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Bain’s third annual global Technology Report, based on secondary market research, analysis of financial information and a range of interviews of industry participants, shows that although many companies are facing uncertainties due to current geopolitical and economic trends, these disruptions can often lead to advances.
According to Bain, 77% of companies are expected to either increase their technology budgets in 2023 or keep it the same; a dip from just last year when 90% of companies said they expected to either increase or keep their tech budgets the same come 2022.
And while tech companies are easily disrupted, Bain is reminding CIOs, CTOs and other technology executives that, despite rocky trends such as inflation and a looming recession, “technology will continue to play a central role in the global economy, helping to shape how companies in every sector create sustained value for customers and other stakeholders.”
According to Bain, more than 75% of the largest venture capital investments in recent years went to IT infrastructure and industry-focused enterprise software companies, illustrating the potential for innovation.
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AI investments growing as the tech increases market share
In addition to the findings above, Bain found that company investments in artificial intelligence (AI) are rapidly growing, and 86% of tech providers say AI is becoming critical for gaining market share and building customer loyalty.
Yet, according to Bain, only about 20% of companies have the technology infrastructure in place to make the most of AI’s potential. Today, AI is engaging customers, shaping product development and has the potential to transform industries alongside other Web3 technologies. Although these technologies can bring benefits, Bain also warns that they can bring implications for organizations who ignore Web3 capabilities.
Other technology trends covered by Bain
The comprehensive, almost 100-page report covered many other tech trends over the past year. Competing and winning in the multicloud world, scaling the industrial internet-of-things, increasing sales productivity in an economic downturn, consumption-based pricing, and the chip shortage are all covered. Some additional facts from the Bain report include:
- In the race between cloud hyperscalers (e.g., AWS, Google Cloud) and multicloud infrastructure software vendors (e.g., Snowflake, Twilio), customers are already voting with their dollars, spending around 60% of their AI/ML budgets on hyperscalers’ tools, compared with 25% on multicloud ISV solutions.
- For the industrial internet-of-things, the number of organizations implementing proofs of concept grew nearly 20% from 2018 to 2022 and is expected to grow another 20% by 2026.
- The future is bright for software-as-a-service (SaaS) companies that employ consumption-based pricing: 80% of customers report better alignment with the value they receive from consumption pricing. And nearly half of software companies using it say it has helped them acquire more customers, while two-thirds say it’s helping them increase revenue with existing customers.
Bain’s Technology Report 2022 is based on secondary market research, analysis of financial information available or provided to Bain and Company and a range of interviews with industry participants.
Read the full report from Bain.