I looked at markets and labor yesterday; today, let’s look at tech spending.
According to the Barclays Business Barometer, UK SMEs are investing nearly half of their annual turnover in technology, with 45% doing so to increase productivity and 44% to future-proof their business. The bank also reported that 57% of the SMEs it monitors reported an increase in revenue in the latest financial quarter, which is the most for 18 months. Retailers, in particular, are confident about growth over the next year, with 85% reporting a positive outlook, and 66% of retailers are open to embracing new technology.
According to research from Canalys, partner-delivered IT technologies and services are expected to exceed $3.4 trillion in 2023, accounting for over 70% of the global total addressable IT market. Spending in North America is expected to grow 2.8% this year, while Asia Pacific is forecast to grow 4.5%, EMEA 3.4%, and Latin America 3%. Cybersecurity and network infrastructure are expected to grow significantly, while sales of servers, storage, and client devices are expected to suffer negative or flat growth. Despite economic concerns, the industry’s growth is expected to rebound next year, with IT spending hitting $5 trillion for the first time.
According to a report by Vertice, SaaS prices have increased by an average of 12% over the past year, with 73% of SaaS providers raising their prices since August 2022. The report suggests that SaaS vendors are looking to maximize their profit margins, with price hikes becoming one of the main levers used to drive revenue. The price increase is significant compared to previous years, with SaaS prices rising by an average of 6% in 2019.
A reminder: technology always goes up in spending. Per unit cost may go down, but technology spending always goes up. There are the expected insights here – customers will spend on business value, for example.
Cost optimization is a space in which I’m increasingly seeing value. These are no small price increases – and helping customers here is significant business value.