Hello. This is Stanton Jones along with Alex Bakker, Michael Dornan and Sunder Sarangan with a special edition of what’s important in the IT and business services industry this week.
If someone forwarded you this briefing, consider subscribing here.
AI Abounds Despite Constraints
Enterprise IT organizations have some big plans for AI in 2025. However, these plans will play out in the midst of continued cost optimization and a tight labor market.
And this is why we see two major themes emerging in 2025: 1) enterprises will deploy AI to improve productivity, and 2) they will fund it by optimizing costs elsewhere.
Given this context, here are seven key themes for enterprise IT in 2025. You can read the full post with charts here.
Priority No. 1: Secure Funding for AI. Enterprise spending on AI is projected to go up by 6% in 2025, but the overall IT budget will go up by only 2%. This means IT organizations will be on the hunt for savings to fund their AI programs.
Priority No. 2: Increase Productivity. With most large enterprises expected to prioritize profits over aggressive growth in 2025, IT organizations will be laser-focused on getting more from the resources they have today.
Priority No. 3: Find a Scalable, Cost-Effective Source of AI Expertise. Most enterprises lack the internal capability to execute on their AI initiatives. This is leading to a search – often global in nature – to find that expertise.
Priority No. 4: Align Delivery Models Based on Expertise, Cost and Risk. Due to the rapidly shifting nature of AI use cases and technology, AI initiatives will likely lend themselves to project-based or staff augmentation delivery models.
Priority No. 5: Decouple Data Management from Technology Management. Enterprises will spend a lot of 2025 focused on data acquisition, engineering and governance independent of the underlying systems that store this data.
Priority No. 6: Accelerate “Wave 2” GenAI Use Cases. Wave 2 use cases will be focused on scaling expertise, rather than just capacity. That said, only 15% of GenAI use cases are in production today, so enterprises will need to establish a repeatable and reliable path from initial pilot to production.
Priority No. 7: Reduce Complexity in Cloud. Enterprise cloud adoption has picked back up, primarily driven by interest in AI. However, companies want to avoid the cloud sprawl that occurred post-pandemic. They’ll use service providers to do this, but fewer of them in 2025.
As a reminder, you can read the full post here. Next week we’ll cover the implications of these priorities on the IT and business services industry in 2025.
About the authors
Stanton Jones
Stanton leads ISG's Index research, helping providers, investors and ISG clients make sense of the global IT services sector. Stanton’s weekly newsletter, the Index Insider, is read by thousands of market stakeholders each week. An ISG Digital Fellow, Stanton has been quoted in Fast Company, Forbes and CIO.com, and has appeared on national cable news.
Alex Bakker
Michael Dornan
Michael Dornan is a Principal Analyst in Provider Services based in the UK. He is responsible for ISG’s Buyer Behavior research program, helping providers navigate changing market dynamics, identify unmet enterprise demand, and position services and solutions that align to client needs.
