How Has the 2021 Technology Landscape Changed?

How the global technology landscape could shift in 2021

With more than a year of handling the pandemic under their belts, software providers can expect businesses to be more adept at managing the crisis and related technology and business changes. 

COVID-19 had forced businesses to defer spending and divert budget to standing up or maintaining remote work infrastructure, including software tools such as collaboration, online meeting and virtual private network. Businesses in some industries, such as hospitality and fast-moving consumer goods (FMCG), had to undergo digital transformations and manage significant changes to their business models to go online. Others had to upgrade technology infrastructure to maintain any competitive advantage. Software providers can expect those categories’ technology spending to continue in 2021 as digital-driven business models become more permanent. 

While COVID-19 resulted in many businesses shuttering, many new digital-first businesses are coming into the market as well. Those businesses place greater emphasis on technology as well as software spending. Software providers can expect such digital-first business models to gain momentum and increase business technology demand through the rest of the year. 

Top technology trends that could influence the software landscape in 2021

1. More than 20% of the businesses that adopted software in response to COVID-19 intend to use it permanently.*

That means that software providers can expect subscriptions or contracts with such businesses to continue through 2021. Some providers may also see increases in subscription or contract scope, as more employees onboard or train on the software, or businesses shift from using a basic plan to a more advanced service agreement. 

3. Nearly 29% of businesses prefer one-year commitments when buying new software, 20% prefer two-year commitments and 19% prefer two-year commitments with a cancellation clause.

Software providers should expect those preferences to continue through 2021 as businesses review contracts or subscriptions up for renewal or consider new software altogether.

New software categories in 2021 identified

Observers expected software categories to emerge in line with macro developments in the technology landscape. Gartner Digital Markets identifies those software categories using various primary and secondary research methodologies, including:

• Identifying search trends: As the demand for a software category grows, the number of people searching for it online grows. Gartner Digital Markets tracks search trends to understand and identify any new software category that becomes relevant. 
• Software provider suggestions: Gartner Digital Markets stays in close contact with software providers from around the world to identify and understand any development in existing software categories or new and emerging trends. 
• Buyer questions: Gartner Digital Markets stays in touch with B2B software buyers on a global scale, to understand their software requirements and the need for any new software categories. 

Once potential software categories are shortlisted, they are closely evaluated against guidelines to ensure their relevance as a standalone category. Those guidelines include an evaluation of core features, distinctions from existing software and a minimum threshold for the number of searches online. 

New software categories emerge every year. For instance, remote work as a software category saw exponential increases in demand in 2020. 

Rupal Bhandari

Rupal Bhandari covers sales and account management markets. She received her master’s degree from the University of Delhi, India, and has created content for some of the world’s leading technology products and companies. Connect with Rupal on LinkedIn.

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*Gartner Digital Markets 2021 COVID-19 Impact on Business Strategy

Results presented are based on a Gartner Digital Markets study conducted to understand the current practices around demand, buying practices, and investment practices pertaining to software solutions. The research was conducted online from November through December 2020 among IT decision-makers across companies in Germany, United Kingdom, Australia, Canada, France, Italy, Spain, Portugal, Brazil, Mexico, Belgium, Netherlands, Luxembourg, Sweden and India.