Tough Times Ahead for Tech? Not So Fast, Say the Numbers

With all of the news about the economic downturn and layoffs at tech companies, it would be a fair assumption that the tech sector is in for some tough times ahead. But a recent spending report from the U.S. government shows that’s not the case.

According to the report on third-quarter gross domestic spending (GDP), investment in equipment and intellectual property actually saw a double-digit increase. Spending on software, hardware, and communications equipment rose at an annual pace of 10.8%.

The reported increase in spending jibes with analyst reports from Gartner and others, who see an increase (albeit slight) in tech spending in 2022 and a larger increase in 2023.

Gartner predicts a 5.1% rise in tech spending next year after staying pretty much flat this year, increasing less than 1%. At the same time, CFRA Research analysis shows tech industry profits are expected to increase 2% this year and another 6% in 2023.

Cloud spending continues to rise, but at a smaller clip than in years past. In 2023, cloud computing revenues are expected to hit $101 billion, according to Gartner, rising about 20% in the next two to three years.

Activate’s State of Demand Gen 2022 report results also show the economic slowdown isn’t impacting B2B tech spending, with a significant number (46%) of respondents to the annual survey expecting their demand gen budgets to increase in the coming year. Of those, smaller companies are more likely to increase their demand budgets (63%), perhaps to gain ground—and market share—on enterprise organizations, which are being more conservative with their demand spend (30%).

The overall slowdown in spending has impacted consumer tech more so the B2B space, as Apple, Microsoft and others are still in the hangover stage brought on by massive spending in 2020 by companies and individuals to create or improve their work-from-home setup during the pandemic.

Of course, the increase in B2B tech spending is good news for tech companies, which will have an easier time than companies in other verticals, such as construction, which saw a decline. That said, it’s an excellent time for tech marketers to double their efforts to ensure they continue the momentum of the past few years.

Activities such as full-funnel demand generation can help organizations identify ready buyers and nurture prospects. And, as the results of the State of Demand Gen survey show, more companies are adopting a full-funnel approach as they recognize the importance of both nurturing (mid-funnel) and converting demand (bottom-funnel) in addition to capturing demand (top-of-funnel).

Interested in learning more about how Activate can help you in your full-funnel demand-gen efforts? We’re here to answer your questions and develop a program that delivers results for your organization.

Indeed, it’s a good time for tech marketers to keep up the momentum, as their customers are still spending even in this environment. Tech buyers continue to be in a buying mood, and tech marketers don’t want to miss that opportunity.