Before the year 2000, enterprise technology providers in the PC and mobile markets could rely on their largest corporate customers to drive sales even when pricing and competitive pressures rose.

But times have changed.

Corporate procurement officers and CIOs are now taking a much closer look at costs and how IT supports their core businesses. Executives today are much more likely to outsource their IT or replace it with a less expensive solution, leaving established providers of enterprise technology for the high-tech industry without that business.

In the global PC market, for example, many corporate customers are looking at emerging entrants, who can often offer a lower price than more established U.S.-based PC manufacturers. There is also the “bring your own device” (BYOD) movement, in which more employees are bringing their own smartphones and tablet PCs to use for work purposes; and the growing use of competing smartphone and PC operating systems.

According to our research, these changes have culminated in three new economic realities for the high-tech industry. Refocusing operations to better align with these new realities can be key to a successful B2B transition. 

Three New Economic Realities: 

  1. Faster Technology Cycles: For the past two decades, high-tech product lifecycles have been shrinking. Refresh windows have collapsed to last only two years. Corporate customers are looking to satisfy a growing and more sophisticated user group while reaping support benefits associated with having the most updated technology. Providers of enterprise technology for the high-tech industry see this trend as an opportunity to generate more profits more quickly. But achieving this requires a nimble global supply chain.
  2. Competitive Emerging Markets: Emerging market players in South Korea, India and China are taking significant market share from traditional enterprise technology providers in Europe, North America and Japan.  These new players were quick in identifying the growth opportunity of smartphones and could offer more competitive prices.
  3. The Decline and Fragmentation of Corporate IT Spending: Global IT spending, which has taken a massive hit in the wake of the recent recession, is not expected to recover soon. Slashing budgets, refocusing on core processes and investing that money towards non–IT initiatives are the most pressing concerns for corporate IT buyers. CIOs still want to make IT investments, but they need to see an immediate and clear investment return.