On DemandSeptember 19, 2023 - 8:00am PST // 11:00am EST
2024 Tech Budgets Preview
This webinar explores the key factors shaping IT budgets as we head into 2024 and beyond. Topics include:
Economic Backdrop: Amidst a range of often conflicting indicators, the general outlook is more positive when the details are examined.
Annualized inflation: 3.7% – we forecast it will remain below 5% through 2024.
Supply chain issues: moderating – but still not fully resolved. Labor unrest, future trade relations with China, war in Ukraine – all contribute to uncertainty.
Unemployment: moderating, upward wage pressures have abated, talent remains tight
American GDP growth: remains strong – despite weakness in Europe and China
Global 2000 corporate earnings: generally strong, with growing cash piles
Access to capital: constrained, real borrowing costs are above 10%
The Impact of Generative AI: There is a sizable gap between what vendors expect to charge for premium LLM add-ons and what customers are prepared to invest.
Users are still looking to understand the best use cases for AI and determine what foundational elements are required (e.g., security, data governance).
In most areas of monetization, users simply want assurance their vendors are adopting AI – but many companies are fearful of making major business changes around AI.
Vendors expecting a major uplift in ASPs from AI-enabled applications are likely to be disappointed. A more pragmatic view: AI enhanced solutions will preserve margins and mitigate commoditization.
Invest strategically while avoiding across the board cost-saving measures, even if total costs must come down.
Consolidate spend wherever possible, invest in monitoring and management tools, track usage and performance, and turn off unused features and seats.
Analyze IT efficiency versus IT efficacy – it’s a smarter way of assessing IT and business outcomes.
ROI/TCO models are gaining traction – buyers should expect them when assessing products, and vendors should have them on-hand to share proactively with prospects.
Don’t wait to speak with references – Using reference checks for new purchases helps identify pitfalls and avoid hidden costs.
Leverage vendor uncertainty and trade it for discounts in multi-year deals. Many suppliers are willing to trade discounts for longer-term agreements/structured payments. This is an opportunity to lower costs with strategic suppliers.
The Bottom Line: IT budgets are likely to increase 4-6% in 2024.
Technology remains critical to productivity increases and business differentiation.
Significant demographic and business trends remain intact: legacy ERP systems are in need of renewal/add-ons, cyber security and modernization projects demand sustained investment.
Finance departments are under-invested in modern tools.
Leading companies smell opportunity and are investing ahead of weakened competitors.
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