Business Software Buyers Want More AI Features, Less ROI Time
G2, a research and software marketplace organisation, issued its annual software buyer behaviour study, “The Value-Driven Buyer,” in June, and discovered that, despite doom and gloom forecasts about tech markets and budgets, businesses perceive a bright outlook among worldwide corporations purchasing software this year.
As purchasers turn to AI to extract more value from their software purchases, artificial intelligence is altering the whole software ecosystem. It will encourage legal teams to get more active in software acquisitions.
Based on responses from over 1,700 B2B software decision-makers, G2’s worldwide survey presents the most recent insights and trends. One of the main conclusions is that, despite today’s economic troubles, firms are continuing to invest in technology to expand.”
Notably, organisations under pressure to produce results in six months are pushing vendors to show them, not just tell them, how their services can create value. A major conclusion is that 86% of buyers exclude information security teams from the purchase process, citing the need to produce results rapidly.
Despite the economic backdrop, the current software purchasing report reveals little change in purchasers’ spending expectations from last year. In 2024, the forecast for software expenditure is much brighter.
Top 3 Software Buying Trends 2023-2024
These tendencies occur among software purchasers in present situations typified by economic instability, vendor pressure, altering customer expectations, and an increasing emphasis on AI:
Buyers predict increased software and technology spending despite an uncertain economic environment.
Only 9% said it would decrease. Seventy-six percent of those who said spending would increase noted that economic uncertainty was a factor in the change, compared to 80% who said spending would decrease.
The outlook for software spending in 2024 is even brighter.
More over half (55%) expect expenditure to rise next year, while just 6% expect it to fall. Responses for next year’s performance were nearly identical to those for this year. Despite economic uncertainties, 75% of respondents increased their expenditure. This compares to 78% who foresee a decrease in expenditure.
Software buyers trust AI tech and prioritize its functionality in their software purchases.
A huge majority of respondents (81%) indicated it is critical or very important that the software they buy in the future contains AI features. Only 4% believe AI functioning is unimportant. A nearly similar 78% believe in the correctness and dependability of AI-powered solutions. Only around 2% do not trust it at all.
AI Becoming Foundational
According to researchers, the buzz around generative AI has sparked a genuine frenzy among firms seeking a competitive advantage. Buyers trust AI-powered solutions, providing any AI-powered product a competitive advantage. Voce was taken aback by the reaction to AI as a product selling feature. He mentioned that AI capabilities are driving increased software investment.
“Despite economic uncertainty,” he told the E-Commerce Times, “companies are willing to spend on AI.” “AI functionality is becoming critical for businesses, despite widespread scepticism about AI use.”
According to the research, software buyers expect to raise their AI expenditure by 60% next year, with 72% of software purchasers making AI acquisitions worth more than $100,000.
“This highlights the explosive growth we can expect AI software products to see in 2024 — beyond what we’ve already seen this year.” It also implies that any software seller who incorporates AI capability into their solutions will have a competitive edge in the future.”
Unsanctioned Software Purchases Will Grow
As AI becomes the new software selling point, legal teams will get more involved in commercial software acquisitions, according to Voce. When it comes to reviewing software, 84% of respondents claimed their IT department is in charge of security or privacy evaluations.
“Forty percent say their legal department is involved, and we expect this to increase in the coming months and years as businesses become more concerned about how their data is used and accountability for the output of generative AI solutions,” he said.
Unofficial IT practises will also occur. Buyers of software adhere to business processes. However, the pressure to achieve results leads to shadow IT, according to Voce. Eight out of ten respondents (80%) claimed they have a formal software purchase procedure in place. Despite the fact that they agreed that corporate forces continue to influence behaviour changes.
Software Buying Priorities by Business Size
Software purchasers prioritise value, scalability, and simplicity of use. However, priorities change depending on the size of the organisation. According to the report, small firms prioritise simplicity of use and ease of implementation. Enterprise and medium-sized businesses prioritise solutions that will scale with their expansion and rate scalability as the third most essential consideration when choosing new software.
The ability to collaborate without adding complication is critical. According to Voce, the expense of software is being prioritised over the ease of integration. However, because the poll did not include this topic, the research did not go into purchase preferences for proprietary software over open-source software.
Vendors Must Hit a 6-Month Results Window
According to Voce, business value is at the centre of software purchase decisions. The poll of global software purchasers indicated that buyers are still opening their budgets for software investments that they believe would help their firms produce value.
Vendors must demonstrate immediate value. According to respondent input, the need to realise a ROI within six months is the most essential aspect throughout the buying process for respondents who expect software expenditure to grow in 2024.
