New Category of Business Buyers are Occupying a Larger Share of the Overall IT Market
By 2024, 80% of technology products and services will be built by those who are not technology professionals, according to Gartner, Inc.
This trend is driven by a new category of buyers outside of the traditional IT enterprise who are occupying a larger share of the overall IT market. Today, total business-led IT spend averages up to 36% of the total formal IT budget.
“Digital business is treated as a team sport by CEOs and no longer the sole domain of the IT department,” said Rajesh Kandaswamy, distinguished research vice president at Gartner. “Growth in digital data, low-code development tools and artificial intelligence (AI)-assisted development are among the many factors that enable the democratization of technology development beyond IT professionals.”
COVID-19 Drives the Development of New Products and Services
Technology encroachment into all areas of business and among consumers creates demand for products and services outside of IT departments. These buyers’ needs do not always fit neatly into offerings from traditional providers.
This has been compounded by the COVID-19 crisis, which has only expanded the amount and type of use cases technology is needed to fulfill. In 2023, Gartner anticipates that $30 billion in revenue will be generated by products and services that did not exist pre-pandemic.
Gartner analysts said the rapid expansion of cloud services, digital business initiatives and remote services opened the door for new possibilities in integrations and optimization.
Over One-Third of Technology Providers Will Compete with Nontechnology Providers by 2024
COVID-19 also reduced barriers for those outside of IT to create technology-based solutions by providing an entry point for anyone who was able to serve pandemic-induced needs. These entrants include nontechnology professions within enterprises – or “business technologists” – citizen developers, data scientists and AI systems that generate software.
Technology providers are now finding themselves increasingly entering markets related to, or in competition with, nontechnology providers, including innovative firms in financial services and retail. The latter is creating IT-driven solutions more frequently and with more ambition as more enterprises continue their digital transformation efforts.
Gartner expects high-profile announcements of technology launches from nontech companies to proliferate over the next 12 months.
“The availability of business technologists provides new sources of innovation and the ability to get work done. Thus, technology and service providers will need to extend their sourcing of ideas and technology development into new communities, whether they are based on citizen development, their own customer communities or other sources,” said Mr. Kandaswamy.
Gartner clients can read more in Tech Providers 2025: Strategic Responses to Challenges From New (and Old) Entrants. This research is part of the Gartner Trend Insight report “Tech Providers 2025 Special Report,” a collection of research to help technology service providers (TSPs) understand the long-term changes in their markets and the actions they need to take today to prepare.
More detailed analysis about the trends impacting technology and service providers is available in the Gartner webinar Prepare Now for the 6 Forces That Will Shape Tech Providers by 2025.
Gartner Tech Growth & Innovation Conference
Gartner analysts will provide additional analysis on how technology service providers can accelerate growth, drive product innovation and leverage emerging technologies at the Gartner Tech Growth & Innovation Conference 2021, taking place virtually July 20-21 in the Americas. Follow news and updates from the conference on Twitter using #GartnerTGI.