3 high-level takeaways from the G2 report
1. Demand for rapid ROI
Companies increasingly focus on the speed at which they can see a return on their investments in software. The current business environment, characterized by its fast pace and constant change, requires quick decision-making and rapid adaptability.
Businesses now expect that investments in new software will start to pay off within a six-month timeframe, with buyers seeking ROI within 6 months of purchase, according to the G2 report.
Companies that can quickly demonstrate value to their stakeholders gain a competitive edge, driving the need for software vendors to align with these expectations and deliver solutions that provide immediate benefits.
2. Positive outlook for software purchases
Global companies exhibit a surprisingly optimistic stance toward software acquisition in the current fiscal year, despite prevailing economic uncertainties. According to Gartner, Global IT spending is forecasted to grow by 8% in 2024, reaching $5.1 trillion, with major increases expected in software and services sales.
Firms across industries acknowledge that strategic investments in software can lead to operational efficiencies, improved customer experiences, and innovative products and services. As a result, businesses are willing to allocate substantial resources to software purchases, viewing these expenditures as essential investments in their future growth and success.
3. AI’s is driving major transformation in the software industry
Artificial intelligence is rapidly becoming a key differentiator in the software market, reshaping how businesses perceive and extract value from their software investments. AI’s capacity to analyze vast datasets, automate complex processes, and provide insights drives its increasing adoption across various industries.
Companies recognize that AI-infused software can lead to significant improvements in efficiency, accuracy, and innovation, prompting a surge in demand for these solutions.
AI’s integration into software products introduces new considerations in the procurement process, particularly concerning legal and ethical implications. Legal teams are now more involved in software acquisition decisions, tasked with navigating the complexities of compliance, data security, and intellectual property rights associated with AI technologies.
This heightened legal scrutiny ensures that companies mitigate risks while capitalizing on the benefits AI offers, illustrating the profound impact AI is having on the business software landscape.
Insights from G2’s global survey
Steady investment in technology amid economic challenges
The G2 global survey, with responses from over 1,700 B2B software decision-makers, highlighted a strong commitment to technological investment despite economic headwinds. These decision-makers, representing a wide array of industries and geographic regions, acknowledge how technology is fostering business growth.
Their continued investments in technology reflects a broader industry recognition that, even in times of economic uncertainty, the right technological tools can drive efficiency, enhance customer experiences, and open new avenues for revenue generation.
Exclusion of InfoSec teams
An interesting finding from the survey is that a substantial majority (86%) of software buyers choose to bypass their Information Security (InfoSec) teams during the purchasing process. This decision is likely due to a desire to expedite procurement and implementation, addressing immediate business needs and competitive pressures.
While this approach can accelerate the adoption of new technologies, it also raises questions about the potential risks and security vulnerabilities that might go unaddressed when InfoSec professionals are not involved in evaluating and vetting software solutions.
Software spending outlook and buyer expectations
Looking ahead to 2024, the survey reveals a positive outlook for software spending, with many respondents indicating plans to increase their budgets. This optimism persists despite ongoing economic fluctuations, suggesting that businesses view software investment as a key driver of future growth and resilience.
Companies anticipate that strategic investments in technology will help them face current challenges and position them for success in a post-pandemic world. The expectation that new software solutions will enable them to optimize operations, engage customers more effectively, and innovate in response to evolving market demands.
Vendor strategies are a top priority
Vendors are core pillars of the software ecosystem, with the G2 survey highlighting the need for vendors to prioritize integration, education, and training in their offerings. As businesses seek to derive maximum value from their software investments, they prefer vendors who can provide seamless integration with existing systems.
Vendors offering comprehensive education and training programs can empower their clients to fully leverage the capabilities of their software solutions. These factors are increasingly becoming key differentiators in the decision-making process for software purchases, stressing the importance of a customer-centricity.
4 software buying trends for 2023-2024
1. Anticipated increase in spending
In the 2023-2024 period, approximately 49% of software buyers project an increase in their software and technology investments. Despite the potential economic headwinds, organizations are willing to allocate more resources to technology, viewing it as a key investment for staying competitive and adaptable in a rapidly evolving market. This expected uptick in spending further reinforced the confidence enterprises have in technology as a catalyst for business transformation and growth.
2. Confidence in AI technology
The survey highlights a robust confidence in AI technology and solutions among software buyers. This confidence is based on AI’s now-proven ability to process and analyze vast amounts of data, automate complex tasks, and provide actionable insights.
A majority of the respondents value AI functionality in their software purchases, with 81% deeming it important and 78% trusting the accuracy and reliability of AI solutions.
As businesses become increasingly data-driven, the demand for AI-enabled software solutions is surging, with companies seeking to leverage AI’s capabilities to gain a competitive edge and drive innovation.
3. Varying priorities among different business sizes
Small businesses often prioritize ease of use and implementation, recognizing that software solutions must be accessible and manageable without extensive IT resources. In contrast, medium-sized and enterprise-level organizations place a premium on scalability and integration capabilities, acknowledging that software must not only accommodate current needs but also adapt to future growth and work seamlessly with existing systems.
4. Growth in unsanctioned software purchases
This recent growth trend has been spotlighted alongside the growing prevalence of shadow IT—where departments or individuals procure software without formal approval, often driven by the urgency to achieve quick results.
While shadow IT can offer agility and rapid deployment, it raises concerns about compliance, security, and data governance. Legal teams are increasingly important in making sure that software acquisitions align with regulatory requirements and company policies, mitigating risks associated with unsanctioned purchases. Tension in modern business environments and the need for speed and autonomy in technology adoption must be balanced with the push to maintain control and oversight.
Demands for 6-month results window for software vendors
Vendors in the software industry face pressure to demonstrate tangible value within a six-month timeframe, a reflection of the fast-paced business environment and the growing emphasis on agile investment strategies.
Companies are increasingly reluctant to commit to long-term ROI horizons, driven by a need for flexibility and quick adaptability to market changes. This sets a high bar for vendors, compelling them to not only develop but also communicate the immediate benefits of their solutions.
Demonstrating quick ROI now a central factor in a buyer’s decision-making process, influencing how companies assess and choose their technology partners. Vendors who can meet this demand for rapid value realization are better positioned to succeed in today’s saturated market.
