Is the tech industry set to battle non-tech players for market share?

Is the tech industry set to battle non-tech players for market share?

By 2024, 80 per cent of technology products and services are expected to be built by those who are not technology professionals.

Credit: Photo by Hasan Almasi on Unsplash

By 2024, more than a third of technology providers are expected to find themselves competing with non-technology providers, according to the latest analysis by Gartner.  

The analyst firm claims that technology providers are already finding themselves increasingly entering markets related to, or in competition with, non-technology providers, including innovative firms in the financial services and retail sectors.  

Indeed, Gartner expects high-profile announcements of technology launches from non-tech 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,” said Rajesh Kandaswamy, distinguished research vice president at Gartner. “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.” 

Gartner’s predictions notwithstanding, there is an intrinsic difficulty in drawing a line of delineation between technology providers and non-technology providers – a point on which Gartner remains somewhat vague – as organisations of all kinds go through the process of digitalisation, with tech taking its place at the core of many businesses. 

There have, over the past several years, been instances of consumer product and services players, some of them claiming a background not particularly heavy on tech, moving up into the enterprise space, developing new products and services to match.  

If this is part of the trend to which Gartner is referring, the channel is likely to remain fairly safe, even if traditionally non-tech players are coming in to step on the toes of established technology vendors.  

Many tech providers shifting from consumer to enterprise markets quickly discover just how vital the channel ecosystem is when it comes to picking up customers en masse. 

One example is Facebook which, close to four-and-a-half years after the general launch of Facebook at Work, the social media platform operator’s Workplace offering, launched its own partner program to drive activity in the enterprise space

This was far from a novel move. Facebook was basically following in the footsteps of other consumer-turned-enterprise technology players, such as Google, turning to the channel in an effort to build out its business prowess – and no doubt tap into the services revenue opportunities presented by corporate customers. 

From Gartner's perspective, 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,” the analyst firm noted. 

Gartner reckons that one of the driving factors behind non-tech players’ entry into the world of IT is the expectation that, by 2024, 80 per cent of technology products and services will be built by those who are not technology professionals. 

The trends underpinning this predicted development include the rise of 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 per cent of the total formal IT budget, according to the analyst firm. 

“Digital business is treated as a team sport by CEOs and no longer the sole domain of the IT department,” Kandaswamy said. “Growth in digital data, low-code development tools and artificial intelligence (AI)-assisted development are among the many factors that enable the democratisation of technology development beyond IT professionals.” 

One other major factor has helped to put some additional fire under the development of technology solutions by traditionally non-tech players: COVID-19. 

According to Gartner, COVID-19 has 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 non-technology professions within enterprises – or ‘business technologists,’ as Gartner refers to them – citizen developers, data scientists and AI systems that generate software.   

Broadly, Gartner suggests that the demand for products and services developed outside of IT departments driven by the encroachment of existing technology into all areas of business and among consumers has been compounded by the COVID-19 crisis. 

The crisis, the analyst firm said, has only expanded the amount and type of use cases technology is needed to fulfil.  

Highlighting this point, Gartner predicts that, in 2023, US$30 billion in revenue will be generated by products and services that did not exist pre-pandemic. 

Moreover, the rapid expansion of cloud services, digital business initiatives and remote services have opened the door for new possibilities in integrations and optimisation, the firm noted. 

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