according to the latest worldwide market study by Gartner.
Furthermore, nearly half of those tech industry leaders believe they will be able to outperform their competition this year, as the upside opportunities for cloud and SaaS vendors continue to grow.
Business Technology Market Development
Gartner conducted a survey in the second half of 2022 to understand how economic turbulence poses challenges to general managers, how confident they are in their ability to achieve their plans, and the measures planned to tackle the uncertainty.
"Outperforming the market through an uncertain market requires an above average ability to execute on revenue ambitions," said Mark McDonald, vice president at Gartner.
Moreover, the Gartner survey results indicate that almost half of the firms (46 percent) do not have a sufficient ability to execute and reliably realize their company's revenue goals.
The survey also found that many technology leaders entered 2023 prepared for a potential recession. That's driving market caution.
Paradoxically many of the actions taken concentrated on reducing costs rather than focusing on growing revenue and market relevance. Therefore, their actions don't always follow their aspirations.
Meanwhile, Gartner forecasts overall information technology (IT) spending will grow by 2.4 percent in 2023, with enterprise IT spending projected to grow by 4.1 percent.
According to the Gartner assessment, the context of IT spending is changing as buyers increasingly value and make investments in 'business outcomes' rather than buying product-based solutions.
"Changes in context challenge the relevance of technology solutions. Lower relevance reduces willingness to pay and renew relationships," said McDonald.
Gartner sees relevance as the connection between a provider’s solution and how applicable it is to current customer needs.
That connection exists at every level from the C-level to individual software developers. Without relevance, IT vendor sales cycles extend, and subscription renewals are at greater risk.
Context is a dynamic requiring tech leaders to raise their relevance across three situations -- the now, and whenever context changes in the near term, with the ultimate goal of positioning IT solutions for future growth when economic conditions are more favorable.
"It is up to the IT provider to know when the context changes and to rebuild context through refocusing messaging and repositioning to meet customers where they are," concludes McDonald.
That said, I believe we are witnessing the ongoing evolution of IT vendors' go-to-market (GTM) strategy, and it's all due to the shift of projects toward more digital business transformation initiatives.
Furthermore, buyer enablement has superseded sales enablement as the preferred IT vendor GTM approach that's proven to deliver revenue growth results.
I predict that this Change Management trend will accelerate in 2023 as more vendors struggle to maintain profit margins due to outdated marketing policies and rising sales operation costs.