Gartner Identifies Top Trends Impacting Technology Providers in 2024
Gartner, Inc. has highlighted the top trends that will impact technology
providers in 2024.
“Generative AI (GenAI) is dominating the technical
and product agenda of nearly every tech provider,” said Eric
Hunter, Managing Vice President at Gartner. “The
technology reshapes a tech provider from its growth and product strategy down
to the everyday tools used by its associates. Despite the potential for GenAI
to reshape providers, it is not the only influence facing technology leaders.
There are new points of friction in growth plans, new points of fusion in
marketing and sales, and new relationships opening up to technology and service
providers (TSPs).”
The immediate and long-term implications of these
issues require product leaders to balance between short-term opportunity and
long-term advantage and strategies based on economic recovery or recession.
Gartner’s top trends for 2024 reflect these dualities.
Efficient Growth for High Tech
Significant growth in IT spending over the last
decade benefited high-tech companies. Capturing that growth led high-tech
firms to pursue growth without a full measure of the costs. This is a “growth
at all costs” strategy. High-tech firms anchored their product, organization
and employment plans on a hypothesis of continued strong growth.
As macroeconomic conditions create uncertainty
among buyers and increasing costs of capital shift investor focus to margin
growth, Gartner analysts see a trend toward tech providers focusing on
efficient growth. Efficient growth strategies recognize the value in growing in ways that
strengthen current margins and future revenue opportunities.
New Enterprise IT-Provider Relationships
Increased business and technical demands require
enterprise IT to cover more ground at a deeper level and a faster pace, eroding
enterprise IT’s capacity and capabilities. This creates a trend for product
leaders at tech providers to create new relationships and revenue opportunities
across the enterprise, including expanded provider roles within enterprise IT
and the business, outcome-centric provider-enterprise relationships and
enterprise-wide tier-1 relationships.
Sustainable Business Grows Up
Sustainability efforts and managing the ESG impact
have been unilaterally focused on mitigating internal risk and ensuring
compliance. Product leaders must evolve by embracing double materiality and
holistic leverage of emerging technologies to meet sustainability objectives.
AI Safety
Responsible AI and AI safety are not new concepts,
but the unprecedented rapid development of GenAI technologies has fueled the
discussion around risk management and how to address growing issues such as
content provenance and hallucination. Product leaders must build solutions that
incorporate safety principles with a focus on model transparency, traceability,
interpretability and explainability aspects. Preempting regulatory and
compliance issues will be critical to staying competitive in this vibrant GenAI
market by creating trust.
Rising Buyer Pessimism
Over the past three years, tech providers have
increasingly observed negative sales pipeline effects due to new buyer
behaviors that are colliding with outdated go-to-market (GTM) models. Without
adapting sales and marketing approaches to detect and respond to buyer
pessimism, technology providers will see their own GTM operations decline in
both internal and external perspectives.
Vertical Generative AI Models
While general-purpose models perform well across a broad
set of GenAI applications, they can be impractical for many enterprise use
cases that require domain-specific data. Tech providers must explore
industry-focused models that can be adapted to specific user requirements using
available resources more efficiently. Those failing to do so will face
increased costs and complexity in the creation and leverage of models.
Personalized Marketplace Experiences
Specialized, niche, digital marketplaces are
emerging to help buyers navigate the complexity of procuring, implementing and
integrating solutions. Product leaders who do not offer their services through
personalized digital marketplaces limit their findability for their target
customers. Gartner predicts that
80% of sales interactions between suppliers and
buyers will occur in digital channels by 2025.
Industry Cloud Delivers Growth
Service providers, hyperscalers, ISVs and SaaS
providers are turning to vertical solutions to deliver the customer outcomes
that will drive provider growth. By 2027, Gartner predicts that more than 50%
of tech providers will use industry cloud platforms to deliver business
outcomes, up from less than 5% in 2023.
PLG and Value Converge for Hybrid GTM
Product-led-growth (PLG) focuses on showing value
to product users, creating intent signals that go-to-market (GTM) teams can use
with prospective buyers. But most companies using a PLG GTM have begun to
realize that, in most cases, a 100% self-serve GTM motion isn’t tenable. At
some point, sellers must be involved to convert deals. Buyer needs for business
value and outcome justification — for new or expansion business — will meld PLG
tactics with value management and realization initiatives in hybrid GTM
strategies.
Precision Marketing and Sales
Rapidly evolving technology advances, such as
GenAI, digital buying and the metaverse, are changing how tech providers market
and sell technology. Tech providers failing to adopt new approaches will see
the erosion of overall deal quality combined with the loss of relevance and
limited growth within established accounts.
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