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IT budgets should increase in 2024, but it still could be tough going for startups

December 18, 2023
in Technology
IT budgets should increase in 2024, but it still could be tough going for startups
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I think most people would agree that 2023 was a challenging time to be a startup. There were lots of layoffs as companies struggled to make the transition from growth to profitability. Meanwhile, sales cycles were longer and many startups struggled to grow at a decent pace.

As we start to see the economic signals improve a bit with inflation letting up, the cost of money dropping, and most currency headwinds decreasing, you would think that 2024 might be shaping up to be a better year.

Not necessarily.

We are in a new era, one where money won’t flow so freely, and according to the experts we spoke to, we won’t see a bounce-back again anytime soon. This means that startups that aren’t well capitalized right now could continue to struggle in 2024, and the flipping of the calendar isn’t going to change that.

What does it all mean for startups entering 2024? It means they have to prove their worth more than ever. It means they need enough cash to ride out long sales cycles. It means they have to fight for their piece of enterprise budgets, and that, possibly, 2024 could look a lot like 2023.

The budget outlook

A good starting point for budget discussions is what the proposed budget looks like. Analyst firms like IDC and Gartner predict IT spending each year, although they generally adjust throughout the year as the reality becomes clear.

IDC is predicting 6.8% growth, which is up from 5% last year. This number looks at hardware, software and services but excludes any telecom spending. Meanwhile, Gartner is predicting a bit higher at 8.2%.

The overall upward trend has to be good news for startups, which are looking to enterprise buyers to lift their businesses. But John-David Lovelock, a Gartner analyst who looks at IT budgets, says while 2023 was a year of getting more efficient, that doesn’t mean that just ends with the new year.

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Copyright for syndicated content belongs to the linked Source : TechCrunch – https://techcrunch.com/2023/12/17/it-budgets-2024-predictions/

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