Monday Morning Impact – February 19
Gartner Identifies Top Trends Impacting Technology Providers in 2024
Gartner, Inc. has put a stake in the ground with regard to 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.”
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. Other identified trends include the following:
Efficient 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 strategies that recognize the value of growth 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, according to Gartner. This creates a trend for 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.
AI Safety
The rapid development of GenAI technologies has fueled the discussion around risk management and how to address growing issues. Product leaders must build solutions that incorporate safety principles with a focus on model transparency, traceability, interpretability and “explainability,” according to Gartner. 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providers have increasingly observed negative sales pipeline effects due to new buyer behaviors that are colliding with outdated go-to-market (GTM) models.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.
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.
Channel Impact®
This list serves as a useful guide for channel partners looking to validate their strategies as 2024 is in full swing.
CompTIA: Tech Employment Grows
Technology companies added nearly 18,000 workers in January and employer job postings for open positions recorded a rebound, according to an analysis of Bureau of Labor Statistics data by CompTIA, a suburban Chicago-based industry association.
The CompTIA analysis says that tech companies added jobs in four of the five primary sub-sectors, paced by technology services and software development (+14,500), cloud infrastructure (+2,100) and tech manufacturing, notably semiconductors (+1,400). Meanwhile, technology occupations across the economy declined by an estimated 117,000 positions, but the unemployment rate for tech occupations was unchanged at 2.3%. The national unemployment rate remains at 3.7%.
“This month’s data is a helpful reminder of the many moving parts in assessing tech workforce gains or losses,” said Tim Herbert, chief research officer at CompTIA. “The expansive tech workforce will simultaneously experience gains and losses reflecting employer short-term and longer-term staffing needs.”
Channel Impact®
The data show how hiring is following a shift in industry dynamics, which will be useful to channel partners and their customers who are mapping headcount strategies.
Cohesity: Most Companies Break Their ‘Do Not Pay’ Ransomware Policies
Research commissioned by Cohesity, a San Jose-based data security company, suggests that today’s pervasive cyberattacks are forcing the majority of companies to pay ransoms and break their ‘do not pay’ policies, with data recovery deficiencies compounding the problem. The research polled from over 900 IT and Security decision-makers shows that most companies have paid a ransom in the last two years, and the vast majority expect the threat of cyberattacks to increase significantly in 2024. Nearly 8 in 10 respondents said their company had been the ‘victim of a ransomware attack’ between June and December.
The cyber threat landscape is expected to get even worse in 2024, with 96% of respondents saying the threat of cyberattacks to their industry will increase this year and over 7 in 10 (71%) predicting it will increase by more than 50%.
All respondents said they need over 24 hours to recover data and restore business processes. Just 7% said their company could recover data and restore business processes within 1-3 days. An additional 35% said they could recover and restore in 4 to 6 days, while 34% need 1-2 weeks. Almost 1 in 4 (23%) need over 3 weeks to recover data and restore business processes.
Unsurprisingly, 94% of respondents said their company would pay a ransom to recover data and restore business processes, while 5% said ‘maybe, depending on the ransom amount.’ More than 2 in 3 (67%) said their company would be willing to pay over $3 million to recover data and restore business processes, with 35% of respondents saying their company would be willing to pay over $5 million.
Channel Impact®
The data point out the need to treat ransomware as a likely certainty for channel partners and their customers.
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