IT modernisation spending is predicted to rise by almost 30% in 2024, largely due to companies investing millions in Artificial Intelligence (AI), according to research by Couchbase. The survey of global IT leaders reveals that while 98% of enterprises have specific GenAI (generative AI) goals for 2024, some 59% state they will need to instigate significant investment in data management, with 54% admitting they do not yet have a fully-fledged GenAI data strategy in place.
The research indicates that intelligent investment decisions are required. More than a quarter of businesses are shifting IT budgets away from other areas such as IT support and management, and security, to meet their GenAI objectives. Some 64% of respondents argued that companies have been hasty in their adoption of GenAI, failing to appreciate the necessary conditions for its safe and effective use. However, the right level of investment in infrastructure and data management could ensure firms enter the AI era confident and ready.
The average enterprise is planning to spend $35.5 million on IT modernisation in 2024, with over a third of this outlay on AI, which equates to more than $21 million on the technology in 2023-24, and $6.7 million on GenAI specifically. Yet this considerable investment is not always successful, often held back by a reliance on outdated technology unsuited to the new digital requirements. This mismatch results in an average annual wasted investment of $4 million, and delays the delivery of strategic projects by 18 weeks.
Another revelation from the survey is that 71% of IT departments face increasing pressures to do more with less. To stay competitive, businesses need to enhance productivity by 33% year-on-year. Additionally, 60% of enterprises are concerned about whether their compute power and data centre infrastructure are sufficient to support GenAI, while 61% fear their commitment to environmental responsibility and CSR precludes a full adoption of GenAI.
According to Matt McDonough, SVP of product and partners at Couchbase, "Almost every enterprise we surveyed has specific goals to use GenAI in 2024, and if used correctly this technology will be key to managing the challenges facing organisations." McDonough's emphasis on caution is borne out by another of the survey's findings, that 64% of companies are believed to have adopted GenAI too rashly without a full understanding of what's required to use it effectively and securely. Yet despite these potential pitfalls, he is optimistic about the role of GenAI in managing acceleration in productivity demands and satisfying end-users' demand for continually improving experiences.
McDonough concluded, "Investing in the right data management and infrastructure architecture will help unlock GenAI's transformative potential… An adaptive application that can use GenAI to enhance a specific end-user experience will be equally effective while also having a much faster time to market. And a modern multipurpose database with all necessary functionalities will help keep architectures and costs as streamlined as possible."
