4 Ways the Tech Market Will Change for IT Companies in 2023

March 08, 2023

Contributor: Lori Perri

Change is constant in the technology market, but Gartner expects four emerging trends to require a response from all IT companies in 2023.

“No matter the technology segment — software, services, hardware or other solutions — tech executives and leaders must evaluate the impact of these trends across their business and determine the required actions,” says Distinguished VP Analyst Rajesh Kandaswamy. 

Gartner identified nine trends as potentially impactful for tech vendors in 2023, but the following four will be the new trends introduced in 2023:

  1. More federated enterprise tech buying incorporates more decision makers outside of IT.

  2. Increase in product-led growth strategies, which offer prospects earlier experience of the product.

  3. Rise of digital marketplaces makes it easier for potential buyers to find, procure, implement and integrate technology solutions. 

  4. Metaverse technologies incorporated into marketing and CX to build customer engagement.

How tech market changes impact product strategy

The technology market continually evolves to account for:

“For tech executives and leaders to capitalize on new opportunities and manage the threats,” says Kandaswamy, “they must engage with executive leaders across finance, marketing, sales, operations and other areas to craft their strategies.”

Change No. 1: More federated enterprise tech buying

When more authorized decision makers and influencers come from outside IT, the focus of purchase decisions shifts to value scenarios and outcomes, rather than simply technology. 

The federated buying model is still immature in many companies, but a 2022 Gartner survey showed that 67% of enterprise-tech decision makers are not in IT. 

To create opportunities tied to this emerging trend:

  • Pivot go-to-market strategies from technology-based toward customer-oriented value scenarios. Demonstrate the customers’ targeted business outcomes in the context of each of the influencers or buyers in the process.

  • Leverage ideal customer profiles (ICPs) to improve your situational awareness of the customer’s buying approach, and maximize the probability of success and high-quality deals.

  • Build a stronger vendor-client relationship by guiding less experienced buyers on effective decision-making practices and helping companies build maturity in the federated buying environment.

Change No. 2: Increase in product-led growth strategies

Product-led growth (PLG) strategies put the product front and center by providing prospects with some form of a product experience to demonstrate value, before any interaction with sales. 

By 2025, Gartner expects PLG to be a standard component of go-to-market practices for 90%

of SaaS companies (up from 58% today). That will start with self-service product experiences, and will be driven through aggregated data signals to sales-driven conversion or expansion plays.

The best outcome is fast growth at a cost lower than traditional top-down marketing and sales motions. The 2021 Gartner User Influence on Software Decisions Survey found that more than 50% of free trials/freemiums led to a purchase. However, success is far from assured; it takes more consideration and effort than simply introducing a free version of a product into the market. 

PLG at scale is data-intensive, encompassing user or buyer awareness and onboarding, product usage augmented with guidance and help as needed, and ultimately conversion and expansion based on usage value, and related advocacy and influence.

The first step is to assess whether PLG is viable or optimal by evaluating the suitability of the product relative to its intended audience. Issues to consider:

  • Does the product have highly intuitive user experiences?

  • Is onboarding easy/fast?

  • Can users quickly recognize/capture value (and weigh that value against cost)?

Change No. 3: Rise of digital marketplaces

Digital marketplaces are becoming commonplace for tech purchases as buyers, increasingly nontech ones, are looking for composable and easily consumable solutions. 

By 2026, Gartner expects all major cloud platform and enterprise application providers will offer business component marketplaces to enable customers’ composable strategies, differentiating by quality, convenience and security.

To capitalize on this trend:

  • Evaluate the priority of a marketplace channel for you, by sizing the market opportunity, including solution fit and assessing your target buyers’ preference.

  • Prepare for a shift in tech buying by nontech buyers, by adjusting your go-to-market strategy to sell through a marketplace that ensures buyers know about your solution’s compatibility with existing infrastructure and that it can be easily integrated.

  • Prepare to be part of a marketplace to serve target customers, by evaluating the suitability of existing marketplace or by launching your own marketplace.

Change No. 4: More metaverse technology in marketing and CX

Metaverse technologies are rapidly gaining traction in areas of marketing for creating unique experiences, impactful interactions and novel engagement. Tech product leaders must seize the opportunities now available, to create unique experiences and elevate their marketing and CX initiatives.

By 2027, a majority of B2C enterprise CMOs will have a dedicated budget for digital humans in metaverse experiences.

Given the nascent state of metaverse technologies, product leaders must first determine when and how to take action:

  • Evaluate the viability of metaverse technologies, such as large-scale, multiplayer/multientity virtual spaces, virtual reality (VR) and avatars, in terms of user and customer reach, and engagement rates of audiences. Look for areas where metaverse technologies could increase opportunities to engage uniquely with potential customers, and provide memorable, positive experiences for existing customers.

  • Build a strategy for continuous evaluation, including evaluating potential partnerships and ecosystem expansion, as these metaverse technologies advance and converge over the next five to 10 years.

Rajesh Kandaswamy is a Gartner Fellow and a Distinguished VP Analyst. His primary research areas are artificial intelligence, blockchain and key technology industry trends. He focuses on how the technologies create business value, their strategic impacts, the use-cases, the market landscape and the actions required.

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