Over the past year, we have navigated concerns of a potential enterprise-technology downturn, including significant workforce reductions, market setbacks and other challenges. Considering these events, it’s natural to feel a sense of pessimism (which is healthy, to a certain extent).

However, a closer look at the sentiment of enterprise tech buyers across industries shows that the situation is more nuanced. We discussed this six months ago, when we published the results from our Q1 2023 State of Enterprise Tech Spending survey, writing that reports of the death of enterprise tech spending have been greatly exaggerated.

As we enter the second half of 2023, we’re excited to provide an update on the state of enterprise tech spending, which (despite the ups and downs of the past year) is not dead yet.

In fact, there is considerable enthusiasm for enterprise technology, particularly when it comes to generative AI. Amid the buzz around generative AI, and the increasing accessibility of technologies like ChatGPT and Code Copilot, we are noticing a change in how enterprise tech buyers are viewing spending and (dare we say it) a growing sense of optimism within the industry.

Key findings from our Q3 2023 survey, which saw participation from 100 respondents representing $35B in annual technology spend across industries including financial services, technology, healthcare, manufacturing and more, include:

• The percentage of companies with declining technology budgets remained relatively steady between Q1 2023 (27%) and Q3 2023 (29%). While respondents remain cautious amid an uncertain economic outlook, we also saw ‘less conservative’ budget approaches increase from 3% to 6% since Q1, suggesting a leveling in the downturn of spending appetite.
• We are seeing fewer enterprise tech buyers remain on the sidelines of the AI trend. Fifty-nine percent of respondents expect to increase AI/ML spending in the next six months, a 24-pp increase from Q1 2023; 79% of enterprise technology buyers expect to deploy generative AI/LLMs in the next 12 months, compared to 32% only six months ago.
• Enterprises are beginning to move beyond the experimentation phase with generative AI to execute meaningful deployments, primarily for use cases related to customers, people management, sales and knowledge management. 93% of buyers expect to move beyond experimentation with generative AI and LLMs within two years.
• We are seeing continued headwinds for bottoms-up, go-to-market (GTM) strategies. Survey respondents indicated they will continue to tighten self-procurement from developers in the dev/test environment, but appear less likely to control spending in the production environment.
• Across enterprises, we continue to see positive trends in hiring, often a leading indicator for future projects and budgets. Among Q3 respondents, 37% plan to increase hiring compared to only 27% in Q1 2023.

For more insights, please see the full report below.