Is Selling B2B Software Tougher Today?
Yes, selling software is harder than it was a few years ago. The software market is shrinking, and generative AI is taking a bigger slice of the budget pie.
So, what’s changed, and how can you stay ahead?
Conversations with 30 Fortune 500 CIOs and benchmarking data reveal that despite a shrinking pool of opportunities, over 85% of winnable IT spend remains outside industries most affected by generative AI.
Contrary to popular belief, not all new software spend is being swallowed by gen AI. In fact, less than 20% of net-new software dollars are going towards gen AI products right now. Most of the remaining opportunities are with companies preparing for the impact of gen AI in the future. That’s where your startup can find its next big win.
What Makes Selling So Challenging In Today’s Market?
Selling in today’s market is tougher due to shrinking software budgets, economic uncertainty, and increased competition from generative AI. Startups now face a reduced pool of opportunities and need to focus on providing clear ROI to win new business.
- The Market Has Contracted: Startups are competing for fewer net-new software dollars, with cybersecurity and databases being exceptions.
- Macroeconomic Uncertainty: CIOs are cautious, holding back on new projects due to inflation, interest rate volatility, and elections.
- Post-COVID SaaS Consolidation: Companies are focused on squeezing value out of their existing software and are more selective about adding new vendors.
- Generative AI Disruption: While gen AI is absorbing a lot of attention, most of the spend is still outside of it—85% of IT dollars are up for grabs in sectors preparing for future AI impact.
What Drives CIO Purchasing Choices
a16z engaged directly with several leading CIOs to gain insights into their specific requirements from vendors.
We have a very structured approach, and that’s driven from the center. . . . If the investment is above a certain threshold—which could be a million or two—they have to come to us. . . . We also tightened up the guardrails, and therefore the threshold investment limits have probably come down a bit.
CIO of multinational chemical company
[We want to see] business proximity and people who understand our needs. I really like RFPs or RFIs if, in the first round, the potential partner comes back with more questions to us than we asked him. This is for me a strong indication that he takes that seriously and wants to understand what we need. He doesn’t just say, ‘I can do it for you,’ and in two years, see how we fail. He really wants to understand and identify himself with our business.
CIO of global airline
If you can demonstrate that there is going to be a reduction in spend—if you bring a new tool in and you say, ‘okay, I’ll exit this vendor. This vendor costs me $2M a year, and I need to make this investment. It’ll cost $1M this year, but next year, it’ll be a $1M saving.’ Those are the ones that are a lot easier to get through.
Division CIO at European bank
We still expect a business case. Of course, we understand that we may not reach the full potential of the business case. So, that’s where we apply less strictness for emerging technology. In the normal technology world, we would expect the business case to be met. Here, we’re okay if the business case is not met, but we do want to see, directionally, how much we could get back because it needs to make sense from an ROI perspective.
Division CIO at multinational conglomerate
I want to see use cases. I want to see the value. I want to see utility. It’s quite important to show the roadmap, but the roadmap needs to be realistic and not fluff. This is what is frustrating the market at this point in time. I don’t think in the last five years I have seen a bigger gap in the promise-to-performance ratio than I’m seeing right now.
CIO of multinational chemical company
If I’m evaluating something brand new, we want to understand the provider’s capabilities in gen AI or what’s on their roadmap if it’s not there today. If you’re doing a comparison across two or three different similar providers, it’s an evaluation criterion moreso in the last 12, 18 months than it would have been prior to that.
CIO of IT services company
We are spending time and money to create new capabilities for the business. From that point of view, the third-party spend is more with our system integrators because we need their help to support us in delivering these new capabilities… the SIs [systems integrators], like the Accentures, the TCS, and the Infosys of the world—we’re having that conversation now. We are having a conversation about: ‘how are you consuming these capabilities, and how does that value show up to us?’ That’s a contractual conversation with SI that’s real.
Global CTO of professional services firm
CIOs’ feedback highlights the key factors that influence their decision-making processes. Here’s a summary of what each CIO emphasized:
- The first CIO has a highly structured software buying process, requiring sellers to approach them if the investment crosses a certain, recently lowered, threshold.
- The second CIO prefers sellers who ask insightful questions to better understand their needs, rather than just offering solutions.
- The third CIO prioritizes software that delivers clear cost savings.
- The fourth CIO also focuses on cost savings but still expects a business case, with more flexibility for emerging technologies.
- The fifth CIO seeks software with clear use cases, value, utility, and a realistic product roadmap.
- The sixth CIO wants a thorough understanding of the provider’s gen AI capabilities or a roadmap detailing how they plan to develop them.
- The seventh CIO stresses the importance of alignment between their business and external software partners, like Accenture.
How Can B2B Software Companies Win This New Business?
Fortunately, a16z has categorized customers based on different timeframes to help identify their pain points, priorities, and key performance indicators (KPIs).
This approach provides B2B software companies with winning strategies to tailor their offerings, focusing on the right customer segments and delivering solutions that align with specific business needs, ensuring they stay competitive in a shifting market.
So, over 85% of winnable IT spending is in industries not immediately impacted by AI. These companies aren’t interested in buzzwords—they care about how your product can save them money, increase revenue, or simplify their operations.
For AI founders, this means focusing less on flashy product-led growth and more on strong sales skills.
If you’re a B2B software company, now is the time to shift your strategy. Focus on value-driven selling to win over these customers. Ready to refine your approach? Dive deeper into the full article!

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