Trends in Global IT Spending

IDC links the Middle East conflict to global IT spending. Energy prices drive costs across data centers, semiconductor fabrication, cloud pricing, and logistics. Every link in the AI infrastructure chain runs on power. When oil moves, your deployment costs move with it. Their baseline scenario assumes a contained conflict. Global IT spending is still growing near 10% in 2026. But if escalation extends to three months, growth drops by a full percentage point. Device budgets and discretionary projects absorb the hit first. Memory chip supply was already tight before the conflict. Defense demand for advanced semiconductors could further squeeze availability and push DRAM and NAND pricing higher. That flows straight into AI hardware and enterprise storage costs. Three things IDC says stay funded regardless of how bad it gets: AI infrastructure, because it's embedded in the core strategy, and productivity gains matter more during inflation. Cybersecurity, because geopolitical escalation drives state-sponsored attacks, and nobody cuts security spending during a conflict. Sovereign digital platforms, because governments in the Gulf are accelerating national control over cloud and computing Everything else faces reprioritization. Consumer tech, device refresh cycles, and nonessential enterprise projects slow down first. Most IT budgets I review are built on the assumption of stable energy prices and predictable hardware costs. Neither assumption holds right now. If your AI deployment plan doesn't include a scenario where oil stays above $100 for six months, you're planning on conditions that may not exist by Q3. Stress-test the budget before the market does it for you. #Geopolitics #EnterpriseAI #ITSpending #AIInfrastructure #Cybersecurity #MiddleEast #Semiconductors #CIO #CFO #BusinessStrategy #DigitalTransformation #RiskManagement

The End of ‘Cloud-First’? How Enterprises Are Rewriting the IT Playbook   Cloud computing has long been heralded as the default path for enterprise IT, with public cloud vendors promising limitless scalability and transformational efficiencies. However, recent data reveals a significant shift in this narrative: cloud spending is leveling off, and in some sectors, it may even be declining. Organizations are becoming more strategic in their technology investments, moving away from a “cloud-first” mandate and instead toward a value-driven mix of public cloud, private infrastructure, and alternative providers. Several factors drive this change, most notably the rising total cost of ownership for many workloads in public clouds, paired with the decreasing price of enterprise hardware that makes private cloud and on-premises solutions far more attractive. Additionally, new options, such as special-purpose clouds, sovereign clouds, colocation facilities, and managed service providers, are emerging as compelling alternatives. This evolving landscape enables enterprises better to control costs, performance, and regulatory compliance. As global businesses seek to optimize their IT portfolios, the myth of inevitable all-in public cloud adoption is being replaced by a more nuanced, pragmatic approach—one focused on flexibility, business requirements, and maximizing long-term value.

I found the charts below fascinating. Why?   Over the last decade, technology capabilities have expanded dramatically. Cloud computing. Advanced analytics. Agentic AI. Yet across industries, IT spending as a percentage of revenue has remained remarkably stable. Companies today have access to exponentially more computing power, software capability, automation and intelligence than they did ten years ago, but are not spending a dramatically larger share of revenue to get it. The economics of technology have fundamentally changed. For CIOs, this creates both an opportunity and a challenge. The opportunity is obvious: technology can now create far more business impact per dollar invested than at any point in history. The challenge is proving where that value is actually showing up. This is where many organizations struggle. Technology investments rarely create value in a single place. They improve productivity in one function, accelerate decision-making in another, reduce risk somewhere else, and enable entirely new business models over time. The benefits are real but difficult to capture. As AI becomes more deeply embedded in how companies operate, this conversation will only become more important. The question is whether organizations have the management systems, metrics, and partnerships, particularly between CIOs and CFOs, to measure that value effectively and reinvest behind it. This article explores that challenge and offers a useful framework for thinking about it... https://lnkd.in/gPE85p5X

AI is quietly becoming the biggest new line item in enterprise #IT budgets. Morgan Stanley’s latest 3Q 2025 CIO survey (based on 100 IT leaders across enterprises with $500M to $20B+ in revenue) offers a data-backed look at how #AI is reshaping IT priorities and spend allocation. Here are five takeaways (with accompanying charts): 1) AI’s cloud footprint is set to triple. CIOs expect the share of public cloud spend tied to AI to rise from 2.6% today to 9.2% within three years. 2) 79% of CIOs expect GenAI workloads in production by 2026, up from 74% last quarter. 3) IT operations leads GenAI adoption (45% of enterprises), followed by marketing (27%) and customer service (24%) - proof CIOs are “eating their own dog food.” 4) AI is being funded with new dollars, not reallocation - 42% of CIOs said their GenAI initiatives are supported by net-new IT budgets. 5) GenAI tooling is becoming verticalized. CIOs are shifting spend toward application vendors like Salesforce and ServiceNow as preferred delivery models over hyperscale cloud providers. AI’s impact on IT is no longer theoretical - it’s now measurable in budgets, workflows, and vendor strategies. If you’re a #founder building the next wave of cybersecurity or IT infrastructure innovation, I’d love to connect.

KPMG US's new Cybersecurity Survey highlights a sharp 𝗿𝗶𝘀𝗲 in cyber investment, with 𝟵𝟵% of leaders planning budget increases and 𝗔𝗜‑𝗱𝗿𝗶𝘃𝗲𝗻 𝘁𝗵𝗿𝗲𝗮𝘁𝘀 𝗿𝗲𝘀𝗵𝗮𝗽𝗶𝗻𝗴 𝗽𝗿𝗶𝗼𝗿𝗶𝘁𝗶𝗲𝘀. But when you compare this with 2026 data from Gartner, Elisity, and CyberSaint, a more balanced picture emerges. https://lnkd.in/gQbS-QgP KPMG is right that AI has escalated both threat velocity and complexity. Most organizations are increasing spend on identity, cloud security, and data protection. But other research shows that 2026 isn’t about spending more everywhere—it’s about spending smarter. 1. 𝗕𝘂𝗱𝗴𝗲𝘁 𝗴𝗿𝗼𝘄𝘁𝗵 𝗶𝘀 𝘀𝘁𝗲𝗮𝗱𝘆, 𝗻𝗼𝘁 𝗲𝘅𝗽𝗹𝗼𝘀𝗶𝘃𝗲. Gartner projects ~$𝟮𝟰𝟬𝗕 𝗶𝗻 𝗴𝗹𝗼𝗯𝗮𝗹 𝗰𝘆𝗯𝗲𝗿𝘀𝗲𝗰𝘂𝗿𝗶𝘁𝘆 𝘀𝗽𝗲𝗻𝗱𝗶𝗻𝗴 𝗶𝗻 𝟮𝟬𝟮𝟲, growing 𝟴–𝟭𝟮% 𝗬𝗼𝗬. Elisity forecasts $𝟮𝟲𝟮𝗕, with similar growth. This is meaningful, but not the “surge” implied by KPMG. 2. 𝗖𝗜𝗦𝗢𝘀 𝗮𝗿𝗲 𝗰𝗼𝗻𝘀𝗼𝗹𝗶𝗱𝗮𝘁𝗶𝗻𝗴, 𝗻𝗼𝘁 𝗲𝘅𝗽𝗮𝗻𝗱𝗶𝗻𝗴 𝘁𝗼𝗼𝗹𝘀𝗲𝘁𝘀. CyberSaint’s 2026 Budget Playbook calls out 𝘁𝗼𝗼𝗹 𝘀𝗽𝗿𝗮𝘄𝗹 as a top inefficiency. Boards are pushing for:  • Converged platforms • Cybersecurity mesh • AI‑driven automation • Risk‑based investment models This contrasts with KPMG’s broader expansion narrative. 3. 𝗕𝗲𝗻𝗰𝗵𝗺𝗮𝗿𝗸𝘀 𝘀𝗵𝗼𝘄 𝗱𝗶𝘀𝗰𝗶𝗽𝗹𝗶𝗻𝗲𝗱 𝗮𝗹𝗹𝗼𝗰𝗮𝘁𝗶𝗼𝗻. Elisity recommends that $2B+ enterprises allocate: • 40% → platforms • 25% → services • 30% → personnel • 5% → training Manufacturing and healthcare sit at the higher end of the 10–15% IT‑to‑security ratio due to OT and clinical risk. 4. 𝗚𝗼𝘃𝗲𝗿𝗻𝗮𝗻𝗰𝗲 𝗮𝗻𝗱 𝗮𝘂𝗱𝗶𝘁 𝗽𝗿𝗲𝘀𝘀𝘂𝗿𝗲𝘀 𝗮𝗿𝗲 𝘀𝗵𝗮𝗽𝗶𝗻𝗴 𝟮𝟬𝟮𝟲 𝗽𝗹𝗮𝗻𝘀. Gartner’s 2026 Audit Plan Hot Spots highlights: • Geopolitical volatility • Cost pressure • Resilience expectations • Rapid AI developments 96% of CAEs plan to audit cyber vulnerabilities, but 𝗳𝗲𝘄𝗲𝗿 𝘁𝗵𝗮𝗻 𝗵𝗮𝗹𝗳 𝗳𝗲𝗲𝗹 𝗰𝗼𝗻𝗳𝗶𝗱𝗲𝗻𝘁 𝗶𝗻 𝘁𝗵𝗲𝗶𝗿 𝗮𝘀𝘀𝘂𝗿𝗮𝗻𝗰𝗲 𝗰𝗮𝗽𝗮𝗯𝗶𝗹𝗶𝘁𝗶𝗲𝘀—pointing to maturity gaps, not just funding gaps. (this is interesting and a huge opportunity for third part audit firms !)   5. 𝗔𝗜 𝗶𝘀 𝗯𝗼𝘁𝗵 𝗮 𝘁𝗵𝗿𝗲𝗮𝘁 𝗺𝘂𝗹𝘁𝗶𝗽𝗹𝗶𝗲𝗿 𝗮𝗻𝗱 𝗮 𝗳𝗼𝗿𝗰𝗲 𝗺𝘂𝗹𝘁𝗶𝗽𝗹𝗶𝗲𝗿. KPMG emphasizes AI‑enabled attacks. But Gartner, Elisity, and CyberSaint highlight AI’s defensive upside: • Faster detection • Automated response • Identity intelligence • Compliance automation The future isn’t “more tools”—it’s 𝗯𝗲𝘁𝘁𝗲𝗿 𝗼𝘂𝘁𝗰𝗼𝗺𝗲𝘀. 𝗧𝗮𝗸𝗲𝗮𝘄𝗮𝘆 KPMG captures the urgency of AI‑driven threats, but the broader research shows that 𝟮𝟬𝟮𝟲 𝘄𝗶𝗹𝗹 𝗯𝗲 𝗱𝗲𝗳𝗶𝗻𝗲𝗱 𝗯𝘆 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗿𝗲𝗮𝗹𝗹𝗼𝗰𝗮𝘁𝗶𝗼𝗻, platform consolidation, and measurable risk reduction. Cyber leaders aren’t just increasing budgets—they’re 𝗿𝗲‑𝗮𝗿𝗰𝗵𝗶𝘁𝗲𝗰𝘁𝗶𝗻𝗴 𝘁𝗵𝗲𝗺 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗔𝗜 𝗲𝗿𝗮.  𝗦𝗼 𝘄𝗵𝗮𝘁 𝗮𝗿𝗲 𝘆𝗼𝘂 𝗱𝗼𝗶𝗻𝗴 ?

🚨 Despite the NASDAQ hitting record highs, enterprise tech spending remains persistently cautious. That may not be bad news—but it does speak volumes about how decision makers are navigating uncertainty in this AI-fueled era. We’ve seen this movie before: in past transitions—mainframes to PCs, dotcom overreach, and the rise of cloud and SaaS—macroeconomic caution often masked a deeper conviction that a new wave was coming. Today, that wave is AI. In our latest Breaking Analysis, powered by ETR data, we dive deep into: 📉 Why January’s tech spending optimism has faded 📊 How spending trends correlate with 2-year treasury movements 🛡️ Why operational resilience is a top priority 💥 The cost and duration of cyberattack recovery 🧮 How organizations are reallocating—cutting staff, delaying projects, trimming cloud ☁️ Why cloud, despite pressure, is still outpacing every other sector 🤖 Where AI is showing real gains (and where it’s still just potential) 📈 What a 10% global productivity boom means in a $100T+ economy 💡 Our advice? Don’t sit on the sidelines. But don’t over-rotate either. Pick business-value-driven use cases, go for the easy wins, and build a culture that’s ready to ride—not fear—the next wave. Full breakdown here 👉 https://lnkd.in/eYjNMzq7 #BreakingAnalysis #EnterpriseTech #AI #CloudComputing #Cybersecurity #TechSpending #Macroeconomics #DigitalTransformation #ETRData #AIProductivity #Resilience #theCUBE

The IT services landscape is evolving in so many ways since the early 2000s when I ran a SaaS consulting services company. Here are the major trends I’m seeing based on the past several months collaborating with global services firms: AI + Automation Transformation - Traditional labor arbitrage giving way to AI SaaS powered delivery models - GenAI integration becoming standard across service offerings - Focus shifting from FTE-based to platform/product-based delivery Business Model Innovation - Services firms aggressively pursuing new revenue streams - Hybrid offerings combining services with productized applications - Movement from time & materials to outcome-based pricing Margin Enhancement - Strategic shift toward IP-driven solutions to expand margins - Platformization of services to improve scalability - Leveraging AI + Automation to optimize delivery economics Talent Dynamics - Attrition and wage inflation in traditional offshore locations - Hybrid skill requirements (technical + domain + soft skills) - Remote/hybrid delivery becoming permanent The winners will be those who can successfully navigate the transition from traditional labor-based models to platform-driven, AI-enabled service delivery while creating innovative business models that drive both growth and margins. All while delivering greater value and impact for clients. What trends are you seeing in the global services space?

Global spending on cloud infrastructure services reached $95.3 billion in Q2 2025, up 22% year on year. According to Canalys (part of Omdia), cloud demand increased due to AI consumption, revived legacy migrations, and cloud-native scale-ups. As hyperscalers advance their AI capabilities and applications, more customers are adopting multi-model approaches to meet specific cost and use-case requirements. In Q2 2025, Amazon Web Services (AWS), Microsoft Azure and Google Cloud continue to dominate this market with a 65% combined market share of global cloud infrastructure spending. Collectively, customer spending with these three hyperscalers increased 27% year on year. Microsoft Azure (39% y/y growth) and Google Cloud (34% y/y growth) continue to outgrow market leader AWS (17% y/y growth). When taking AWS share lead into account (bottom chart), in actual dollar terms, AWS’s year-on-year increase outpaced that of both Microsoft and Google Cloud. Hyperscalers are experiencing a significant increase in customer demand, with growth driven by AI-related workloads alongside a rebound in traditional migrations and continued capacity expansion by cloud-native enterprises. Investment in AI infrastructure continues to accelerate. In July, Google lifted its 2025 capital expenditure target from US$75 billion to US$85 billion; earlier, AWS projected total spending for 2025 to exceed US$100 billion, while Microsoft announced plans to invest approximately US$80 billion in infrastructure expansion in the current fiscal year. Yi Zhang of Canalys (part of Omdia) pointed out a key trend that customer demand for AI services is evolving from a primary focus on availability and ease of use to a greater emphasis on flexibility and fit-for-purpose model choice. An increasing number of enterprises are seeking the capability to switch between different AI models based on specific business requirements, enabling them to achieve an optimal balance of performance, cost and application fit. Amid this trend, AWS Bedrock, Azure AI Foundry and Google Vertex AI continue to broaden their portfolios of proprietary and third-party models, spanning the full spectrum of capabilities from high-complexity reasoning to low-latency response, thereby supporting a wider range of industries and workloads. Much like the entire $5.3 trillion tech industry, coopetition has become the norm in the generative AI landscape: vendors compete on model advancement and product capabilities even as they collaborate on compute capacity and model distribution. For example, AWS Bedrock aggregates models such as Anthropic’s Claude and OpenAI’s GPT, while OpenAI has added Google Cloud to its compute network to bolster capacity.

The global IT market will more than double in the decade between 2020 and 2030 driven by AI, the industry's fourth era-defining technology. The tech industry is still at the start of this fourth great era of tech spending, which is expected to drive the industry through the 2020s and 2030s. The technology industry grows through these 20-year eras. It started with mainframes through the 1960-70s, where IBM reigned supreme. Then came the client/server decades between 1980-90s when Wintel ruled the world led by Microsoft and Intel Corporation. We moved into the cloud era through the 2000s and 2010s. Amazon Web Services (AWS) arrived to become the dominant force, with Microsoft Azure and Google Cloud rounding out the big three hyperscalers. We now enter the cusp of the AI era. The winners and losers are still yet to be defined. What we can already see is a mix of veterans like Microsoft, NVIDIA, AWS and Google working alongside the likes of OpenAI and Anthropic as partners, suppliers and competitors, often all at the same time. What is inarguable is the critical role of partners to bring these tech megatrends to customers. Just as with the vendors, the winners in the partner community will undoubtedly include a mix of legacy channel companies who successful transform alongside new entrants currently operating out of garages and basements, or not even founded yet. Omdia forecasts a 9.1% CAGR for IT to the end of this decade, when spending will reach $8.49 trillion. That's 2.2x the 2020 spending of $3.93 trillion. The major accelerator will be data centre expansion to support artificial intelligence. Omdia estimates 205GW of net-new IT capacity will be deployed over the next five years, with 20 companies or megaprojects delivering nearly half, as annual data center CAPEX climbs to $1.6tn by 2030. Here's how major product and services categories will shape up over the coming years according to the latest forecast from Omdia's Global IT Opportunity Analysis research: • Infrastructure growth (driven by AI data center buildout) of 13.5% CAGR, led by servers at 17.3% CAGR. • Components up +13.3% CAGR driven by investment in power distribution and backup, racks, and thermal management. • Operationalizing AI will drive software growth +11.5% CAGR and re-accelerate IT services +10.6% CAGR • Omdia projects the enterprise agentic AI software market will reach $41.8bn in 2030, with broader GenAI software growing to $122.8bn. • AI adoption will also create new IT services opportunities. Omdia projects the global partner opportunity for AI services will hit $267bn by 2030. • Cloud infrastructure services will grow at 22.4% CAGR as workloads continue to migrate and AI drives higher consumption. • IT managed services will grow 9.4% CAGR as partners shift toward higher‑value, outcome‑led delivery, despite commoditization of highly repetitive tasks from automation.

The worldwide total addressable IT market is projected to reach $6.07tn in 2026, expanding at 10.2%, according to latest research from Omdia. This marks the fastest pace of growth in over a decade, driven primarily by hyperscaler and neocloud AI infrastructure capacity buildout, and the operationalization of AI across businesses and governments. IT spending to, through and with partners will grow 6.7%. Despite their share of the total addressable IT market declining to 66.7% in 2026, partners will continue to have most influence on organizations’ IT decisions. But vendor-delivered IT spend will grow more than 2.5 times faster, driven by major hyperscaler AI infrastructure expenditure, underscoring the shifting dynamics of global IT spending. Key opportunities for partners in 2026: • Business AI SaaS will represent the single largest growth opportunity for partners, with success hinging on their ability to transact effectively through cloud marketplaces. Cloud infrastructure services will remain a powerful driver of expansion, fueled by the continued migration of on‑premises workloads.   • Data center modernization and cyclical campus network refreshes, accelerated by Wi‑Fi 7 adoption, will further expand opportunities in servers and networking. Cybersecurity will continue to be a critical growth engine, with demand concentrated on SecOps modernization, cloud security, and the emerging imperative to secure AI platforms.   • IT services will act as growth multipliers, particularly managed services and offerings that help customers operationalize AI. Consulting, deployment, and integration services, areas that have faced pressure in recent years as customers cut costs and delayed transformation, will regain importance as organizations re‑engage in modernization initiatives.   • By contrast, client devices and imaging will deliver the weakest growth. PC demand will slow as the Windows 11 refresh cycle tapers off   Despite these opportunities, partners face mounting complexity driven by rapid technology shifts, evolving customer expectations, new business models, and a reset in vendor relationships that increasingly favor larger partners. Compounding these challenges, the current memory shortage is expected to affect partners more severely, as hyperscalers secure supply, posing the greatest risk to achieving forecast growth rates.