Published on November 17, 2023, 4:18 am

Despite the current economic uncertainty, a recent survey by Gartner reveals that 72% of high-tech leaders in the US, Canada, and Western Europe have plans to grow revenue in 2023. Furthermore, almost half of these leaders believe they will be able to outperform their competition this year.

Mark McDonald, Vice President and Gartner fellow, emphasizes the need for an above-average ability to execute on revenue ambitions in order to outperform the market during uncertain times. However, the survey results indicate that 46% of technology leaders do not possess the sufficient ability to reliably realize their revenue goals.

Interestingly, many technology leaders entered 2023 prepared for a potential recession. However, rather than focusing on growing revenue and market relevance, their actions primarily revolved around cost-cutting measures. This is illustrated in Figure 1.

Figure 1: Cost-Cutting actions already taken by technology service providers (percentage of respondents)

Source: Gartner (March 2023)

To achieve growth in such a scenario, it becomes crucial to raise the relevance of technology solutions. Gartner forecasts that overall IT spending will grow by 2.4% in 2023, with enterprise IT spending projected to grow at a rate of 4.1%. It’s worth noting that the context of IT spending is changing as buyers increasingly prioritize business outcomes rather than just buying solutions.

According to Mark McDonald from Gartner, changes in context can challenge the relevance of technology solutions. When a solution loses its relevance, there is a reduction in willingness to pay and renew relationships with providers. Relevance is seen as the connection between a provider’s solution and how applicable it is to current customer needs. Without relevance, sales cycles tend to extend and renewals become riskier.

Given this dynamic context, technology leaders must strive to raise their relevance across all situations—in the present moment and whenever context changes in the near term. The ultimate goal is to position solutions for future growth when economic conditions become favorable in the next economy.

“It is up to the provider to know when the context changes and to rebuild context through refocusing messaging and repositioning to meet customers where they are,” concludes Mark McDonald.

In conclusion, high-tech leaders are optimistic about revenue growth in 2023, despite economic uncertainty. However, there is a need for technology providers to improve their execution capabilities in order to reliably achieve their revenue goals. Raising the relevance of technology solutions is key to driving growth and meeting customer needs in a rapidly changing context.

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