Beyond Silicon Valley, Tech Spending is Resilient

While each day seems to bring more news of massive layoffs from the technology giants (Amazon, Alphabet, Meta, Microsoft, et al.), the news is not all discouraging from (and for) technology providers. The reason is simple: as one Fortune 500 CTO recently told The New York Times, "We have to continue to invest. You can't do what we're trying to do without technology."

Polling of corporate technology providers conducted by the research firm IDC backs that up. In a recent poll, 82% said they expected a recession this year, yet 62% said that tech spending at their companies would increase or, at worst, stay the same in 2023.

A disproportionate amount of the spending will go to new technologies that are increasingly mainstream -- cloud computing, data analytics, AI and cybersecurity -- and to companies' digital transformation efforts. On the latter front, insurer and health services provider Elevance (formerly Anthem) provides a case (study) in point.  Five years ago, 30% of its communications with customers and partners were handled through its digital channels (website, mobile apps, and chatbots); now, that figure is 80%.

Perhaps cheers are in order for the tech sector in 2023 after all.