Gartner Research Introducing theBusiness of HighTech PlanningTrends for 2025 Mark McDonald, Radu Miclaus, Eric Goodness,James Ingham, John Lovelock, Adam Woodyer 12 September 2024 Introducing the Business of High Tech PlanningTrends for 2025 12 September 2024 - ID G00820463 - 5 min readBy Analyst(s): Mark McDonald, Radu Miclaus, Eric Goodness, James Ingham, JohnLovelock, Adam WoodyerInitiatives:Business of High Tech 2025 will be a pivotal year in high tech. This research collectionidentifies four planning trends high tech leaders must account forin their growth strategies and product plans. These trends are notobvious, but understanding and planning for their impact will becrucial for success in 2025. Analysis After two years of modest revenue growth and sluggish buying cycles, 2025 is expected toimprove for product leaders, with reignited demand and sales. The economic environmentwill not prohibit providers reigniting revenue growth, with inflation and interest ratesforecast to be moderate and enterprise demand for high tech returning to prepandemiclevels while new technology solutions come to market. While 2025 will not be a make-or-break year, the economic environment and GenAI arecreating the right timing for technology and service providers (TSPs) to positionthemselves for sustained success. High tech leaders are getting ready. According toGartner’s 2024 Technology Marketing Benchmarks Survey, participating tech firms withmore than $10 billion in revenue are investing, on average, 8.2% of their organization’senterprisewide annual revenue into marketing. This represents a nearly 2% increase in thepercent of sales, marking the highest level of investment in recent history.1 Everything has a connection to GenAI even though not every provider is a GenAI provider.GenAI will have an influence in every provider’s plans. Since the public launch of OpenAI’sChatGPT on 30 November 2022, GenAI investments, interest and hype have skyrocketed.2025 will be the first full year for which enterprises will budget for GenAI. With trillions ofdollars of potential economic value, high tech firms are expected to invest $1 trilliondollars in AI over the next few years.2 Providers need strong growth in GenAI-related revenue to earn a return on thoseinvestments. This is one of the ways GenAI will influence the 2025 provider planningcontext. The other ways include: Changing economic and monetization strategies to redistribute revenue acrosssoftware, services and inference providers such as Anthropic and OpenAI.■ Evolving product architectures to incorporate GenAI inferences into current productsand services, which is the preferred approach for 63% of providers3and thepreferred solution among enterprise clients.■ Influencing investor expectations for revenue and market value based on theperformance of GenAI providers, for better or worse.■ While everything has a connection to GenAI, providers must not let this focus to replacetheir underlying business and product strategies or their growth plans. A trend is a force or change that leaders must respond to. A planning trend is ananticipated change that requires explicit consideration for future strategies and plans.Providers should incorporate these planning trends as part of their overall strategicplanning process. The four trends outlined in Figure 1 help set the context for 2025success. Figure 1. Summary 2025 TSP Planning Trends Research Highlights Some recommended content may not be available as part of your current Gartnersubscription. Each of the four planning trends has its own research note containing impacts andactions for 2025 plans. These notes, taken together with Gartner’s enterprise IT spendingforecasts and quarterly business updates, provide a starting point for incorporating theseimpacts and actions into your plans. The notes are: 2025 TSP Planning Trends: Build Demand Without Economic Headwinds or Tailwinds Economic conditions are one of the many factors influencing enterprise technologyspending. Providers are accustomed to planning when the economy is strong or inrecession, where the signals are clear. Gartner assumes there will be no strong economicheadwinds or tailwinds in 2025, requiring providers to build their own demand. Thisplaces greater emphasis on customer relationships, the nature of the product portfolio,and increased attention and investment in marketing and sales. 2025 TSP Planning Trends: Managing Investor Expectations for GenAI Investors are betting on the future of GenAI in 2025. They expect software and servicesfirms to accelerate revenue growth through GenAI-related revenue. This expectation,coupled with a predicted lower cost of capital, makes 2025 a year of rising expectations,increased M&A activity and greater volatility. 2025 TSP Planning Trends: Managing the GenAI Inference “Tax” Incorporating GenAI functionality into TSP products and services generates a transferpayment from software providers to LLM inference prov