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

Gartner has identified four emerging trends in the technology market that IT companies must respond to in 2023, according to Distinguished VP Analyst Rajesh Kandaswamy. Regardless of their segment, tech executives and leaders need to evaluate the impact of these trends and take necessary actions. Gartner initially identified nine trends as potentially impactful for tech vendors in 2023, but the following four are the newly introduced trends:

  1. Federated enterprise tech buying will incorporate more decision makers outside of IT.
  2. Product-led growth strategies will increase, providing prospects with an earlier experience of the product.
  3. Digital marketplaces will rise, making it easier for potential buyers to find, procure, implement and integrate technology solutions.
  4. Metaverse technologies will be incorporated into marketing and CX to enhance customer engagement.

How tech market changes impact product strategy

Product strategy is greatly impacted by changes in the technology market, which is constantly evolving to meet the growing demands of people and businesses, as well as the emergence of new technologies and macro forces, such as sustainability. In order to capitalize on new opportunities and manage potential threats, tech executives and leaders need to work closely with leaders in finance, marketing, sales, operations and other areas to craft their strategies.

One major change in the technology market is the trend towards more federated enterprise tech buying, where decision makers and influencers come from outside of the IT department. This shift in focus toward value scenarios and outcomes rather than simply technology requires a pivot in go-to-market strategies toward customer-oriented value scenarios. Companies should aim to demonstrate the customer’s targeted business outcomes in the context of each influencer or buyer in the purchasing process. It’s also important to leverage ideal customer profiles (ICPs) to gain situational awareness of the customer’s buying approach and increase the probability of success and high-quality deals. Additionally, companies should aim to build stronger vendor-client relationships by guiding less experienced buyers on effective decision-making practices and helping companies build maturity in the federated buying environment. While this trend is still in its early stages for many companies, it’s crucial to adapt product strategies accordingly to stay ahead in the evolving technology market.

Secondly, rise in the adoption of product-led growth strategies emphasize the product by providing potential customers with a product experience to showcase its value before any interaction with sales.

According to Gartner, by 2025, 90% of SaaS companies are expected to include PLG as a standard component of their go-to-market practices, which is an increase from the current 58%. This will begin with self-service product experiences and will be powered by aggregated data signals to drive sales-focused conversion or expansion plays.

The ideal result is rapid growth at a lower cost compared to traditional top-down marketing and sales approaches. The Gartner User Influence on Software Decisions Survey of 2021 revealed that more than 50% of free trials/freemiums lead to a purchase. However, success is not guaranteed; it requires more thought and effort than just introducing a free version of a product to the market.

At scale, PLG relies heavily on data, 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 evaluate the suitability of the product for its intended audience to determine whether PLG is feasible or optimal. Considerations include:

  • Does the product offer highly intuitive user experiences?
  • Is onboarding quick and easy?
  • Can users rapidly recognize and capture the value of the product (and weigh that value against its cost)?

Thirdly, as more and more buyers, even those outside the tech industry, demand adaptable and user-friendly solutions, digital marketplaces are becoming increasingly popular for technology purchases.

According to Gartner, by 2026, all major cloud platforms and enterprise application providers will offer marketplaces for business components, allowing customers to create personalized solutions that stand out in terms of quality, convenience, and security.

To take advantage of this trend, consider the following:

  1. Determine if a marketplace channel is a priority for your business. Assess the market opportunity, including the fit of your solutions and the preferences of your target buyers.
  2. Prepare for the changing landscape of tech purchasing by non-tech buyers. Adjust your go-to-market strategy to sell through a marketplace that emphasizes the compatibility of your solution with existing infrastructure and the ease of integration.
  3. Prepare to participate in a marketplace to reach your target customers. Evaluate the suitability of existing marketplaces or consider launching your own marketplace.

A fourth trend is the use of metaverse technology in marketing and customer experience.Metaverse technology is rapidly gaining popularity in the realm of marketing, providing unique experiences, impactful interactions, and novel engagement. As a result, tech product leaders must seize the opportunities that arise and elevate their marketing and customer experience (CX) initiatives by creating exceptional experiences.

According to predictions, a majority of B2C enterprise CMOs will allocate a dedicated budget for digital humans in metaverse experiences by 2027. However, given the early stage of metaverse technologies, product leaders must first determine when and how to take action.

To begin with, they must assess the potential of metaverse technologies, such as large-scale, multiplayer/multi entity virtual spaces, virtual reality (VR), and avatars, in terms of user and customer reach and engagement rates. They should identify areas where metaverse technologies could provide unique opportunities to engage with potential customers and offer memorable, positive experiences for existing ones.

Moreover, product leaders should develop a strategy for continuous evaluation, including exploring potential partnerships and ecosystem expansion as metaverse technologies progress and converge over the next five to ten years.

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