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INSIGHTS / TECH AND SERVICE PROVIDERS / ARTICLE
4 WAYS THE TECH MARKET WILL CHANGE FOR IT COMPANIES IN 2023
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March 08, 2023
Contributor: Lori Perri
Change is constant in the technology market, but Gartner expects four emerging
trends to require a response from all IT companies in 2023.
“No matter the technology segment — software, services, hardware or other
solutions — tech executives and leaders must evaluate the impact of these trends
across their business and determine the required actions,” says Distinguished VP
Analyst Rajesh Kandaswamy.
Gartner identified nine trends as potentially impactful for tech vendors in
2023, but the following four will be the new trends introduced in 2023:
1. More federated enterprise tech buying incorporates more decision makers
outside of IT.
2. Increase in product-led growth strategies, which offer prospects earlier
experience of the product.
3. Rise of digital marketplaces makes it easier for potential buyers to find,
procure, implement and integrate technology solutions.
4. Metaverse technologies incorporated into marketing and CX to build customer
engagement.
Download Now: Your Detailed Guide to 9 Changes in the Technology Market
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HOW TECH MARKET CHANGES IMPACT PRODUCT STRATEGY
The technology market continually evolves to account for:
* The increased reliance of people and enterprises on technology
* The continual emergence of new technologies
* The impact of macro forces, such as growing demands for sustainability
“For tech executives and leaders to capitalize on new opportunities and manage
the threats,” says Kandaswamy, “they must engage with executive leaders across
finance, marketing, sales, operations and other areas to craft their
strategies.”
CHANGE NO. 1: MORE FEDERATED ENTERPRISE TECH BUYING
When more authorized decision makers and influencers come from outside IT, the
focus of purchase decisions shifts to value scenarios and outcomes, rather than
simply technology.
The federated buying model is still immature in many companies, but a 2022
Gartner survey showed that 67% of enterprise-tech decision makers are not in
IT.
To create opportunities tied to this emerging trend:
* Pivot go-to-market strategies from technology-based toward customer-oriented
value scenarios. Demonstrate the customers’ targeted business outcomes in the
context of each of the influencers or buyers in the process.
* Leverage ideal customer profiles (ICPs) to improve your situational awareness
of the customer’s buying approach, and maximize the probability of success
and high-quality deals.
* Build a stronger vendor-client relationship by guiding less experienced
buyers on effective decision-making practices and helping companies build
maturity in the federated buying environment.
CHANGE NO. 2: INCREASE IN PRODUCT-LED GROWTH STRATEGIES
Product-led growth (PLG) strategies put the product front and center by
providing prospects with some form of a product experience to demonstrate value,
before any interaction with sales.
By 2025, Gartner expects PLG to be a standard component of go-to-market
practices for 90%
of SaaS companies (up from 58% today). That will start with self-service product
experiences, and will be driven through aggregated data signals to sales-driven
conversion or expansion plays.
The best outcome is fast growth at a cost lower than traditional top-down
marketing and sales motions. The 2021 Gartner User Influence on Software
Decisions Survey found that more than 50% of free trials/freemiums led to a
purchase. However, success is far from assured; it takes more consideration and
effort than simply introducing a free version of a product into the market.
PLG at scale is data-intensive, encompassing user or buyer awareness and
onboarding, product usage augmented with guidance and help as needed, and
ultimately conversion and expansion based on usage value, and related advocacy
and influence.
The first step is to assess whether PLG is viable or optimal by evaluating the
suitability of the product relative to its intended audience. Issues to
consider:
* Does the product have highly intuitive user experiences?
* Is onboarding easy/fast?
* Can users quickly recognize/capture value (and weigh that value against
cost)?
Listen now: The New Playbook for Technology Providers
CHANGE NO. 3: RISE OF DIGITAL MARKETPLACES
Digital marketplaces are becoming commonplace for tech purchases as buyers,
increasingly nontech ones, are looking for composable and easily consumable
solutions.
By 2026, Gartner expects all major cloud platform and enterprise application
providers will offer business component marketplaces to enable customers’
composable strategies, differentiating by quality, convenience and security.
To capitalize on this trend:
* Evaluate the priority of a marketplace channel for you, by sizing the market
opportunity, including solution fit and assessing your target buyers’
preference.
* Prepare for a shift in tech buying by nontech buyers, by adjusting your
go-to-market strategy to sell through a marketplace that ensures buyers know
about your solution’s compatibility with existing infrastructure and that it
can be easily integrated.
* Prepare to be part of a marketplace to serve target customers, by evaluating
the suitability of existing marketplace or by launching your own marketplace.
CHANGE NO. 4: MORE METAVERSE TECHNOLOGY IN MARKETING AND CX
Metaverse technologies are rapidly gaining traction in areas of marketing for
creating unique experiences, impactful interactions and novel engagement. Tech
product leaders must seize the opportunities now available, to create unique
experiences and elevate their marketing and CX initiatives.
By 2027, a majority of B2C enterprise CMOs will have a dedicated budget for
digital humans in metaverse experiences.
Given the nascent state of metaverse technologies, product leaders must first
determine when and how to take action:
* Evaluate the viability of metaverse technologies, such as large-scale,
multiplayer/multientity virtual spaces, virtual reality (VR) and avatars, in
terms of user and customer reach, and engagement rates of audiences. Look for
areas where metaverse technologies could increase opportunities to engage
uniquely with potential customers, and provide memorable, positive
experiences for existing customers.
* Build a strategy for continuous evaluation, including evaluating potential
partnerships and ecosystem expansion, as these metaverse technologies advance
and converge over the next five to 10 years.
Rajesh Kandaswamy is a Gartner Fellow and a Distinguished VP Analyst. His
primary research areas are artificial intelligence, blockchain and key
technology industry trends. He focuses on how the technologies create business
value, their strategic impacts, the use-cases, the market landscape and the
actions required.
GARTNER TECH GROWTH & INNOVATION CONFERENCE
Join the world’s leading IT and business leaders to get an update on
accelerating tech growth in a new era of transformation and technology trends.
View Conference
Recommended resources for Gartner clients*:
Top Trends for Tech Providers for 2023
Top Tech Provider Trend for 2023: Federated Enterprise Tech Buying
Top Tech Provider Trend for 2023: Product-Led Growth
Top Tech Provider Trend for 2023: Rise of Digital Marketplaces
Top Tech Provider Trend for 2023: Utilizing Metaverse Technologies for Marketing
and CX
*Note that some documents may not be available to all Gartner clients.
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