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Despite the ongoing economic uncertainty, the majority of CXOs – 54% – plan to increase their overall technology budget for next year, and more than 75% plan to increase their budget in the next five years.
Technology startups have been on edge lately, as the financial markets have been whipping, and many investors have become more critical of the companies they fund. But a recent study by Battery companies of 100 tech buyers across industries revealed that while companies are changing their technology buying behavior, their overall budget won’t shrink.
Of the few buyers who will cut technology budgets, the approach will focus on consolidating suppliers and streamlining usage, rather than reducing headcount or optimizing SaaS licenses.
Now that priorities have changed and clarified, technology buyers are reporting a renewed interest in security, data, development tools and artificial intelligence/machine learning.
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Where does the technical expenditure go
Long-term sales prospects are also positive for technology start-ups. The vast majority of respondents plan to increase budgets over the next five years for the following:
- Security (92%)
- Data (84%)
- Developer tools (69%)
- AI/ML (79%)
The State of Cloud Software Spending survey also examines trends in software adoption and procurement, finding that approval times for business contracts remain unchanged or are delayed. Interestingly, the bottom-up adoption of software tools plays a greater role in development/testing phases, with more and more engineers being allowed to select tools themselves. Overall, the software spending landscape appears to be highly resilient, despite ongoing economic uncertainty.
Methodology
The Battery Ventures Cloud Software Spending Survey examines the technology procurement schedule of 100 Chief Technology Officers, Chief Information Officers, Chief Information Security Officers and other technology buyers across industries from financial services to healthcare to manufacturing, amounting to approximately $29 billion in annual technology expenditure. Responses were collected online and in follow-up interviews from August 5 to August 10, 2022.
Read the full report from Battery Ventures.
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