Gartner’s tech vendor segment represents roughly 25% of total contract value (CV). How has this segment performed over the last several quarters in terms of CV growth, retention, client spending behavior, and new business generation?

Gartner’s tech vendor segment, which accounts for just under 25% of total contract value (CV), has transitioned from a significant drag on growth in 2023 to a leading indicator of recovery in 2024 and 2025. Management characterizes the recent pressure as a cyclical "recalibration" following an unprecedented "bubble" in venture capital funding and tech spending, rather than a structural shift in the business model.

1. Performance Trajectory and CV Growth

• The 2023 Trough: The tech vendor segment was "essentially flat" for the full year of 2023, severely impacting Gartner’s overall CV growth. High-teens growth in 2022 plummeted to high-single digits and eventually reached a bottom in early 2024.
• The 2024 Recovery: By late 2023, management reported that tech vendor CV growth had "turned the corner". Throughout 2024, CV growth in this segment accelerated for three consecutive quarters, exiting the year with positive momentum.
• Current State (Early 2026): As of early 2026, the segment continues to recover. Software and services tech vendors are growing at high-single to low-double-digit rates, though this is partially offset by tariff-related headwinds in hardware and semiconductor subsegments.

2. Retention and Client Spending Behavior

• Retention Drag: Tech vendors have been the primary driver of lower wallet retention in the Global Technology Sales (GTS) segment. While GTS enterprise leader retention remained high, tech vendor retention was hit by "sizable layoffs" at large firms and "funding challenges" at small ones.
• Small Tech Churn: The "small end" of the market has seen the most significant churn. Many small tech vendors that signed multi-year contracts two or three years ago (during the 2021–2022 funding boom) either lost funding or went out of business when those contracts came up for renewal in 2024.
• Large Tech Recalibration: Larger tech firms have engaged in "recalibration," reducing seat counts upon renewal as they focus on cost optimization and job cuts. Management noted that decision-making cycles at these firms remain extended because personnel are focused on internal restructurings.

3. New Business Generation

• New Logo Strength: Despite retention headwinds, sales to new tech logos have remained robust. In Q4 2024, new business with tech vendors increased at double-digit rates.
• The AI Pivot: A massive shift in venture capital funding toward Artificial Intelligence has created a new class of high-growth tech vendor clients. These AI-focused startups are replacing the traditional software vendors that previously dominated the segment.

4. Structural vs. Cyclical Pressures

Gartner management maintains that there is nothing structural about the recent slowdown.

• Cyclical Nature: Management views the 2023–2024 period as a correction to an "extraordinary bubble" where VC funding increased by 3x–4x normal levels. They expect the segment to eventually return to its historical 12%–16% growth range.
• Dynamic Territory Planning: Gartner has responded by using "dynamic territory planning" to move sales resources away from tech vendors without funding and toward productive areas like AI-based startups.

5. Budgeting and Recovery Expectations

• Budget Tone: Management reported that tech clients' 2025 budgets were expected to be "modestly better" than 2024.
• Renewal Bubbles: Q1 is a seasonally heavy quarter for tech vendor renewals, often representing low-to-mid 30% of the segment's annual CV. Gartner successfully worked through a "bubble" of these legacy multi-year renewals in early 2024, clearing the way for cleaner growth comps.
• Medium-Term Outlook: Management expects tech vendor CV to continue accelerating through 2025, reaching more "normal-like" states as the industry finishes its post-pandemic digestion of over-hired staff and pulled-forward demand.