2024 Software Spending to Increase With Focus on AI Functionality and Extra Security, Gartner Digital Markets Reports
Software companies must adapt to changing buyer needs to grow in a competitive market – here are four top priorities they need to address to attract and retain customers.
New research published by Gartner Digital Markets, the world’s largest platform for finding software and services, reveals a significant shift in software buying behaviors. In 2024, buyers are increasingly focused on cost efficiency, artificial intelligence (AI) functionality, and enhanced security. The report reveals that 61% of buyers are seeking upgrades for more functionality in their recently purchased software.
“SaaS companies can align their offerings with current market demands, like advanced AI and security features, while also understanding the importance of customer reviews in building trust and credibility with prospective buyers.”
The need to upgrade reflects the constant pursuit of optimizing tech tools for better performance and ROI. Central to navigating these decisions, 98% of buyers rely on user reviews in their decision-making process and place higher trust in more recent reviews.
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To help SaaS companies attract and retain customers, Gartner Digital Markets has identified four top priorities for software buyers in 2024:
- Software buyers are actively evaluating their budgets and expect pricing that is justifiable in relation to features included. Software buyers are sensitive to price, and 31% have replaced their software because it costs too much. Cost is the number one factor for buyers searching for new software. In fact, over half (53%) have disqualified a vendor because prices weren’t in line with their expectations.
- Software buyers demand more functionality, especially AI features to enhance efficiencies/productivity. Nearly all (92%) businesses are considering investing in AI-powered software in 2024. According to Gartner, by 2027, spending on AI software will grow to $297.9 billion, with a compound annual growth rate of 19.1%.
- Software buyers are concerned about security amidst consistent cyber threats. Nearly half (47%) of software buyers say their concerns about security and cyberattacks triggered a purchase in the last 12 months. Security certification, reputation, or data privacy practices are the top reasons why 46% of buyers selected a vendor for their most recent purchase. Furthermore, IT security software is the top purchase category.
- Software buyers rely heavily on reviews to make purchasing decisions. Recent reviews are more likely to reflect a software product’s latest features and support capabilities, allowing for a more accurate view to inform decision-making. As such, 92% of buyers indicate they are more likely to trust software reviews written within the past year, with a preference for reviews that are verified by a third party.
“In times of rapid technological advancement and economic uncertainty, the ability for software providers to adapt and stay competitive is essential—and the opportunities are certainly there for growth,” advises Caroline Hogan, senior director of vendor marketing at Gartner Digital Markets. “SaaS companies can align their offerings with current market demands, like advanced AI and security features, while also understanding the importance of customer reviews in building trust and credibility with prospective buyers.”
Software investments are expected to increase this year, underlining the importance for providers to understand buyer trends and use them to their advantage. To gain deeper insights into these trends and learn actionable strategies for exceeding sales goals, check out Gartner Digital Markets’ 2024 Global Software Buying Trends Report.
