Monday Morning Impact – February 5
Gartner Forecasts Worldwide IT Spending to Grow 6.8% in 2024
Worldwide IT spending is expected to total $5 trillion in 2024, an increase of 6.8% from 2023, according to the latest forecast by Gartner. While generative AI (GenAI) had significant hype in 2023, Gartner does not expect it to have major impact in the near-term.
“While GenAI will change everything, it won’t impact IT spending significantly, similar to IoT, blockchain and other big trends we have experienced,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “2024 will be the year when organizations actually invest in planning for how to use GenAI, however IT spending will be driven by more traditional forces, such as profitability, labor, and dragged down by a continued wave of change fatigue.”
IT services will continue to see an increase in growth in 2024, becoming the largest segment of IT spending for the first time, according to the report. Spending on IT services is expected to grow 8.7% in 2024, reaching $1.5 trillion. This is largely due to enterprises investing in organizational efficiency and optimization projects which will be crucial during this period of economic uncertainty.
“Consumer spending levels are primarily driven by price changes and replacement cycles, leaving room for only incremental growth,” said Lovelock. “Enterprises continue to find more uses for technology – IT has moved out of the back office, through the front office and is now revenue producing, until there is a plateau for how and where technology can be used in an enterprise, there cannot be a plateau in enterprise IT spending.”
The overall IT spending growth rate for 2023 was 3.3%, only a 0.3% increase from 2022. This was largely due to change fatigue among CIOs. Gartner says momentum will regain in 2024, with overall IT spending increasing 6.8%.
Even with the expected regained momentum in 2024, the broader IT spending environment remains slightly constrained by change fatigue. Change fatigue could manifest as change resistance — with CIOs hesitating to sign new contracts, commit to long-term initiatives or take on new technology partners. For the new initiatives that do get launched, CIOs require higher levels of risk mitigation and greater certainty of outcomes.
The most recent IT spending forecast research is available to Gartner clients in “Gartner Market Databook, 4Q23 Update.”
Channel Impact®
This data will help channel partners to measure their results relative to Gartner’s projections for the coming year.
Red Hat Announces New Partner Engagement Model
Red Hat, a Raleigh, North Carolina-based provider of open source solutions, has launched a revamp of its partner program in an effort to offer greater simplicity, choice and flexibility. This transition includes upgraded tools to enable streamlined cross-collaboration and provide easier access to technology, training, and resources.
The new program leverages a modular design intended to help partners align their relationships with Red Hat more closely with their respective business strategies and customer needs.
As part of the partner engagement model transformation, the company is introducing the Red Hat Partner Practice Accelerator Program, which focuses on identifying, enabling, validating, and incentivizing partners within the commercial segment, including mid-market and SMB customers. Red Hat’s intent is to empower partners to lead the full commercial customer lifecycle while providing differentiated and impactful business outcomes using Red Hat Ansible Automation Platform and Red Hat OpenShift. The Accelerator Program is currently limited to a select group of partners that have demonstrated advanced technical knowledge and proven business practices by achieving Red Hat professional services credentials and certifications related to automation and application development. Benefits include access to resources and professional services opportunities to enhance their profitability and differentiate themselves in the market.
The Red Hat Demo Platform will provide product demos that span the entire Red Hat portfolio for partners to showcase open source innovations. The platform includes multi-product demos and fully scripted workshops that can be used to deliver one- or two-day experiences for customers.
Red Hat plans to launch its updated partner engagement model and programming in the second half of 2024. The Red Hat Partner Practice Accelerator Program is an invite-only program now open to eligible partners globally. The Red Hat Demo Platform is scheduled to be available in May 2024.
Channel Impact®
These new enhancements to the Red Hat partner engagement model are expected to improve the partner experience and encourage ecosystem cooperation that will deepen partner capabilities to better support customers.
Veeam ProPartner Network Updates Deal Registration and Incumbency Protection
Veeam Software, a Columbus, Ohio-based company specializing in data protection and ransomware recovery, has rolled out several updates to its Veeam ProPartner Network program aimed at supporting predictable partner profitability while strengthening partner positions against competitive incursions.
Benefits include stronger front-end partner margins, expanded deal registration eligibility and non-standard pricing scenarios, new price protection for incumbent partners such as discounts on maintenance and renewals, enhanced sales and technical training in areas such as cybersecurity, disaster recovery, SaaS, Kubernetes, and Public Cloud.
Successful channel programs must give partners a predictable and profitable business,” said Larissa Crandall, VP of Global Channel and Alliances at Veeam. “Throughout 2024, Veeam will be announcing a series of new program enhancements through collaboration with partners, alliances, and GSIs that will strengthen our overall partner ecosystem and enable radical resilience in a world where our technology is protecting customers from a growing range of threats to their data and business continuity.”
The Veeam Data Platform delivers a single data protection solution for cloud, virtual, physical, SaaS, and Kubernetes environments. With offices in more than 30 countries, Veeam claims more than 450,000 customers worldwide, including 73% of the Global 2000. The Veeam ProPartner Network includes 35,000 technology partners operating in more than 150 countries.
Channel Impact®
The enhancements promise greater, more predictable profit supported by improved deal registration and stronger incumbency protection
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