Gartner, Inc. has highlighted 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 VP 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 (TSPs)."
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. Gartner's top trends for 2024 reflect these dualities.
Efficient Growth for High Tech
Significant growth in IT spending over the last decade benefited high-tech companies. Capturing that growth led high-tech firms to pursue growth without a full measure of the costs. This is a "growth at all costs" strategy. High-tech firms anchored their product, organization and employment plans on a hypothesis of continued strong 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. Efficient growth strategies recognize the value in growing 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, eroding enterprise IT's capacity and capabilities. This creates a trend for product leaders at 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.
Sustainable Business Grows Up
Sustainability efforts and managing the ESG impact have been unilaterally focused on mitigating internal risk and ensuring compliance. Product leaders must evolve by embracing double materiality and holistic leverage of emerging technologies to meet sustainability objectives.
AI Safety
Responsible AI and AI safety are not new concepts, but the unprecedented rapid development of GenAI technologies has fueled the discussion around risk management and how to address growing issues such as content provenance and hallucination. Product leaders must build solutions that incorporate safety principles with a focus on model transparency, traceability, interpretability and explainability aspects. 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.
PLG and Value Converge for Hybrid GTM
Product-led-growth (PLG) focuses on showing value to product users, creating intent signals that go-to-market (GTM) teams can use with prospective buyers. But most companies using a PLG GTM have begun to realize that, in most cases, a 100% self-serve GTM motion isn't tenable. At some point, sellers must be involved to convert deals. Buyer needs for business value and outcome justification — for new or expansion business — will meld PLG tactics with value management and realization initiatives in hybrid GTM strategies.
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.