IT Budgets & Strategy
Amid continued economic uncertainty and an ever evolving selection of vendors and products to choose between, how did decision-makers navigate the buyer’s journey for IT in Q3?
Data collection: Q3, 2021
Respondents: 381 technology decision-makers
Leaders spent mostly 1-3 hours (62%, up from 55% in Q2) evaluating vendors each week during Q3.
For discovering new vendors, IT leaders continue to turn to peer recommendations (73%, down from 75% in Q2), technology news sites/newsletters/podcasts (66%, up from 65% in Q2), and online IT communities (55%, down from 56% in Q2).
“It’s important to do research and check with those who have implemented and used the vendor and solution as well as negotiate pricing.”
- C-suite, large software company
When selecting a vendor, the top considerations continue to be features (68%, up from 67% in Q2), pricing and packaging (54%, down from 61% in Q2), and vendor reputation (51%, unchanged from Q2).
As for decision-makers’ preferred SaaS pricing model, annual subscription (42%, unchanged from Q2) continues to lead the way. However, usage-based (23%, up from 20% in Q2) is now the clear second choice, having tied for second place in Q2 with monthly subscription-based (19%, down from 20% in Q2).
“RFP process is critical. Vendor demos are helpful in highlighting features, but to truly compare results of vendors, a proof of concept for a specific test use case must be done.”
- Director, large professional services company
“It’s so hard to choose between vendors and when we make decisions it’s almost always backed by some strong research and pre-development. Next, we compare pricing and security policies, and then the vendor’s reputation.”
- C-suite, small software company
For their last purchase, leaders continued to prefer vendors they are already working with (66%, up from 64% in Q2), rather than purchasing from new vendors (34%, down from 36% in Q2).
The majority of decision-makers are primarily concerned that new vendors care more about acquiring them as customers than keeping them happy (63%, down from 64% in Q2) and that deliverables won’t meet their expectations (60%, down from 62% in Q2). Concerns over not having their specific needs met (29%) are reduced from Q2 (43%).
“Vendor response time to completing our security/IT requirements questionnaire often reflects how responsive they will be if we eventually become a customer.”
- Director, large healthcare company
More decision-makers are willing to consider startups for new tech solutions in Q3 (83%, up from 76% in Q2).
Decision-makers are still likely to engage both startups and established vendors equally for new technology solutions (43%, unchanged from Q2).
However, when leaders lean one way, it’s still much more towards established vendors (49%, down from 53% in Q2) than towards startups (7%, up from 4% in Q2).
“Financial viability is crucial, especially for startups.”
- Director, large finance company
Most decision-makers make IT purchases of more than $100K quarterly (35%, up from 29% in Q2).
Finance continues to be the most represented stakeholder (83%, up from 80% in Q2) for IT purchases over $100K.
“[Choosing between vendors] is a balance of many factors. It also depends on how big the spend is. The bigger the cost and investment the more oversight and due diligence will be required.”
- Director, small-medium business
The CIO remains primarily responsible for making the final purchasing decision (44%, down from 47% in Q2), though Directors seem to be gaining ground on the responsibility (29%, up from 23% in Q2).
Most decision-makers continue to report that security teams are vetting vendors before a purchase is made (70%, down from 71% in Q2).
“In my experience, going with a team approach on selection makes a huge difference.”
- VP, large finance company