New research Gartner shows that 72 percent of high-tech leaders in the US, Canada and Western Europe plan to increase revenue this year. The company’s survey found that nearly half of those leaders believe they will be able to outperform their competition in 2023.
The survey, conducted in the second half of 2022, asked 195 respondents in the US, Canada, the UK, France and Germany to understand how economic uncertainty poses challenges for general managers.
The survey found that many tech leaders were bracing for a possible recession as early as 2023. However, many of the steps taken were focused on reducing costs rather than increasing revenue and market relevance.
Some of the actions taken to cut costs include:
- Slowing hiring and opening for new positions (55 percent)
- Cut spending across the board (52 percent)
- Reduced marketing spend and programs (43 percent)
- Fixed internal spending (28 percent)
Only three percent of those surveyed said they have not made any 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 suggest that nearly half of firms do not have sufficient ability to execute to reliably achieve their revenue goals.”
Gartner estimates that overall IT spending will increase by 2.4 percent in 2023, with enterprise IT spending projected to increase by more than four percent. The context of IT spending is changing, as buyers value and invest in business outcomes rather than just buying solutions.
“Changes in context challenge the relevance of technology solutions. Reduced relevance reduces willingness to pay and renew relationships,” McDonald said. “Gartner views relevance as the relationship between a provider’s solution and how applicable it is to current customer needs. That connection exists at every level from C-level to individual developers. Without relevancy, we see sales cycles lengthen and renewals become more at risk.
