Blog post

A Critical Shift is Happening in Technology Markets

By Hank Barnes | July 05, 2016 | 6 Comments


It’s almost a given.  The primary focus of the majority of companies in technology markets is innovation.   Technology innovation.  And its been that way for years, right? The vast majority of the messages and focus is new products or product improvements.   And that is often how many of us view the power of a tech company–how innovative are they?

But even in the past, technology innovation has not been the only driver of success.  Even while many were touting the demise of Microsoft as their pace and rate of success with tech innovation slowed, we failed to recognize the ongoing value of  innovations that  were  key drivers in Microsoft’s ability to establish a market dominance.  Namely their early business model that heralded the ecosystem era—cultivating broad support of developers for their platforms to create a two sided market that provided value for producers and consumers.   And, their channel model–another ecosystem of types where partners built their business around Microsoft.

It was not pure technology innovation that pushed Microsoft to their position.  It was go-to-market strategies.   And those relationships are hard to break.  They may experience some issues and there will be transitions, but they provide a strong protective force to weather some mistakes and accelerate successes.

The recognition that success is about more than technology is growing (I think we have always known it, but it is easy to get seduced by cool technology).    In fact, a recent survey of CEOs in tech providers demonstrates this shift (Gartner Tech Provider Clients: You can see more information on this survey in the report created by my colleague Todd Berkowitz: “Technology Provider CEOs Believe That Customer Experience Provides a Winning Strategy).

While investment in new technology for products and services continues to be a priority (55% of the CEOs ranked it in their top 2), a focus on innovating in the way their companies engage with customers was a top priority for more CEOs (58%).      They are recognizing that changing market conditions, particularly more tech-savvy business buyers, requires them to become more industry and business focused, to adapt their sales practices, and to think about new delivery models.

And, more importantly, they feel this shift is paying off where it counts.  42% of the CEOs cited improvements in customer experience and service as the key change that has driven more wins (Incidentally, the combination of new or better products was only 15%).


This shift is important for everyone and is good to see.  But there is still work to do. Years of inertia take time to change.   But recognizing the situation and taking steps to improve has happened.   Now it’s all about continued progress and focus–some changes will deliver results quickly.  Others may take longer (and could cause what feels like a step back).   But there is no question the market has changed.  Leadership through the change is critical.  Our survey indicates that CEOs understand that and are taking action to lead through the change.

That is a great sign for the tech industry.

The Gartner Blog Network provides an opportunity for Gartner analysts to test ideas and move research forward. Because the content posted by Gartner analysts on this site does not undergo our standard editorial review, all comments or opinions expressed hereunder are those of the individual contributors and do not represent the views of Gartner, Inc. or its management.

Leave a Comment


  • Gordon Hogg says:

    What’s more concerning is that only 21% of CEO’s cited improvements in sales and marketing as the key to driving more wins.
    Shocking but not surprising.
    In our conversations with recent buyers we rarely hear a buyer describe marketing content or a sales interaction that positively affected vendor consideration or selection.

    • Hank Barnes says:

      True, but I do think some of them feel that CX can (and should) include aspects of sales and marketing. In other parts of the survey they did cite sales (and marketing to a lesser extent) as one of the top (if not the top) areas of investment going forward.

      • Gordon Hogg says:

        OK. So is this shift to CX a result of the transition to a SaaS model and the monthly or quarterly “renewal” sales dependency or is it a function of a SaaS delivery model focused on a minimal viable product that’s constantly evolving and iterating together with the customer. Or both?

  • Hank Barnes says:

    The CEOs surveyed were across a broad range of companies, not necessarily exclusively tied to SaaS or MVP orientation.

    My interpretation is the shift is a recognition that product differentiation alone is unsustainable.

  • Tony Bodoh says:

    Great article. We’ve seen similar changes creeping in in hospitality (more focus on guest experience, less on facility innovations) as well as in medical practices (experience over new tech). What’s your perspective on whether this perspective is filtering from CEOs to the product management level?

    • Hank Barnes says:

      I’d say that recognition of the importance of #CX is spreading throughout most organizations. That being said, many are still figuring out how to improve #CX, particularly as it applies to things they should do, priorities they should set, etc. with regards to their own role.