Gartner releases key trends impacting technology providers in 2024

#Gartner has released the major trends that will impact technology providers in 2024.

Eric Hunter, executive vice president at Gartner, said: “Generative artificial intelligence (GenAI) is beginning to dominate the technology and product development processes of nearly all technology providers. From growth and product strategy to the tools employees use every day, GenAI is transforming technology. Providers are transformed. But despite its potential, the technology is not the only factor impacting technology leaders. Other factors include new friction points in growth plans and changes in marketing and sales activities. New convergence points, new relationships that technology and service providers (TSPs) can build, etc.” seize short-term opportunities, gain long-term advantages, and strategize based on economic conditions. Gartner’s top trends for 2024 illustrate this dual consideration (see Exhibit 1 for details).

##Figure 1. Gartner’s major trends for technology providers in 2024

Note: The size of each trend circle indicates the impact of that trend on technology providers compared with other trends.

Source: Gartner (February 2024)

High-tech companies will focus on efficient growth

In the past decade, high-tech companies have gained momentum due to the substantial increase in IT spending. Much benefit. However, in order to seize growth opportunities, these companies did not fully consider cost factors when pursuing expansion, resulting in a "growth regardless of cost" strategy. High-tech companies' products, organizations, and employment plans are built on continued strong growth.

As the macroeconomic situation brings uncertainty to buyers and rising capital costs cause investors to begin to focus on profit margin growth, Gartner analysts have found that technology providers are showing a trend of focusing on efficient growth. Implementing an efficient growth strategy shows that high-tech companies recognize the importance of increasing current profit margins and developing future revenue sources while expanding scale.

The new relationship between enterprise IT and providers

As business and technical requirements increase, enterprise IT departments must expand the scope of support, increase the speed and depth of services, and thus As a result, its own resources and capabilities are stretched thin. This opens up new opportunities for product leaders at technology providers, with the potential to build new relationships within customer enterprises and open up new revenue streams. Examples include expanding the provider's role in enterprise IT and business units, establishing results-focused relationships between providers and the enterprise, and becoming a tier one provider for the entire enterprise.

Sustainable Business Growth

In the past, the management and control of environmental, social and governance (ESG) impacts of sustainable development projects and corporate activities only focused on reducing internal risks and ensuring compliance. regulation. Product leaders must keep pace with the times, embrace the principle of simultaneous dual materiality and leverage the full range of emerging technologies to achieve sustainability goals.

AI Safety

Responsible AI and AI safety are not new concepts, but as GenAI technology develops at an unprecedented speed, people are increasingly focusing on risk management and how to solve content sources, hallucinations, etc. Serious issues were discussed lively. Product leaders must build solutions that incorporate security principles, focusing on areas such as model transparency, traceability, explainability, and explainability. In the dynamic GenAI market, addressing regulatory and compliance issues up front to build trust is critical to staying competitive.

Buyer Sentiment Is Increasingly Pessimistic

Over the past three years, technology providers have experienced poor sales performance as their aging go-to-market (GTM) strategies did not align with new buyer behaviors. It’s becoming less and less ideal. If they don't adjust their sales and marketing strategies to detect and respond to buyer pessimism, technology providers' sales performance will continue to decline from both an internal and external perspective.

Vertical GenAI Model

While general models perform well in a variety of GenAI applications, such models may not be suitable for many enterprise use cases that require domain-specific data. Technology providers must explore industry-focused models to more efficiently leverage existing resources to meet specific user needs. Otherwise, the cost and complexity of creating and using the model will increase.

Personalized market experience

Specialized, niche digital trading platforms are emerging to help buyers solve complex problems in the process of sourcing, implementing and integrating solutions. If product leaders do not provide services through such exchanges, it will be difficult to easily connect with target customers. Gartner predicts that by 2025, 80% of sales interactions between suppliers and buyers will be completed through digital channels.

Industry cloud brings growth

Service providers, hyperscale cloud service providers, independent software vendors (ISVs) and software as a service (SaaS) providers are beginning to use vertical solution delivery customer results to drive business growth. Gartner predicts that by 2027, more than 50% of technology providers will use industry cloud platforms to deliver business results, compared with less than 5% in 2023.

PLG is combined with value management to form a hybrid GTM strategy

The product-led growth (PLG) strategy focuses on showing product value to users to stimulate purchase intentions, thereby supporting the product launch (GTM) team Communicate with interested buyers. But most companies that adopt this strategy have begun to realize that in most cases, a completely self-service approach to market expansion is not advisable. At some stage, the sales team must step in to close the deal. Whether developing new business or expanding existing business, buyers need to generate business value and prove return on investment, so providers will combine PLG strategies with value management and realization initiatives to form a hybrid GTM strategy.

Precision Marketing and Sales

Rapidly evolving technological advancements, such as GenAI, digital procurement, and the Metaverse, are rewriting the way technology providers approach technology marketing and sales. Without new strategies, technology providers will simultaneously face lower overall deal quality, decoupling from the market, and limited sales growth to existing customers.

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