The COVID Hangover is Pulling Us Down, but Opportunities Abound in the Tech World

The epic global COVID shutdown in ‘20 and the historic government, consumer, and business spending spree of ‘21 and ‘22 leave us with massive economic uncertainty as we head into ‘23. Recession, high inflation / interest rates, housing and office markets in steep decline, and an end to government stimulus are just a few of the challenges facing us in ‘23. China, which has a self-inflicted economic slowdown, still thinks it can control COVID (Fauci flashbacks) – maybe not given its recent easing of widely protested zero-COVID policies. This might be an omen of what’s to come between the Chinese people and Xi’s Communist party. Putin’s war and Europe’s energy crisis are ugly realities, but hopefully they can be brought to an end sooner rather than later. Layoffs across the tech sector are mounting and will continue into ‘23, but it’s not clear how much they will hurt consumer and business demand. I highlight these concerns and uncertainties because companies across the world have started to defer, cut back, or cancel technology purchases. The digital world and corporate software got a massive lift from COVID and all the stimulus, but now those same forces are working against us. Corporate buyers have a much higher bar for not only buying new technology, but also adding to or maintaining recently deployed technology. Accordingly, most technology companies will cut their ‘23 forecasts over the next three months, or else they risk disappointing investors come quarter end. This same dynamic will play out for all of ‘23.