How COVID-19 has changed B2B tech buying
Shauna Moran
Back in April, Microsoft said it had witnessed "two years' worth of digital transformation in two months."
The crisis has certainly created new opportunities for B2B companies in the tech space, with industries that might never have considered certain tools now in the market for them.
It's therefore important to highlight the most promising (and newly fertile) categories for marketing tech products – which we're able to do by drawing on the intentions of tech decision-makers¹.
Our latest wave of GWI Work data, covering ten markets, speaks to the challenges they currently face, and allows us to map out their post-COVID tech resolutions.
Certain sectors are more affected by this wave of digital disruption.
Industries like tech and IT are the leading buyers in this market.
Given the nature of their industry, they value technology and often want the latest products before their competitors. Take IT for example – 73% of tech decision-makers say their company is an early adopter or innovator.
Yet, in the charity sector – an industry pulled into the tech market by necessity – only 10% say the same.
The pandemic has pushed many charities to the brink of collapse. For Oxfam, it's prompted the closure of around 600 UK outlets; and custom research we carried out in the U.S. and UK back in April sheds light on why.
Among those who had transitioned to working from home, employees in the charity sector were 2.5x more likely to say their company was not at all equipped to operate with a remote staff. Logistical issues were at the heart of this, and over a fifth cited struggles to maintain communication with their clients or customers.
Aiming to help alleviate these difficulties, Microsoft has launched a new tool called Teams Voice. The tool allows non-profit organizations to make and receive external calls through Microsoft Teams, saving them time and money.
Digital disruption impacts virtually everyone – both our data and these solutions make it clear that cloud-based tools are now essential for sectors like charity.
More importantly, our over time comparison shows where this wave of disruption has taken most effect. Thanks to the pandemic, the need for tech is everywhere – even the most unexpected places.
In terms of prioritizing tech initiatives, the military sector has witnessed the most growth. And an increase as high as 23 percentage-points in the space of a year is too dramatic to be ignored.
The UK military is said to be a late adopter when it comes to tech. But recent security concerns have prompted the creation of its first dedicated cyber regiment.
Spreading relevant knowledge has also been prioritized, and new fellowships have been implemented to equip personnel with an understanding of the latest technologies.
These developments mean marketers have viable new sectors to target.
By understanding how and why certain industries have come to depend on tech, B2B companies can follow in the direction of Microsoft, and create products that address newfound difficulties.
Emerging tech is piquing the interest of laggards.
Interest in emerging tech is engaging the attention of firms slow to adopt new technology, often called laggards.
Among those who say their company doesn't use it, just below a fifth of decision-makers are eyeing blockchain, automation and edge computing technologies.
Over 4 in 10 consumers say they'd exchange their personal data for free services, which means many sectors are generating it in unprecedented amounts.
This helps explain why retail, leisure and hospitality is the top industry group when it comes to interest in edge computing – designed to increase data volumes and reduce latency. Especially with shopping and leisure habits changing so dramatically, it's vital these companies are able to collect and analyze data more easily.
Despite an uncertain economic climate, many businesses are more focused on solving their operational issues. Even industries that have struggled most during the pandemic want cutting-edge technology.
The travel sector has taken some serious financial hits during the pandemic. But when asked to name their top growth initiatives, the industry's tech decision-makers are far more likely to cite improving productivity and efficiency (39% do), than finding cost-savings (26%). Likewise, only 1 in 5 currently list short-term cash flow as one of their company's biggest challenges.
The same story is being played out among other late adopters.
We recently outlined the growing demand for emerging tech in the healthcare industry, where it's become increasingly more difficult to manage medical information.
The pressure is also on governments to manage this kind of data, which explains why the sector now demonstrates the most interest in using blockchain technology.
53% of tech decision-makers in government, and 46% in healthcare, describe their organization as a laggard or late adopter.
The Singaporean government, for example, has developed a blockchain-powered "digital health passport" to support the management of medical data. The idea of extending this healthcare application to the travel industry has also been put forward.
This is an apt illustration of how demand for new technologies is currently spreading between sectors often categorized as laggards; as organizations and startups from different industries work together to co-create innovative solutions to their COVID-related problems.
The order of purchase drivers has changed.
Value, ease-of-use and efficiency are all very important purchase drivers – especially in the final stages of a buying process.
But the new ranked order of priorities among ultimate decision-makers looks a little different to last year.
Security is currently the leading purchase influencer, replacing value.
Decision-makers have grown more aware of cybersecurity attacks, in light of the recent spike in phishing attempts targeting remote workers.
As more businesses adopt remote or hybrid working, trust models will need to be re-evaluated. In time, security will secure a more central position in tech decision-making.
Price has lost its place within the top five purchase drivers, in lieu of technical support being available. Many businesses have moved to the cloud since the outbreak, and new software requires instruction for both workers and businesses; particularly as many look beyond merely adopting tools to survive, to using them as a means of competing in a tech-enlightened landscape.
The pressures on SMBs help account for new priorities among decision-makers in these organizations.
Singled out by hackers as an easy target, a single data breach could cost a small business its livelihood. By the same token, SMBs tend to be late adopters or laggards. Yet, falling behind competitors on the digital front results in lost business, especially with the need for online offerings at an all-time high.
Hence, keeping up with industry innovations is ranked as one of the biggest company challenges by over a quarter of tech decision-makers in SMBs, and around a fifth cite enhancing security as a top growth initiative.
Price is still key. But compared to last year, businesses appear to be more motivated by the potential cost of purchasing too late, than the actual cost of a purchase.
Innovation beats reactivity
Overall, the pace of cloud adoption has accelerated rapidly, and the technology playing field has levelled a bit.
If the pandemic has taught tech businesses anything, it's that it pays to be an innovator. Cash flow is a short-term concern; but technology investments promise to drive business success in the long-run.
Especially against a volatile and uncertain backdrop, companies have instead adopted a more forward-thinking perspective.
Beyond what's necessary to business survival, interest in cutting-edge technology has picked up among laggards. Many sectors now seek innovative answers to new logistical challenges – and it's up to B2B companies to deliver.
¹Tech decision-makers are defined as someone who is the ultimate decision maker for software or hardware purchases in their company; sole decision maker for their department; has equal share in decision making with others in their company; mostly influences decision-making but must get approval before purchasing; or has some influence in decision-making but someone else makes the purchase.
Shauna's an Insights Analyst at GWI. A chocolate addict, she's surprisingly all about moderation when it comes to writing – a stickler for only the most relevant trends.
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