As technology companies head into a new year, they must focus on crafting the next chapter and building strategies to ensure smooth sailing, especially through the modern-age turmoil that demands the attention of innovators and decision-makers alike. Read on as we round up the top technology trends of 2023 in our latest technology industry outlook.
Emerging Challenges of Technology Companies
The new year holds tremendous potential for the technology industry. Although the business landscape today is far less constrained by geography, finances, or language barriers, the sector, like every other, is spurred by volatile global events that are impacting momentum. The ongoing commotion results from a hide-n-seek game between the volume and variety of macroeconomic trends causing inflation to rise at a pace not seen in decades. On the one hand, where hiring freezes and layoffs are becoming increasingly rampant, on the other, job openings for data scientists and cybersecurity experts continue to remain vacant. As interest rates surge, a recession is inevitable. All of these forces, acting as crosswinds rather than headwinds, are set to reshape the technology industry in the coming year(s).
Although there is a constant demand for technology, CIOs are growing aware of how tough it is to grow or maintain an in-house team. Most CXOs have become wiser and understand the time, effort, and money saved by getting professional help. Technology management is all about seasoned teams trained to turn sour situations into sweet deals in no time with their years of experience while resolving unforeseen problems – no matter how big or small.
Increasing resilience is probably a top priority that will enable companies to deal with current uncertainties and help them leap into the future, as is strengthening the technology foundation and driving innovation. Let’s look at the emerging challenges of technology companies in 2023 and beyond:
- The explosive growth of the technology sector, coupled with the rapidly changing landscape, presents significant challenges to companies, requiring them to proactively address and prepare for evolving challenges.
- As competition increases, technology companies will constantly struggle to launch new products and services and maintain their competitive position.
- With cyberattacks on the rise, cybersecurity concerns will plague the technology sector, requiring companies to embrace robust security models and integrate security into the very foundation of their business.
- Talent will continue to be a growing challenge for technology companies in 2023; with digital transformation happening at lightning-fast speed, the skills gap is constantly widening, making it difficult for companies to find, hire, and retain skilled talent.
- Increasing focus on sustainability will put the technology industry in a tight spot, compelling organizations to find new ways of keeping up with the sustainability demands of consumers, partners, and investors alike.
Crafting Strategies to Steer the Coming Year
According to the latest forecast by Gartner, worldwide IT spending is projected to total $4.6 trillion in 2023, an increase of 5.1% from 2022. This demand for IT is driven primarily by the need to kickstart several new digital business initiatives in response to the ongoing economic turmoil. The demand for cloud services, the widening skills gap, and the acceleration in digital initiatives are working in favor of the technology sector, with organizations looking for strategic consulting, implementation support, and managed infrastructure services.
With organizations struggling to accelerate digital transformation, resource-constrained CIOs are increasingly turning to the technology industry to bring in more consultants, reduce the complexity of digital initiatives, and ramp up agile strategies. Despite emerging challenges, technology companies have more opportunities than ever to diversify their workforce, connect with new customers, and develop new products. Whether widening current offerings or pivoting to a new business model, companies must keep evolving – while keeping challenges in mind and building on lessons learned to change direction and attain new heights.
As economic turbulence changes the context for technology investments, a continued focus on tech and innovation will power the sector to support this growth rate and provide more stability to organizations. Here are some technology trends in 2023 that technology organizations must keep in mind while crafting their innovation strategies:
1. Industry Clouds
As technology companies leverage digital innovations to reshape their revenue stream, they must focus on adding industry-specific cloud products and services into their portfolio. This will help change the cash flow and existing products and services value proposition. Instead of having organizations buy, build, and assemble complex technology to meet unique business needs, they must offer simple, configurable off-the-shelf, industry cloud platforms that can be easily and quickly implemented across different sectors. An industry-specific, cloud-first approach will allow organizations to limit technology-related capital spending in favor of predictable expenses while also enabling them to meet demands unique to their business and sector.
2. FinOps
In the coming year, eliminating CapEx will not be sufficient. Technology companies will also have to embrace ways to optimize OpEx, making expenses more manageable and predictable. By bringing the finance and DevOps disciplines together, FinOps will allow the technology sector to maintain financial accountability for tech investments. With numerous internal and external pressures across labor shortages, inflation, and time-to-market deadlines wreaking havoc, FinOps will empower cross-discipline IT and finance teams to collaborate effectively and enable better business decision-making across digital investments and scalability – without the need for additional personnel.
3. Security First
To cater to evolving security concerns, the technology industry will have to build and offer comprehensive security frameworks to help organizations become truly secure. They will have to set the bar for effective, efficient, and practical cybersecurity inside complex IT environments, so they can address security incidents in time. A strong security framework will help organizations assess the current level of cybersecurity and understand when, where, and how to advance to the next stage. It will also help create a culture of cybersecurity, build awareness, and train users to become champions for cyber safety.
4. App Modernization
With sustainability concerns growing, technology companies must encourage organizations to modernize and rationalize existing technology systems – instead of always implementing new solutions from scratch. Such strategic identification of systems that can be refactored, consolidated, or rehosted can curtail legacy sprawl and limit technology debt while paving the way for sustainability and performance improvements. Consolidating and optimizing years of spending on tech licenses and on-premises resources can further address end-of-service concerns and enhance security and compliance.
5. M&A
As staffing shortfalls and economic uncertainty continue to crush spirits, technology companies will need to strengthen their M&A game to gear up for the shifting market. With digital transformation projects expected to persist in 2023, companies will need to acquire, partner, or forge alliances with service providers to meet evolving customer mandates. Acquisitions will enable the technology sector to tap into existing expertise and open doors to several benefits: from accelerated response times to better agility, optimized digital experiences to quicker transformation.
Navigating the Technology Trends of 2023
Given the crucial role technology plays in the success of any organization, enterprise IT spending is only growing. But as global supply chains get increasingly disrupted, several bottlenecks, delays, and disruptions impact how products and services are delivered. For the technology sector, this means staying abreast with current (and future) challenges and opportunities and enhancing the ability to think outside the box.
Technology companies must reflect on the year that has passed and take those learnings to plan for the coming year. Although economic uncertainty might change the context for tech investments, with the spike in digital transformation, the technology sector will need to embrace trends across industry clouds, FinOps, security, app modernization, and mergers and acquisitions (M&A) to keep up with the incredible speed at which technology is evolving.
With the new year here, now is the time to act! Contact us today to speak with a member of our team!
