New research from Gartner reveals that 72 per cent of high tech leaders in the U.S., Canada, and Western Europe have plans to grow revenue this year. The company’s survey found that almost half of those leaders believe they will be able to outperform their competition in 2023.
The survey, conducted in the second half of 2022, queried 195 respondents in the U.S, Canada, the U.K., France, and Germany, to understand how economic uncertainty poses challenges to general managers.
The survey found that many technology leaders were prepared for a potential recession at the beginning of 2023. However, many of the actions taken focused on reducing costs rather than growing revenue and market relevance.
Some of the actions taken to cut costs included:
- Slowing down hiring and openings for new positions (55 per cent)
- Spending cuts across the board (52 per cent)
- Reduced marketing spends and programs (43 per cent)
- Freezing internal spending (28 per cent)
Only three per cents of those surveyed said they’ve made no changes so far.
“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 do not have a sufficient ability to execute to reliably realize their revenue goals.”
Gartner forecasts overall IT spending will increase by 2.4 per cent in 2023, with enterprise IT spending projected to grow just over four per cent. The context of IT spending is changing, as buyers increasingly value and make investments in business outcomes rather than just purchasing solutions.
“Changes in context challenge the relevance of technology solutions. Lower relevance reduces willingness to pay and renew relationships,” said McDonald. “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.”