The Great Tech Stall

Summary

Since the onset of the COVID-19 pandemic, global markets have struggled with economic challenges and uncertainty. Rising inflation, stagnant wages, and geopolitical conflicts contribute to further increasing the strain on the worldwide economy.

The rapid digitisation driven by the urgent need for remote work solutions in 2020 left companies with bloated, often inefficient tech stacks. Coupled with the increasingly complex global economic scenario, businesses resorted to budget cuts, layoffs, and other measures to reduce costs—a common scenario plaguing 2023 and which continues into 2024.

2022: The slumps

It is crucial to note that the tech sector has been impacted more severely than other B2B verticals since 2022—mostly due to organisations streamlining tech stacks and reducing IT spending.

In 2022, tech stocks plummeted by over 30%, surpassing the overall market's 20% drop. Key tech indexes, such as Dow Jones and NASDAQ, reported declines of 35% and 33% for that year, respectively. Even major tech players, such as Meta, Amazon, and Tesla, underwent substantial losses and were compelled to resort to large-scale layoffs (Forbes, 2023).

However, the year also saw great success for the SaaS model as companies started to adapt to the post-pandemic scenario, driven primarily by Private Equity and Venture Capital (PE/VC) investment models.

2023: The readjustment of the tech market

The market steps into 2023 with a heightened sense of caution. Tech spending growth has decelerated to 5.4% (Forrester, 2023), and tech acquisitions demonstrated a significant reduction of 33% in Q1 (Startups Magazine, 2023). Furthermore, the scrutiny over tech spending and its productivity increases, as does the average number of members involved in buying committees, further cornering tech enterprises into an unstable position to sell. Additionally, PE/VC investment sources begin to dry up, also leading to reduced spending.

But although 84% of companies demonstrate concern about a possible recession in 2024 (Spiceworks, 2023), forecasts for this year predict greater optimism than before. A significant majority of companies intend to increase their tech investments, and businesses foresee possibilities for modest growth in 2024. In an interview for The Economic Times India (2023), Gartner Senior Director Analyst DD Mishra shared an expectation that the growth pause would be short-lived in 2024, with a return to earlier growth patterns.

So, what lies ahead for marketers and tech professionals on the global stage in 2024? In this article, we explore the trends and shifts that will shape the tech market's future trajectory.

The tech market in 2024: Defensive buyers and the AI plateau

For the year ahead, Gartner (2023) reinforces that all trends and emerging strategies will orbit around a range of key themes: investment protection, agile solution-building, and value delivery, in line with the changing expectations of clients.

In order to ensure maximum impact from tech investments, businesses are decreasing experimentation and becoming more scrutinous with their purchases. In this same tone, Gartner (2023) also states that, by 2027, 80% of CIOs' performance metrics will be tied to the sustainability of IT departments. This is just one example of how the pressure for successful outcomes from purchases has therefore resulted in tech buyers entering a defensive stance.

Gartner analysis (2023) reveals the slowdown of the AI hype cycle, as organisations focus on understanding and leveraging its real capabilities. For example, AI-augmented software development can help developers and software engineers automate tasks and write code more quickly. However, tools such as ChatGPT and Google Bard may encounter less use (Gartner, 2023), due to their trade-off requirements on prompts and code, which may risk violating data privacy regulations and leaking intellectual property.

Still, by 2027, 70% of professional developers are expected to be using AI-powered coding tools (Gartner, 2023), and this adoption leads to the rise of low-code/no-code solutions, allowing less technical professionals to interact with complex systems.

Cloud

Even amidst this scenario, substantial investments are anticipated in the cloud sector. According to Markets and Markets (2022), the cloud market is projected to surpass $1 trillion USD by the end of 2027, at a compound annual growth rate (CAGR) of 17.9%.

However, this risks leading to 'cloud sprawl', as coined by Forrester (2023). Cloud sprawl refers to the uncontrolled growth of cloud usage, occurring when companies do not monitor their cloud environments. This can incur high costs for unused cloud instances, system vulnerabilities, and overall poor organisation management. As such, companies adopting cloud solutions must ensure integration and efficiency to avoid unnecessary expenses and cluttered tech stacks.

SaaS

As buyers increasingly expect more value from their software purchases, with 47% of tech buyers expecting return on their investments within 6 months or less (G2, 2023), conversations in B2B spaces as early as 2021 mentioned the supposedly slow death of the SaaS model, which gained propulsion in 2007 and thrived during the pandemic.

Indeed, as the 'growth at all costs' funding model breaks down, investors begin looking at performance issues, having discovered that SaaS returns have not been fully realised. This leads to a funds shortage, with data scientists and developers quickly hired to come up with more cost-effective solutions.

Tech trends to drive results in 2024

Considering the current obstacles facing the tech market, here are top tech trends for 2024 to consider in your branding and marketing strategies:

Sustainable technology: These solutions look to offset carbon footprint and environmental setbacks stemming from business activities. These assets are increasingly important in a scenario in which companies are looking to invest in products that adhere to environmental, social, and governance (ESG) protocols, adapting to new changes and risk models, but also contributing to mitigate them. Furthermore, sustainability is a strong focus for Millennial and Gen Z buyers (The Drum, 2023), who currently comprise two-thirds of B2B buying committees (Forrester, 2023).
Generative AI in everyday life: AI can be leveraged to automate small but time-consuming tasks, allowing team members to devote more resources to creative and strategic planning and execution, reducing the time spent on menial work. Furthermore, low-code and no-code AI-powered solutions offer support for non-IT staff in facilitating the development of previously inaccessible systems. Leveraging AI to augment workflows is, therefore, a key strategy for those looking to optimise resource management to boost outcomes.
Cyber resilience: As poor cyber hygiene, cloud vulnerabilities, and mobile device weaknesses pose crucial cybersecurity threats in 2023, resilience is essential for countering these risks. Cyber resilience is a strategy that goes beyond simple cybersecurity measures by involving steps to be taken in order to reestablish control and minimise damage after a defense breach. Although most likely a pre-emptive strategy for most, investing in resilience is key to ensuring risk is kept to a minimum.

5 tactics for marketing to the 2024 buyer

“Given the developments of the past few years, defensive buyers are not only more selective in their choices but also prioritising purchases that are likely to result in long‑term, tangible value for their objectives. To succeed in this environment, tech companies must adapt their marketing strategies to address these shifting priorities via focused strategies such as long-term demand generation and account based experience (ABX).

The rise of the more scrutinous, defensive buyer also marks the end of experimentation. Organisations must be more discerning with their marketing strategies and investments in order to optimise budgets.“

Below are five tactics to ensure your investments drive meaningful outcomes in 2024:

Develop a solid GTM model as a basis for your demand efforts

Go-to-market (GTM) models are fundamental structures developed by organisations to orchestrate core internal strategies that span all functions. For example, these include outreach plans to drive quality engagement with the right buyers by developing accurate and personalised experiences, as well as processes and data flows to ensure that iterative strategies align with performance goals.

Whilst several different GTM models have been developed, typically centred on defining a main focus for the organisation, there is no single strategy that caters to the needs of all businesses. Indeed, present challenges demand companies to practice introspection and strive to find the strategy that best suits them, pivoting when necessary.

The RevOps model has enjoyed increased attention from companies in the B2B space as a key pillar of GTM strategies, especially due to its focus on fostering interdepartmental alignment and eliminating silos. Furthermore, this model promotes revenue growth and productivity, hence being adopted by 48% of companies (Revenue.io, 2022).

Such capabilities ahead of evolving buyer scrutiny position the RevOps model as a critical GTM motion to offer improved data insights, which are invaluable for delivering unrivaled client experience.

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Discover how to leverage RevOps in your
GTM strategies

Leverage targeted demand generation strategies to address increasing buyer scrutiny

Demand generation is a priority investment for companies tackling increased buyer scrutiny, as building a strong foundation of demand becomes essential for fostering long-term trust.

“High-performance demand generation is defined by strategies that deliver highly resonant messaging that addresses prospect needs and pain points with precision, ultimately positioning the brand as a trustworthy solution provider. This also helps keep the brand top of mind for when buyers are willing to buy.”

However, in a year of modest growth marked by defensive buyers (Forrester, 2023), the emphasis on demand generation tactics to be focused and transformative is greater than ever. Successful strategies will be those built with the latest data insights into buyer needs, concerns, and behaviour to ensure their accuracy and inform spend to avoid wasted budgets.

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Discover how to tackle increased buyer
scrutiny with demand strategies

Develop an account based experience (ABX) approach to deliver memorable buyer experiences

ABX, an account based approach informed by user and client experience methods, can be an effective way to target wary and discerning buyers. This tactic enables you to create highly personalised campaigns that echo the unique needs of individual target accounts, demonstrating a deep understanding of their challenges and positioning your brand as a relevant solution provider.

Furthermore, ABX strategies allow marketers to obtain a deep level of insight on target accounts and their industries, goals, challenges, and organisational structures, thus enabling you to create custom-tailored content to target key decision makers within the organisation.

This strategy helps marketers to engage these decision makers in meaningful conversations, contributing to building solid relationships, which are highly valued as options to invest in by scrutinous tech buyers.

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ABM strategy

Explore AI’s capabilities to augment demand outcomes

AI-driven automation has the capability to eliminate the need for repetitive admin tasks, boosting productivity. Furthermore, its incredible potential to extract valuable insights from big data is crucial to guiding strategic decision making towards unparalleled outcomes.

Additionally, AI is able to facilitate content creation, personalisation, and lead nurturing, all of which are greatly valuable to drive demand from scrutinous buyers.

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Discover the current role of AI in B2B demand
generation

Tap into the channel's continued success to drive results in unfavorable environments

Building partnerships is a core component of growth by expanding the capacity and reach of organisations, without the same cost and at minimal risk (compared to in-house efforts). Channel and partner marketing, in particular, continues to display significant results and resilience even in challenging economic climates, especially due to its adaptability, efficiency, and potential to drive revenue.

However, this approach is not without its own challenges. Companies looking to leverage partnerships and the channel must be aware of best practices and key strategies in order to achieve the best outcomes.

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Unlock the full potential of the channel to drive your
performance in 2024

Key takeaways

Here is a brief summary of what to expect for the year ahead in tech, and how to cater to the more scrutinous tech buyers we are encountering:

Although tech spending has decelerated, a majority of companies intend to increase their tech investments in 2024 but in ways that align investments to key business strategies
Buyers decrease experimentation and focus on results, becoming more scrutinous with tech purchases and adopting a defensive stance
Upfront value delivery becomes a must to cater to these new buyers in 2024, demonstrating the need for valuable touchpoints at the start of the buyer’s journey
The AI hype cycle comes to an end, leaving in its wake a better understanding of the real capabilities of AI for businesses—less mundane experimentation, more focused investment
Sustainable tech, generative AI, cyber resilience, and AI-augmented development are some of the top tech trends to keep track of
Companies are foreseen to invest heavily in cloud, but businesses must be wary of the risk of cloud sprawl
The SaaS model appears to be slowly phasing out
A solid GTM motion with emphasis on demand generation and RevOps is instrumental to achieving results in the year ahead
ABX becomes imperative: the focus on client experience is essential to market to wary buyers
Channel and partner marketing, due to the rise of the partnership ecosystem, are prime strategies for 2024