Economic conditions create a paradox for high tech companies. On the one hand, economic challenges are beginning to show signs of slower corporate activity and investment. On the other, Gartner forecasts indicate continued relative strength in IT spending over the next two years.
A Paradox of Economic and Technology Investment
The apparent paradox of a broader slowdown with continued strength reflects the change context for corporate buyers and business leaders. In other words, the economy will impact pipelines, close rates ect. as companies will invest but invest for different reasons. The change in buyer context requires high tech companies to raise their relevance in the face of changing buyer and customer context. That context exists in three contextual frames: the now, the near and the next as illustrated in the figure below:
For more detail see Gartner’s published research Raising TSP Relevance in a Recession: The Now, the Near and the Next, subscription is required.
An Example of Leading in the Near
Economic conditions impact current conditions, the now, that require a more immediate response. At the same time, high tech firms need to stake their claims for the future, the next, when economic conditions improve. Other posts will talk about the now and the next. This post focuses on the near.
Economic turbulence constantly changes the context facing buyers, customers and high tech companies. The Near describes the context for events that will change the current context and require a response to maintain or raise a high-tech companies relevance to buyers and customers. A change in competitors is one example of a near term change.
Recent High-Tech Company quarterly announcements represents an example of a near term change that could change the how customers and buyers view the cloud services marketplace. The links are to two Wall Street Journal articles describing a changed view of the cloud marketplace. Both articles represent an example of a Near term change.
First, read and think beyond the headline
In turbulent times it is easy to jump to conclusions, create broad generalizations and confirm your worst suspicions. Take the time to get as much information as you can, think through it and avoid just following the headlines.
Only following the headlines gives you the impression that the cloud and software as a service marketplace is headed for a downturn with phrases like “the largest pure-play provider of cloud-based software isn’t immune to the macroeconomic slowdown.”
Reading beyond the headline tells a more complete story. Yes, its natural that cloud revenues would slow in the face of adverse economic conditions, but the articles talk about slower growth rates. Gartner estimates 2022 growth of 20.4% vs. 2021’s growth rate of 28.1%. Yes growth is slowing, but it is not a real contraction in cloud spending one would guess from the headline.
Second, gauge the impact of the near-term change
Near term changes shape buyer and customer expectations. Once you understand the ‘news’ itis time to consider how this changes your relevance to customers and against competitors.
Think through what the news means, what conclusions customers might draw from it – particularly if they only read the headline, the questions they will have and how you will proactively address those questions or issues.
In this case, the cloud and software as a service solution are growing, viable and valuable markets. Yes, the economy is slowing things down, but it is not invalidating a company’s cloud investments or direction. Further raise your relevance through more specific points relative to each customer situation and context. Be sure to include how your solutions create value for the customer into the future – the next. Anchoring your relevance to the now and the future next creates a more powerful position.
Lastly, actively engage each customer in their own context
Without a proactive response, uncertainty, change and perception have lives of their own. Proactively take new messaging, information and insight to customers and buyers. Create engagement opportunities that are unique to each customer and their situation. Remember what Leo Tolstoy wrote ““All happy families are alike; each unhappy family is unhappy in its own way.” That translates to each company facing turbulence and challenges in their own way.
Use Near term changes to win in the Now and the Next
We all live in context and challenges of the now. What happens in the near-term changes context and the challenges we face. Proactively engaging customers when things change represents an opportunity to raise your relevance and market position. The three actions outlined in this post seem simple. They are, simple to be actionable. Actionable in times of turbulence and change to raise your relevance with customers.
Related Gartner Research: accessible to Gartner Clients
Raising TSP Relevance in a Recession: The Now, the Near and the Next
Forecast Alert: IT Spending, Worldwide, 2Q22 Update
Related Blog Posts:
6 Paradoxes Facing Vendors Selling Enterprise Technology
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Relevance is customer and situationally specific
The Tale of Two Technology Market Groups
Are you reading the headlines or the whole article?
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