Gartner Survey Finds 72% of High Tech Leaders Expect to Grow Revenue in 2023, Despite Economic Uncertainty
Leaders Will Need to Rely on Their Ability to Execute and Respond to Changes in the Market to Deliver Growth
The Gartner survey was conducted in the second half of 2022 among 195 respondents in the U.S, Canada, the U.K., France and Germany to understand how economic turbulence poses challenges to general managers, how confident they are in their ability to achieve their plans and the measures planned to tackle the uncertainty.
“Outperforming the market through an uncertain market requires an above average ability to execute on revenue ambitions,” said Mark McDonald, Vice President and Gartner Fellow. “The survey results indicate that almost half of firms (46%) do not have a sufficient ability to execute to reliably realize their revenue goals.”
The survey found that many technology leaders entered 2023 prepared for a potential recession. Paradoxically many of the actions taken concentrated on reducing costs rather than focusing on growing revenue and market relevance (see Figure 1).
Figure 1: Cost Cutting Actions Already Taken by Technology Service Providers (Percentage of Respondents)
Gartner forecasts overall IT spending will grow 2.4% in 2023, with enterprise IT spending projected to grow 4.1%. The context of IT spending is changing as buyers increasingly value and make investments in business outcomes rather than buying solutions.
“Changes in context challenge the relevance of technology solutions. Lower relevance reduces willingness to pay and renew relationships. Gartner sees relevance as the connection between a provider’s solution and how applicable it is to current customer needs. That connection exists at every level from the C-level to individual developers. Without relevance, we see sales cycles extend and renewals at greater risk,” said McDonald.
Context is dynamic requiring leaders to raise their relevance across three situations — the now, and whenever context changes in the near term, with the ultimate goal of positioning solutions for future growth when economic conditions turn favorable in the next economy.
“It is up to the provider to know when context changes and to rebuild context through refocusing messaging and repositioning to meet customers where they are,” said McDonald.
Gartner clients can read more in “Raising Technology and Service Provider Relevance in 2023: Now, Near and Next.”