Expected IT Investments Set for Recovery, According to Gartner's Predictions
In a recent announcement, Gartner, a leading research and advisory company, has predicted that strategic investments in Artificial Intelligence (AI) technologies, associated infrastructure, and AI-integrated engineering practices will dominate Information Technology (IT) spending in 2025. This shift is driven by the potential for innovation, automation, cost reduction, and sustainable competitive advantage that AI offers.
According to Richard Gordon, Managing Vice President at Gartner, much of the 2.1% growth seen during 2012 was driven by spending on devices, which grew 9% to $665 billion. This trend continues, with enterprises dealing with a high volume of data, increased velocity, and complexity, as stated by Gordon.
The strategic IT projects predicted by Gartner for 2025 include:
- AI and Generative AI (GenAI) Digitization Initiatives: Despite some overall cautious spending due to global uncertainty, investments in AI-related technologies continue to surge. AI is seen as defining the future of competition over the next decade, with 62% of surveyed senior leaders identifying AI as a primary competitive driver. Enterprises will invest in AI and GenAI to maintain their competitive edge amid an eroding economic environment.
- AI-Optimized Data Center Infrastructure: Spending on AI-optimized servers is rapidly growing and expected to triple that of traditional servers by 2027. This surge is driven by the demand for infrastructure that supports advanced AI workloads, especially GenAI applications.
- AI-Native Software Engineering: By 2028, Gartner predicts that 90% of enterprise software engineers will use AI code assistants, transforming software development from manual coding to AI-driven orchestration, focusing more on problem-solving and system design. Organizations should prioritize embedding AI throughout the software development lifecycle to accelerate innovation and efficiency.
- Organizational Automation and Labor Cost Reduction via AI: By 2026, 20% of organizations are predicted to reduce labor costs by using AI to flatten organizational structures, significantly reducing the need for middle management positions, emphasizing business process transformation enabled by AI.
These projects are driven by the critical need to stay competitive as AI redefines markets, the necessity to support AI workloads requiring strong infrastructure investments, the transformation of software engineering to leverage AI for automation and efficiency, and the broader trend of digital transformation becoming essential, not optional, for organizational resilience.
The strategic IT projects will also include projects focused on the 'Nexus of Forces' - cloud, mobile, social, and information. Gordon predicts a shift in strategic spending towards business intelligence, analytics, content management, and database software.
While the US economy is showing signs of improvement, according to Gordon, and Europe's economic situation is becoming better understood, there is no new information about these economic situations in the context of this prediction. It is worth noting that discretionary IT spend, such as consulting for projects with ill-defined business cases, will not increase.
Gartner predicts a 4.1% increase in global IT spending this year, reaching $3.8 trillion. By 2017, Gartner predicts that only 20% of device spending will be on PCs and laptops, with smartphones and tablets being significant drivers of the device spending growth, according to Gordon.
In summary, Gartner's predictions underscore the importance of strategic investments in AI technologies for businesses aiming to stay competitive and innovative in the years to come.
- Businesses aiming to maintain their competitive edge and thrive in an eroding economic environment will invest in AI and Generative AI (GenAI) digitization initiatives, as they see AI as a primary driver of innovation and competitive advantage.
- As part of their broader digital transformation strategies, organizations will prioritize embedding AI throughout the software development lifecycle, with 90% of enterprise software engineers expected to use AI code assistants by 2028, transforming software development from manual coding to AI-driven orchestration.
