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

i think most People would agree that 2023 was a challenging time to be a startup. There were many layoffs as companies struggled to transition from growth to profitability. Meanwhile, sales cycles were long and many startups were struggling to grow at a good pace.

As we start to see the economic signs improve a bit with inflation falling, the cost of money falling and most currency headwinds easing, you would think 2024 could turn out to be a better year.

not necessarily.

We are in a new era where money won’t flow so easily, and according to the experts we spoke to, we won’t see another boom in the near future. This means that startups that don’t have enough capital now may continue to struggle in 2024, and a flip of the calendar won’t change that.

What does this mean for startups entering 2024? This means they have to prove their worth more than ever. This means they need enough cash to run long sales cycles. This means they will have to struggle for their enterprise budgets, and potentially, 2024 could look a lot like 2023.

budget approach

A good starting point for a budget discussion is what the proposed budget looks like. Analyst companies such as IDC and Gartner forecast IT spending every year, although they are usually adjusted throughout the year as the reality becomes clearer.

The IDC is predicting 6.8% growth, up from 5% last year. This number looks at hardware, software and services but does not include any telecommunications expenses. Meanwhile, Gartner is predicting a slightly higher 8.2%.

The overall upward trend is good news for startups looking for venture buyers to scale up their businesses. But John-David Lovelock, a Gartner analyst who looks at IT budgets, says that while 2023 was the year to be more efficient, that doesn’t mean it will end with the new year.