So are we in some kind of slowdown – or aren’t we? One thing is clear is that public SaaS and Cloud stock prices are falling.
But does he spend? I’m not so sure. In my own portfolio, more of my investments had a record month in October than a difficult month. Yet I see almost everyone who struggles blaming the “economy”, rather than themselves. Clearly something is going on. Sales tools currently seem more under pressure than infrastructure, for example. But everyone awesome that doesn’t have a post-Covid hangover (e.g. Zoom and Shopify) continues to grow at top rates. If no one is buying sales and marketing tools, why are ZoomInfo and HubSpot experiencing record growth, for example? If a recession hurts HR spending, why is Paycom accelerating after $1 billion ARR? Be honest. Is a few bumps in the economy – always happening. Or is it you?
So what does Gartner say? They’re not perfect, but given the number of CIOs they interview — over 2,200 for this survey — they’re one of my favorite sources for what’s happening in 2023.
And they say 2023 will be a banner year for enterprise software spending, at least – with an astonishing 11% growth to $880 billion. (Note that this does not include SME spending, it is business focused):
In a slightly more dated survey, Gartner found in July that 69% of CFOs plan to increase their digital spending in 2023. It’s not 100%. But it is still the most.
Gartner did not dispute the impacts of inflation and “economic turbulence.” But their surveys of CIOs indicate that while some areas like infrastructure will benefit and others will be affected, overall CIO spending on enterprise software will increase significantly in 2023. And software is the biggest beneficiary, up 11.3%, even as other spending areas like devices are put more on discretionary hold.
Top areas of increased CIO investment for 2023 include “cyber and information security (66%), business intelligence/data analytics (55%) and cloud platforms (50%). 32% are increasing their investments in artificial intelligence (AI) and 24% in hyperautomation,” according to Gartner.
“Economic turmoil will change the backdrop for technology investment, increasing spending in some areas and accelerating declines in others, but it is not expected to have a significant impact on the overall level of business technology spending.” John-David Lovelock, Distinguished VP Analyst at Gartner
Look, if you want an excuse not to grow up, you got one right now.. Blame inflation, blame the stock market, blame whatever. But SaaS spending continues to grow. So if you want to be intellectually honest, don’t make too much of an excuse.
Instead, go for it.
Posted on October 20, 2022