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‘Overwhelmed’ cyber analysts fear their organisation could already be breached

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97% of cyber analysts are worried they will miss security events, with 71% admitting their organisation may have been compromised and they don’t know about it yet.

That’s according to a study by Vectra AI, which details how analysts are being overwhelmed, as they receive 4,484 alerts on average per day, but can’t cope with 67% of them.

This is pushing analysts out the door, as two thirds (67%) of SecOps (Security Operations) analysts are considering or actively leaving their jobs.

The survey of over 2,000 IT security analysts found the size of their organisation’s attack surface (63%), and the number of security tools (70%) and alerts (66%) they manage, has significantly increased in the past three years. This is creating a “spiral of more” which threatens to overwhelm their ability to respond quickly to alerts and manage breaches and is causing analysts to consider leaving their jobs.

What’s more, sifting through false alerts is costing organisations approximately $3.3bn annually in the US alone, and using up analysts time to spot and respond to potentially serious breaches. Other key findings from the research include:

  • 39% say there’s so much noise, it’s only a matter of time until they miss something.
  • 39% agree the security tools they work with increase their workload rather than reduce it.
  • 41% agree that security vendors flood analysts with pointless alerts because they are afraid of not flagging a breach.
  • The most common reason analysts gave for leaving or considering leaving their role was spending too much time sifting through poor quality alerts (39%).
  • Other reasons given included constant stress (35%), burnout (34%), and feeling “mind-numbingly bored” (32%).

“As enterprises shift to hybrid and multi-cloud environments, security teams are continually faced with more – more attack surface, more attacker methods that evade defenses, more noise, more complexity, and more hybrid attacks,” said Kevin Kennedy, senior vice president of products Vectra AI. “The current approach to threat detection is broken, and the findings of this report prove that the surplus of disparate, siloed tools has created too much detection noise for SOC analysts to successfully manage and instead fosters a noisy environment that’s ideal for attackers to invade. As an industry, we cannot continue to feed the spiral, and it’s time to hold security vendors accountable for the efficacy of their signal. The more effective the threat signal, the more cyber resilient and effective the SOC becomes.”

Image by Ahmed from Pixabay

Amazon drives IaaS market to new highs

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The worldwide infrastructure as a service (IaaS) market grew 29.7% in 2022, to total $120.3 billion, up from $92.8 billion in 2021, according to new data.

Analysis by Gartner indicates Amazon retained the No. 1 position in the IaaS market in 2022, followed by Microsoft, Alibaba, Google and Huawei.

Cloud has been elevated from a technology disruptor to a business disruptor,” said Sid Nag, VP Analyst at Gartner. “IaaS is driving software-as-a-service (SaaS) and platform-as-a-service (PaaS) growth as buyers to continue to add more applications to the cloud and modernize existing ones.”

“IaaS growth in 2022 was stronger than expected, despite a slight softening in the fourth quarter as customers focused on using their previously committed capacity to its fullest potential,” added Nag. “This is expected to continue until mid-2023 and is a natural outcome of the market’s maturity. We expect an acceleration in 2024, as there is still room for plenty of additional future growth.”

In 2022, the top five IaaS providers accounted for over 80% of the market. Amazon continued to lead the worldwide IaaS market with revenue of $48.1 billion and 40% market share (see Table 1).

Table 1. Worldwide IaaS Public Cloud Services Market Share, 2021-2022 (Millions of U.S. Dollars)

Company 2022
Revenue
2022 Market
Share (%)
2021
Revenue
2021 Market
Share (%)
2021-2022
Growth (%)
Amazon 48,126 40.0 35,380 38.1 36.0
Microsoft 25,858 21.5 19,153 20.6 35.0
Alibaba Group 9,281 7.7 9,060 9.8 2.4
Google 9,072 7.5 6,433 6.9 41.0
Huawei 5,249 4.4 4,190 4.5 25.3
Others 22,746 18.9 18,565 20.0 22.5
Total 120,333 100 92,782 100 29.7

Source: Gartner (July 2023)

Microsoft followed in the No. 2 position with 21.5% share, reaching over $25 billion in IaaS public cloud revenue in 2022. Microsoft’s software-first strategy continued to support its IaaS growth as customers required more cloud capacity to support automation, advanced analytics and digital workplace capabilities.

Alibaba Group again held the No. 3 position with 7.7% market share, although with modest 2.4% year over year growth. While Alibaba continued to lead the IaaS market in China, its limited potential for expansion across global markets has slowed growth, driving its recent decision to spin off its Alibaba Cloud business into a separate entity.

Google saw the highest growth rate of the top five IaaS vendors, growing 41% in 2022 to reach over $9 billion in revenue. Google’s increased investment in sovereign cloud and expanded sales and marketing partner programs helped to broaden its customer base and drive additional IaaS revenue.

Huawei rounded out the top five IaaS vendors with 4.4% market share and $5.2 billion in revenue for 2022. Since its 2020 pivot to an increased focus on cloud, Huawei has been steadily growing its IaaS revenue in China and emerging markets.

Generative AI will continue to drive the cloud market forward, particularly as hyperscalers look to support offerings beyond the existing, democratized generative AI solutions,” said Nag. “As enterprises integrate generative AI into their technology portfolio, new markets and opportunities for cloud hyperscalers will emerge related to sovereignty, ethics, privacy and sustainability.”

Image by ananitit from Pixabay

Banking and investment sector IT spending to hit $652bn this year

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Worldwide banking and investment services IT spending is forecast to total $652.1 billion in 2023, an increase of 8.1% from 2022, with software experiencing the largest growth with an increase of 13.5%.

“Current economic headwinds have changed the context for technology investments in banking and investment services this year,” said Debbie Buckland, Director Analyst at Gartner. “Rather than cutting IT budgets, organizations are spending more on the types of technologies that generate significantly higher business outcomes. Spending on software, for example, is shifting away from building it in-house, in favor of buying solutions that generate value from investments more rapidly.”

According to the Gartner 2023 CIO and Technology Executive Survey, banking and investment services CIOs will spend the largest amount of new or additional funding in 2023 on cybersecurity, data and analytics, integration technologies and cloud.

More than half plan to increase investments in cloud, while reducing IT spending in their own data centers. This is reflected by slower growth in data center systems spending from 13.2% in 2022 to 5.7% in 2023 (see Table 1). Banks are disengaging from tangible assets and capital expenditure (capex) in favor of adopting services and operating expenditure (opex), to meet evolving customer and market expectations.

Table 1. Worldwide Banking and Investment Services IT Spending Forecast (Millions of U.S. Dollars)

  2022 Spending 2022
Growth (%)
2023 Spending 2023
Growth (%)
Data Center Systems 34,467 13.2 36,433 5.7
Devices 37,961 -9.9 37,149 -2.1
Internal Services 52,933 -2.2 55,156 4.2
IT Services 246,698 5.2 269,735 9.3
Software 153,268 11.2 174,014 13.5
Telecom Services 77,736 -2.9 79,599 2.4
Total 603,063 4.1 652,086 8.1

Source: Gartner (June 2023)

“To deal with the current economic climate, banking and investment services CIOs are now prioritizing more conservative objectives that support resilient and sustainable growth, such as a better customer experience (CX) and more efficient operations,” said Pete Redshaw, VP Analyst at Gartner. “This is a change from previous years when outright growth – new territories, new customers, new lines of business – was the primary objective of banking CEOs.”

Driven by the increased use of consulting services and infrastructure as a service (IaaS), IT services will be the largest spending category, forecast to reach almost $270 billion in 2023. This is an increase of 9.3% over 2022, reflecting the increasingly important role IT service providers play in helping banking and investment services organizations navigate emerging opportunities and challenges.

“Economic uncertainty is leading organizations to break down long-term contracts into multiple shorter projects,” said Buckland. “They’re also reluctant to sign new contracts, commit to long-term initiatives or take on new technology partners, which is driving an increase in the use of IT consulting services.”

With the global talent shortage impacting banking and investment services organizations, spending on internal services will increase by 4.2% in 2023 to support the increased costs of hiring and retaining talent.

“Even after the recent widespread redundancies at many of the technology giants, banks are no longer seen automatically by top talent as the most desirable, rewarding or stimulating destinations,” said Redshaw. “More innovative solutions are needed, such as dropping the requirement for university education and adding benefits such as lifetime retraining, hybrid teams, agile methods and fintech partnerships.”

AI and edge computing taking video surveillance in to new phase of growth

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New advancements in Artificial Intelligence (AI) and edge computing for video analytics are energising the video surveillance market, with these trends driving the global installed base of cameras to 1.2 billion in 2030.

“By harnessing new advancements in AI and edge computing, all areas of a business can consider surveillance cameras as intelligent Internet of Things (IoT) devices that can gather data and issue alerts without human intervention,” says Lizzie Stokes, IoT Hardware & Devices and IoT Networks & Services Analyst at ABI Research. “The surveillance cameras on the market today are smarter and more powerful than their predecessors, prompting more companies to view cameras as accurate sensors that can predict human behavior.”

Lines of business such as marketing and HR are investing in video analytics solutions and smart cameras to bolster company profits and improve operational efficiency. These expanded use cases are increasing the business value of video surveillance cameras, once considered customary tools reserved for security and monitoring teams. Business units use AI-equipped surveillance solutions to track customer spending and satisfaction and monitor employee health and safety.

Verticals like manufacturing use smart cameras to spot defective products on the factory floor, and municipalities use video surveillance solutions to improve public safety and optimize traffic patterns. New use cases for AI video analytics are transforming the industry as more customers shift investments toward services that mine surveillance footage for operational insights. Video surveillance vendors will continue to evolve their business models and product offerings to meet new demand from verticals and lines of business. Evolutions in camera connectivity technology have introduced new form factors, like advanced body cameras for law enforcement and cellular trail cameras for hunters. These new form factors and use cases will invigorate a market experiencing lower shipment growth.

Most surveillance camera manufacturers today provide AI-equipped cameras, and these smart devices have been essential catalysts in moving cameras beyond their traditional uses in security. Key video surveillance companies include Axis Communications, Honeywell, and Bosch. Motorola has also become an important player in the market after acquiring several popular video surveillance brands, some featuring cloud product portfolios. Chinese manufacturers Hikvision and Dahua continue to be the largest and most controversial companies in the video surveillance market, as more Western governments ban or remove their products from governmental buildings out of concerns for national security.

“The video surveillance industry experienced higher growth a decade ago and has since grappled with international disagreements, privacy concerns, and the threat of increased regulation. Though the market is maturing now, it has the potential to be transformed by new, value-adding use cases and form factors,” Stokes concluded.

Government CIO spending on IT predicted to grow 8% in 2023

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Worldwide government IT spending is forecast to total $589.8 billion in 2023, an increase of 7.6% from 2022, with inflation and skills shortages among the top considerations fort CIOs.

That’s according to research from Gartner, which says that this year they will also ensure their digital projects endure mission impact. An increasing number of government institutions are already putting in place at least one digital metric linked directly to outcomes associated with their organization’s public purpose or mission.

By 2026, Gartner foresees over 75% of governments will gauge digital transformation success by measuring the enduring mission impact.

“Global challenges like inflation and workforce scarcity and their local repercussions are testing the abilities of government CIOs to respond with appropriate service delivery mechanisms and organizational accountability,” said Apeksha Kaushik, Principal Analyst at Gartner. “In addition, the “great resignation” and the competing demand from the commercial sector have forced governments to re-examine their approaches to counterbalance internal talent scarcity.

“Governments are increasingly spending their IT budgets to replace legacy applications. Gartner’s 2023 CIO and Technology Executive Survey showed that 57% of government CIOs plan to increase funding for application modernisation in 2023, up from 42% in 2022,”

Software to Remain Highest Spending Segment in 2023

In 2023, software will continue to be the highest growing segment in 2023 (see Table 1). Application modernization investments will increase supported by more software-as-a service-based solution offerings. The use of low-code application platforms (LCAPs) is also on the rise and will further accelerate legacy modernization efforts.

Table 1. Worldwide Government IT Spending Forecast (Millions of U.S. Dollars)

Segment 2022 Spending 2022 Growth (%) 2023 Spending 2023 Growth (%)
Data Center Systems 25,760 11.1 26,623 3.3
Devices 34,224 -8.7 32,643 -4.6
Internal Services 66,940 -2.3 69,178 3.3
IT Services 191,958 3.4 209,103 8.9
Software 161,894 10.0 183,733 13.5
Telecom Services 67,583 -4.9 68,514 1.4
Total 548,359 2.9 589,794 7.6

Source: Gartner (May 2023)

Government spending on IT services will continue unabatedly in 2023. “Compensation constraints and limited resources to attract and retain IT talent is becoming an even bigger challenge today as many governments are facing IT talent shortage,” said Kaushik.

To continue modernizing and innovating critical IT infrastructure and applications, some government organizations will embrace a multisourced workforce strategy by optimizing the use of internal IT talent and investing in employee experience tools to empower and spark innovation, as well as partnering with external IT service providers to speed time to value.

Throughout 2023, government organizations will continue to invest in initiatives that improve access to digital services as constituents increasingly demand experiences that are equivalent to online customers.

While digital transformation remains a top priority for governments, some government CIOs have indicated they are falling short in realizing maximum benefits from their digital investments. “Government CIOs who are moving beyond scaling digital solutions across their critical services are ensuring that further investment in digital solutions can directly impact how they achieve the mission or public purpose of their organization,” said Kaushik.

Research pinpoints advanced persistent threats to businesses in Europe

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A new study has revealed a ‘worrying’ lack of visibility into networks that exposes organisations to cyber risks and large-scale disruptions that can inflict substantial losses.

Gatewatcher’s inaugural analysis of the pan-European, advanced persistent threat (APT) landscape draws on responses from of 300 IT decision-makers across the UK, France and Germany, highlighting the main fears faced by organisations and the solutions they use to address the challenges of APT threats.

The survey shows a clear awareness of APT threat detection with more than 9 in 10 currently looking for APTs. When asked about their attitudes and the main obstacles they face in their fight against these threats, 25% of respondents currently seek to detect and discover APTs but face challenges identifying the method of entry.  A further 21% face challenges supporting the technology.

These concerns are within the context of APTs being addressed within the organization – the study also revealed that just under 1 in 5 (19%) currently outsource their protection against APTs to a managed service provider (MSP) or managed security service provider (MSSP).

APT: lack of visibility as a risk factor

When asked to address the specific issues surrounding APTs and how they might compromise the security posture or their organisation, just under half (47%) of respondents identified a lack of visibility throughout the network as a key factor, whilst a further 40% disclosed a lack of the necessary skills within their security teams.

A further 35% also mentioned gaps in current endpoint provision and nearly a third (30%) cited false positive and the subsequent alert fatigue as a source of security compromise. Reflecting the increased awareness of the importance of securing the supply chain, 29% identified third-party subcontractors that are connected to an organisation’s systems as a source of APT threat.

 Security Challenges Ranking: Perception gaps

 The survey also identifies six security challenges ranked by perceived risk level. Across all three markets, the cybercrime threat of individual bad actors, such as independent black hats, hacktivists or script kiddies is seen as the most pressing cyber security challenge faced by organisations, identified by 54% of respondents.

The study also points to differences in perception between British, French, and German decision-makers. In France, data loss tops the list of concerns (65%), while the threat from independent hackers is the top concern in Germany and the UK (62% and 52% respectively). Ransomware is also the second biggest concern for German IT decision makers (52%), compared to 47% and 43% in France and the UK.

NDR: a future solution to APTs

When asked to detail the technology portfolio used against APTs, Endpoint Detection & Response (EDR) was the most present, cited by nearly two-thirds (62%) of respondents.  This was followed by firewalls (57%) and then a very close third and fourth between Security Information and Event Management (SIEM) and Network Detection and Response (NDR) with 56% and 55% respectively.

The emergence of NDR solutions in fourth place illustrates the growing need for IT decision-makers to have visibility across the entire IT network and to protect themselves against large-scale threats, with potentially catastrophic impacts.

Gatewatcher’s Cyber Threat Barometer – our monthly, active monitoring and Cyber Threat Intelligence solution -, provides an overview of cyber threats, including the evolution of certain advanced persistent threats – but this is only the thin end of an extremely dangerous wedge,” said Philippe Gillet, CTO of Gatewatcher. He adds: “By providing a snapshot of APT threats and challenges, this study conducted by Vanson Bourne aims to contribute to the constructive search for solutions for the future. The results are encouraging: it shows us that businesses are still relying heavily on endpoint protection, whilst recognising that it is visibility across the network that is now needed to address APTs. As recent examples have shown, these advanced attacks exhibit patience and strategic thinking.  As such, it is time to evolve and adapt our approach to the threat landscape and see APTs as the new normal in cybersecurity. This will mandate network technologies that offer high visibility of threats hidden in the network and represent an essential lever for strengthening the cybersecurity posture of businesses.’’

Worldwide public cloud end-user spending to hit $600bn in 2023

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Worldwide end-user spending on public cloud services is forecast to grow 21.7% to total $597.3 billion in 2023, up from $491 billion in 2022, according to the latest forecast from Gartner.

Cloud computing is driving the next phase of digital business, as organizations pursue disruption through emerging technologies like generative artificial intelligence (AI), Web3 and the metaverse.

“Hyperscale cloud providers are driving the cloud agenda,” said Sid Nag, Vice President Analyst at Gartner. “Organizations today view cloud as a highly strategic platform for digital transformation, which is requiring cloud providers to offer more sophisticated capabilities as the competition for digital services heats up.”

“For example, generative AI is supported by large language models (LLMs), which require powerful and highly scalable computing capabilities to process data in real-time,” added Nag. “Cloud offers the perfect solution and platform. It is no coincidence that the key players in the generative AI race are cloud hyperscalers.”

All segments of the cloud market are expected see growth in 2023. Infrastructure-as-a-service (IaaS) is forecast to experience the highest end-user spending growth in 2023 at 30.9%, followed by platform-as-a-service (PaaS) at 24.1% (see Table 1).

Table 1. Worldwide Public Cloud Services End-User Spending Forecast (Millions of U.S. Dollars)

  2022 2023 2024
Cloud Application Infrastructure Services (PaaS) 111,976 138,962 170,355
Cloud Application Services (SaaS) 167,342 197,288 232,296
Cloud Business Process Services (BPaaS) 59,861 65,240 71,063
Cloud Desktop-as-a-Service (DaaS) 2,525 3,122 3,535
Cloud Management and Security Services 34,487 42,401 51,871
Cloud System Infrastructure Services (IaaS) 114,786 150,310 195,446
Total Market 490,977 597,325 724,566

BPaaS = business process as a service; IaaS = infrastructure as a service; PaaS = platform as a service; SaaS = software as a service
Note: Totals may not add up due to rounding.
Source: Gartner (April 2023)

Gartner predicts that by 2026, 75% of organizations will adopt a digital transformation model predicated on cloud as the fundamental underlying platform.

“The next phase of IaaS growth will be driven by customer experience, digital and business outcomes and the virtual-first world,” said Nag. “Emerging technologies that help businesses interact more closely and in real time with their customers, such as chatbots and digital twins, are reliant upon cloud infrastructure and platform services to meet growing demands for compute and storage power.”

While cloud infrastructure and platform services are driving the highest spending growth, SaaS remains the largest segment of the cloud market by end-user spending. SaaS spending is projected to grow 17.9% to total $197 billion in 2023.

“The technology substrate of cloud computing is firmly dominated by the hyperscalers, but leadership of the business application layer is more fragmented,” said Nag. “Providers are facing demands to redesign SaaS offerings for increased productivity, leveraging cloud-native capabilities, embedded AI and composability – particularly as budgets are increasingly driven and owned by business technologists. This change will ignite a wave of innovation and replacement in the cloud platform and application markets.”

IT spending to hit $4.6 trillion in 2023

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Worldwide IT spending is projected to total $4.6 trillion in 2023, an increase of 5.5% from 2022 – despite continued global economic turbulence, all regions worldwide are projected to have positive IT spending growth.

“Macroeconomic headwinds are not slowing digital transformation,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “IT spending will remain strong, even as many countries are projected to have near-flat gross domestic product (GDP) growth and high inflation in 2023. Prioritisation will be critical as CIOs look to optimise spend while using digital technology to transform the company’s value proposition, revenue and client interactions.”

The software segment will see double-digit growth this year as enterprises prioritize spending to capture competitive advantages through increased productivity, automation and other software-driven transformation initiatives. Conversely, the devices segment will decline nearly 5% in 2023, as consumers defer device purchases due to declining purchasing power and a lack of incentive to buy (see Table 1).

Table 1. Worldwide IT Spending Forecast (Millions of U.S. Dollars)

  2022 Spending 2022 Growth (%) 2023 Spending 2023 Growth (%) 2024 Spending 2024 Growth (%)
Data Center Systems 216,095 13.7 224,123 3.7 237,790 6.1
Devices 717,048 -10.7 684,342 -4.6 759,331 11.0
Software 793,839 8.8 891,386 12.3 1,007,769 13.1
IT Services 1,250,224 3.5 1,364,106 9.1 1,502,759 10.2
Communications Services 1,424,603 -1.8 1,479,671 3.9 1,536,156 3.8
Overall IT 4,401,809 0.5 4,643,628 5.5 5,043,805 8.6

Source: Gartner (April 2023)

As enterprises navigate continued economic turbulence, the split of technologies being maintained versus those driving the business is apparent in their position relative to overall average IT spending growth.

“CIOs face a balancing act that is evident in the dichotomies in IT spending,” said Lovelock. “For example, there is sufficient spending within data center markets to maintain existing on-premises data centers, but new spending has shifted to cloud options, as reflected in the growth in IT services.”

The IT services segment will continue its growth trajectory through 2024, largely driven by the infrastructure-as-a-service market, which is projected to reach over 30% growth this year. For the first time, price is a key driver of increased spend for cloud services segments, rather than just increased usage.

Exposure from Bank Failures Remains Contained, but Tech CEOs Must Prepare for Disruption

The collapse of Silicon Valley Bank, Signature Bank and Credit Suisse created a shockwave within the banking and tech industries. While exposure remains relatively contained, tech startups are likely to face renewed questions and scrutiny from stakeholders, clients and prospects.

“This is not just a tech problem, as these firms lent money to all forms of startups – not just IT,” said Lovelock. “Tech CEOs must urgently ensure they are moving their organization forward by conserving working capital, monitoring the impact on cash, securing access to credit and keeping a close eye on talent and culture. Once the organization is properly prepared, tech CEOs can then direct and engage employees to find, accelerate and execute on market opportunities.”

Tech Talent Shortages Continue Amidst Layoffs

Even as layoffs continue to impact the tech industry at large, there is still a critical shortage of skilled IT labor. The demand for tech talent greatly outstrips the supply, which will continue until at least 2026 based on forecast IT spend.

“Tech layoffs do not mean that the IT talent shortage is over,” said Lovelock. “IT spending on internal services is slowing in all industries, and enterprises are not keep up with wage rate increases. As a result, enterprises will spend more money to retain fewer staff and will turn to IT services firms to fill in the gaps.”

Democratisation of technology among the top trends impacting providers and buyers

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The top trends that will impact technology providers  and buyers through 2025 will be driven by businesses increasing their reliance on technology, new opportunities emerging through technology and the impact of external macro forces.

That’s according to a study from Gartner, which asserts that as the march of digitalisation continues even amidst disruption, technology providers have a leading role to play.

Rajesh Kandaswamy, Distinguished VP Analyst and Gartner Fellow, said: “In 2023, product leaders and technology executives must balance short-term planning with long-term strategy to stay ahead of the immediate shocks to the economy and the underlying ‘permacrisis’ forces shaping business.”

Here are the trends Gartner identified that will impact technology customers, buyers, products, ecosystems, business models and operating models worldwide for at least the next three years:

Democratisation of Technology

The democratization of technology empowers non-IT workers to seek out, select, implement and custom fit their own technology. This trend offers opportunities to meet the needs of a new set of citizen developers and business technologists. Gartner predicts that by 2025, 55% of all successful emerging technology solutions will be delivered to “nontraditional” buyers – for example, outside IT – within enterprises, enabling vendors to expand into new markets and forge new customer relationships.

Federated Enterprise Technology Buying

In a federated buying process, buying decisions are made by representatives across the business. Driven by the democratization of technology, federated enterprise technology buying is accelerating, with just 26% of technology buyers in a recent Gartner survey reporting that purchases are funded solely by IT.

“Federated buying creates opportunities for product leaders as it enables a focus on more value-added services for business customers,” said Emil Berthelsen, VP Analyst at Gartner. “However, it also adds complexity, forcing changes to go-to-market models and demanding a greater focus on value scenarios and outcomes.”

Product-Led Growth

Product-led growth (PLG) is a go-to-market strategy in which users experience value through free product offers or interactive or automated demonstrations. Then, users are either converted directly to paid accounts or their advocacy and influence helps to drive purchases. By 2025, 95% of software-as-a-service (SaaS) providers will employ a form of self-service PLG for new customer acquisition.

“PLG is hitting its stride in B2B after much acclaim in the B2C technology world,” said Kandaswamy. “It can reduce cost to acquire customers and shorter sales cycles relative to traditional buyer-oriented, top-down marketing and sales strategies.”

Co-Innovation Ecosystems

The co-innovation ecosystem approach is an emerging practice that enables the convergence of internal, external, collaborative and co-creative ideas to create new value. Businesses are actively using technology to differentiate and succeed, so they are increasingly co-innovating with tech providers.

“With a co-innovation partner ecosystem, technology providers can meet pressing customer needs through use of shared skills, technology expertise, investment and incentives,” said Kandaswamy.

Digital Marketplaces

Technology buyers are embracing digital marketplaces to easily find, procure, implement and integrate technology solutions. Non-tech buyers are also increasingly looking to marketplaces to meet their requirements for composable and easily consumable technology solutions.

“Technology and service providers are increasing their investment in marketplace channels as they seek growth opportunities and competitive advantage,” said Kandaswamy. “A digital marketplace accelerates time to market, extends outreach to target segments, expands partner ecosystems and speeds up the sales cycle.”

Intelligent Applications

Intelligent applications will create value and disrupt markets by learning, adapting and generating new ideas and outcomes. For example, generative artificial intelligence (AI) is an emerging technology quickly gaining traction for commercial use within intelligent applications. Generative AI can produce novel media content (including text, image, video and audio), synthetic data and models of physical objects.

“Product leaders should expect generative AI features that empower workforces with augmented and creative capabilities to be a new competitive front in intelligent applications,” said Kandaswamy.

Metaverse Technologies for Marketing and Customer Experience (CX)

Metaverse technologies are rapidly gaining traction in marketing for creating unique experiences, impactful interactions and novel engagement. By 2027, over 40% of large organizations worldwide will be using a combination of Web3, spatial computing and digital twins in metaverse-based projects aimed at increasing revenue.

“B2B marketers have an opportunity to apply metaverse technologies and the immersive experiences they provide to expand customer reach and engagement and improve CX,” said Kandaswamy. “Early adopters are using metaverse technologies to host events in virtual spaces, conduct internal and external sales meetings, showcase products and more.”

Sustainable Business

“Sustainable business has transformed into a ‘must have’ rather than a ‘nice to have,’” said Kandaswamy. “In an increasingly technology-driven world, sustainable business is underpinned by sustainable technology.”

Technology providers must improve the sustainability of their products that enable sustainable business outcomes. A recent Gartner survey found that 42% of leaders are currently leveraging sustainability activities to drive innovation, differentiation and enterprise growth through sustainable products. Gartner predicts that by 2025, tech providers that can quantify their offering’s positive contribution to customers’ sustainability objectives will increase their win rate by 20%.

Techno-nationalism

A trend away from globalization and into mercantilism is causing global markets to become increasingly local, impacting global technology ecosystems. Policy decisions are driving countries to implement of digital sovereignty regulations, causing a divergence of technology stacks. In response to this trend, product leaders must balance meeting specific country-level localization needs and product profitability.

Bets being placed on B2B metaverse leaders

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As metaverse-related B2B use cases start emerging, companies such as Meta and Microsoft are trending across signals, including news, job postings, filing mentions, patents, and influencer discussions.

In it’s latest research GlobalData cites Mercedes-Benz and BAE Systems recently collaborating with Microsoft for virtual manufacturing and simulation. Both companies aim to drive supply chain efficiencies and generate virtual twins for their manufacturing processes.

Rinaldo Pereira, Business Fundamentals Analyst at GlobalData, said: “An analysis of GlobalData’s Company Analytics database reveals that companies are actively exploring practical applications for the metaverse within a B2B context, beyond its current conceptualization. The metaverse has the potential to revolutionize industrial manufacturing, and virtual prototyping can help save time and resources, and reduce the need for expensive physical prototypes.”

The metaverse can be used to create virtual showrooms like FIAT’s metaverse store allowing customers to interact with vehicles in a realistic, immersive environment. This use case helps improve customer experience.

Pereira added: “An example of virtual showrooms was FIAT teaming up with Microsoft and Touchcast for the FIAT metaverse store at CES 2023. The metaverse dominated conversations around #CES2023 on social media, stealing the spotlight and generating buzz.”

GlobalData expects a metaverse’ winter in 2023, however its potential will likely not dampen. Metaverse and virtual reality were the key topics and witnessed a staggering 800% month-on-month growth during 05 December 2022 – 04 January 2023 over the previous month among the Twitter influencer conversations about “#CES2023”.

Meta is also forging ahead with strategic partnerships. For example, the collaboration between Intel and Meta is set to bring low-latency wireless VR gaming. Meta had also announced partnerships with Accenture and Microsoft earlier in 2022.

Pereira concluded: “While still at conceptual stage, the metaverse can allow companies to create immersive, interactive training simulations to improve employee productivity. Virtual factories or digital twins can also help in remote team collaborations across different geographies. As Twitter was abuzz with #CES2023, it is evident that the Metaverse continues to capture the attention of influencers.”