By Jim Lundy
Year In Review: 2023 Part I: First Half Recession in Technology
The word that people are afraid to say, recession, is basically what technology markets faced in 2023.
Even with that, it was not enough to slow down the rollout of Generative AI. With it, the agreement that we are in the age of AI will not be leaving anytime soon.
Part one of two blogs on Year in Review: 2023 discusses the Tech Recession we had in the first half.
First Half of 2023: A Tech Recession— People Will Not Call It a Recession
It has become abundantly clear that the first half of 2023 will be seen as one in which many businesses, in particular SaaS Software providers, faced some of the toughest selling environments in their history. As a result, there were layoffs across the board.
The year started slow, but then the Silicon Valley Bank failure did not help. Even though the bank was sold quickly, it still had an impact. Small and large enterprises slowed their spending, so deals got delayed or, in many cases, canceled.
The Second Half of 2023: We Saw a Recovery
With GDP growing in the U.S. at 5.2% in the third quarter, economists will say, “We didn’t hit bottom, but we recovered.”
Many software firms did have a better third quarter, but as far as success, most publicly traded technology companies did not fare as well as Amazon, Facebook, Google, Nvidia, and Microsoft. This is because they were the ones who jumped on AI.
The jump in interest in AI has caused a surge in investment. It also created a lot more interest from buyers. That helped to generate a recovery in the second half of 2023.
The Rise of Generative AI: OpenAI GPT 3.5 Started a Revolution
It all started in December 2022, which will be remembered as the launch of Open AI GPT 3.5.
It also included the masterful launch of a demo that showed what Large Language Models (LLMs) can do to answer basic questions. The demos that were shown were well-planned.
However, the planned impact was successful and nearly everyone in the Tech Community realized that they had to respond and start to add Generative AI capabilities. Then came Meta, Google, Microsoft, and then Amazon with their launches.
Read more about the Rise of Generative AI in Part II of our 2023 Year-End Review.
Bottom Line
2023 will be remembered as one of the tougher years in technology. No one has said recession because consumer spending helped to offset a slowdown in tech spending.
For 2024, there is optimism and a realization that enterprises will have to invest in AI just to stay competitive. Read Part II for more on what happened in AI in 2023.
Get Ready for 2024 with Aragon’s 2024 Q1 Research Agenda!
Wednesday, January 17th, 2024 at 10 AM PT | 1 PM ET
Aragon Research’s 2024 Q1 Agenda
Aragon Research provides the strategic insights and advice you need to help your business navigate disruption and outperform your goals. Our research is designed to help you understand the technologies that will impact your business–using a number of trusted research methodologies that have been proven to help organizations like yours get to business outcomes faster.
On Wednesday, January 17th, 2024, join Aragon Research CEO and Lead Analyst, Jim Lundy for a complimentary webinar as they walk you through Aragon’s Q1 2024 research agenda.
This webinar will cover:
- Aragon’s coverage areas, analysts, and services
- Research offered by Aragon, including Visual Research
- The research agenda for Q1 2024
- Sneak peek at what’s coming in Q2 2024