With AI tools now commonplace in software engineering, nearly two-thirds (60%) of organizations are expected to shrink team sizes by 2029. But that doesn’t necessarily spell bad news for engineers, according to Gartner.

Analysis by the advisory firm suggests the shift toward smaller engineering teams won’t be a cost-cutting exercise, but rather a natural evolution toward more agile, specialized units focusing on specific areas.

Gartner envisages these smaller teams being composed of specialist product managers alongside user experience (UX) - or agent experience (AX) designers, and at least one ‘AI-native’ engineer.

Speaking to ITPro, Gartner principal analyst Aliyah Camacho, said this influx of AI has prompted a rethink of how enterprises can “really make the most of AI and humans working together”.

“What we’re seeing is that organizations are looking at engineers as AI orchestrators,” Camacho told ITPro.

“One aspect of tiny teams is that we’re thinking of them as focused on a product or a set of features for a product, so it’s bringing together more of that product management skills and expertise onto the team.”

The concept of engineers moving toward more of an orchestration-style role has become a recurring talking point over the last 18 months. AWS CTO Werner Vogels told ITPro earlier this year that the traditional image of developers as “code monkeys” is fading.

With AI in the mix, developers and engineers can now focus on other tasks, such as quality assurance and testing, Vogels said at the time.

Gartner’s research echoed this, noting that with the technology handling routine technical tasks, this will ultimately free up engineers to focus on “complex problem-solving and innovation”.

With tiny teams, Camacho said this will essentially remove a layer of friction for engineers. Simply put, the AI does the grunt work, while engineers have time to focus on product development and refining existing software.

These teams will also have their own remit similar to product development teams, meaning they’re staying in their own lane and not getting dragged into other areas.

“What we're predicting to be speed or velocity-type gains with tiny teams is that these small teams are fully accountable for the success of their product or feature,” she explained.

“So removing that layer of having additional approvals and coordination is one type of speed gain,” Camacho added. “Then another is having fewer people on the team means that there's less time spent in that communication and handoff type of activity.”

How tiny are we talking?

Naturally, what constitutes a ‘tiny team’ will vary wildly based on the size of the enterprise. Small teams today, also known as ‘two-pizza teams’, typically have between five and eight people, Camacho said.

Generally speaking, the shift to tiny teams could take this down to five or six. Some, on the other hand, could end up with just two or three, Camacho noted.

“This really varies,” she said. “Some are curious about experimenting with teams of three, and then for others a meaningful reduction in size is down to six.”

Ultimately, these changes will be made on an enterprise-by-enterprise basis, but leaders should be wary of downsizing down too much. These teams should be small enough that they’re agile but also remain effective and have enough diversity of ideas.

Not a cost-cutting exercise

Given that the last two years have seen repeated warnings about AI rendering developers obsolete, some might see a shift to smaller teams and figure this is another excuse to offload staff.

Camacho insisted that this isn’t a cost-cutting exercise, however. Teams will be smaller, but the consultancy predicts there will eventually be more of these tiny units working away in the background building software.

This is where communication from leadership will be vital in fostering change, Camacho noted.

“I think that a huge piece of making this kind of change is communicating really clearly about what it is and is not, and the tiny teams model is not a cost optimization tactic,” she said.

“Rather, it’s a restructuring of teams to best take advantage of AI and human expertise. What we’re seeing with this idea is that team size reduces, but the number of teams may actually stay the same, or may increase, because we’re expecting more demand for complex engineering solutions at organizations.”

Room for juniors

Maintaining robust talent pipelines will also be a key focus with the shift to tiny teams, according to Gartner. If anything, junior engineers will be more crucial than ever to compensate for general attrition and to provide AI-native skills.

The impact of AI on entry-level jobs has been a recurring talking point over the last 18 months, with the need for junior engineers questioned by some industry stakeholders.

This is where the ‘how small is too small’ question comes into play, according to Camacho.

“We absolutely believe that organisations need to continue hiring junior talent to build that pipeline for the future,” she said.

“So the way that fits with tiny teams in this context is reducing team size, but not making it too small because if the team size shrinks too much, that can pose risks.”

Long-term, the solution to developing junior talent could lie in apprenticeship-style models, she added, noting that this “could fit really well with the tiny teams model”.

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The SaaS industry is facing a pending wave of disruption as enterprises shift their focus towards agentic AI solutions, according to new research from Gartner.

With agentic AI adoption continuing at pace globally, the research firm said this poses a significant threat to traditional software revenue models.

Indeed, up to $234 billion of application spending will be exposed to "agentic arbitrage" – where agents render some services obsolete by removing the need to work across multiple interfaces – by 2030.

George Brocklehurst, managing vice president at Gartner, said the study shows agentic AI “changes the economics of software”.

“Agentic systems deliver outcomes directly, bypassing traditional user experience (UX)-heavy applications and making the software invisible,” he said. “This breaks the link between user growth and revenue growth for many enterprise software vendors.”

No ‘SaaSpocalypse’, but a ‘metamorphosis’

Long-term, Gartner noted that this agentic AI-focused shift will “refactor” how software is built, priced, and consumed. Indeed, Brocklehurst said a period of “redefinition” could come, with the firm describing this transformation as a "metamorphosis".

“This metamorphosis represents threats and opportunities for both incumbents and new challengers,” Gartner said.

Gartner’s claims regarding a period of transformation for the SaaS space align closely with predictions made by industry stakeholders on the potential impact of AI.

Earlier this year, software stocks plummeted amid a mass sell-off due to the arrival of powerful new AI solutions, particularly Anthropic’s Claude Cowork service.

This spooked investors, with some concerned about a ‘SaaSpocalypse’ whereby agents could remove the need for certain software services.

Despite lingering concerns, some industry leaders are still bullish on the future of SaaS – albeit with a few caveats. As ITPro reported in February, AWS CEO Matt Garman poured cold water on the prospect of a looming SaaSpocalypse, suggesting that “much of the fear is overblown.”

Staying competitive

Remaining competitive in a changing market will require incumbent software vendors to “move from interfaced-based value to outcome-based value,” according to Gartner.

Put simply, providers will need to embed agentic capabilities within their offerings to defend their position and meet changing expectations.

Enterprises don’t want disparate tools and dashboards anymore, the researchers claimed, they want streamlined, end-to-end workflow automation and solutions that “capture customer context and knowledge”.

“As organizations increasingly use agentic AI systems, the user interface is no longer a differentiation,” Brocklehurst said. “Legacy SaaS market share will be cannibalized by incumbents and taken by new entrants delivering horizontal agentic platforms.”

“While this shift is posing an existential threat for vendors who are defending legacy dashboards and seat-based models, it creates a substantial revenue opportunity for vendors who are enabling and developing services and platforms to support agentic enabled cross-domain workflows,” he added.

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Enterprises are struggling to deliver improvements to IT infrastructure with AI, according to new research from Gartner, with IT leaders facing serious integration challenges.

In a recent survey of infrastructure and operations (I&O) leaders, the consultancy found only 28% of AI use-cases “fully succeed and meet ROI expectations”. Around 20% fail outright, meanwhile.

A key factor in failure rates is that enterprises are essentially shoehorning AI into areas that aren’t applicable and expecting immediate returns.

Melanie Freeze, director of research at Gartner, said many AI initiatives are either “overly ambitious or poorly scoped”.

More than half (57%) of respondents have reported at least one failure in this regard, Gartner found, and Freeze noted that many “expected too much, too fast”.

“They assumed AI would immediately automate complex tasks, cut costs, or fix long-standing operational issues,” she wrote in a recent blog post.

“When expectations are not realistically set and the results don’t appear quickly, confidence drops and projects stall.”

Other factors, such as internal skills capabilities, also play a key role in success or failure with AI projects. More than one-third (38%) of I&O leaders said “persistent skills gaps” have had a serious negative impact on projects.

A similar number of respondents also identified poor data quality or data availability as a contributing factor behind a failed AI project.

Separating the winners from the losers

Gartner’s survey found that successful AI deployment rarely depends on the sophistication or quality of the technology, but instead rests on how well it is integrated, governed, and “aligned with real operational needs”.

Simply put, a clear-cut strategy and relevant use cases are vital to ensuring successful delivery. Freeze noted that I&O leaders that have reported success “don’t run AI as side projects” and “start with realistic business cases and upfront preparation”.

Around one-third (33%) of successful I&O leaders have embedded AI within systems and processes that staff already use in their daily workflows, allowing for a more seamless integration process.

Freeze added that a large portion of successful deployments came in IT service management (ISTM) and cloud operations, two areas where markets are “mature” and boast “proven business value”.

More than half (53%) of I&O leaders reported that successful initiatives have occurred in ITSM, Gartner found.

The study also highlighted a “strong correlation between success and leadership buy-in”.

More than one-quarter (26%) of leaders who’ve reported success said they had full executive support, while 25% said they relied heavily on cross-functional collaboration to implement the technology.

“This matters because executive backing helps remove roadblocks, align priorities, and ensure the investment stays funded and focused,” according to Freeze.

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Global tech spending is rising relentlessly, new research shows, driven by AI, the cloud, and growing cybersecurity concerns.

According to Gartner, worldwide IT spending is expected to reach $6.15 trillion in 2026, up 10.8% from last year.

“AI infrastructure growth remains rapid despite concerns about an AI bubble, with spending rising across AI‑related hardware and software,” said John-David Lovelock, distinguished VP analyst at Gartner.

“Demand from hyperscale cloud providers continues to drive investment in servers optimized for AI workloads.”

Server spending will accelerate in 2026, the firm noted, growing 36.9% year-over-year. Total data center spending is expected to increase by 31.7% to more than $650 billion, up from nearly $500 billion in 2025.

Software spending, meanwhile, is predicted to increase by 15.2% for both application and infrastructure software, while spending on generative AI is expected to rocket by 80.8%.

Device growth, however, is expected to slow in 2026, at 6.1%, with total spending on devices projected to reach $836 billion in 2026.

“This slowdown is largely due to rising memory prices, which are increasing average selling prices and discouraging device replacements,” said Lovelock.

“Additionally, higher memory costs are causing shortages in the lower end of the market, where profit margins are thinner. These factors are contributing to more muted growth in device shipments.”

Bullish European tech spending

The picture is much the same when it comes to European tech spending, according to figures from Forrester. The consultancy predicts tech spending across the region to hit €1.5 trillion for the first time this year.

Despite the economic impact of US tariffs, particularly on Ireland, the EU economy remains resilient, with real GDP growth in 2026 expected to hit the same level as in 2025.

More than 70% of tech spend growth between 2025 and 2030 will stem from enterprise and government investments in computer equipment and software, the Forrester found.

“In spite of economic volatility worldwide, tech spending will see robust growth, fueled by the defense, financial services, healthcare, industry, and retail sectors’ continued investment in and adoption of AI,” said Michael O’Grady, principal forecast analyst at Forrester.

“Our research finds, however, that in order to successfully manage the impacts of tariffs, trade wars, and strong AI investment in the year ahead, businesses will need to prioritize AI initiatives that both drive productivity and foster the growth of AI-driven tech talent.”

As for the UK, things are moving fast from AI experimentation to performance - particularly in the financial sector, where three-quarters of institutions have already adopted AI technologies.

"We are witnessing a bold commitment to R&D, with defense and healthcare leading the charge; specifically, NHS technology spend is on track to nearly double to £10 billion by 2029," he said.

"Despite external economic pressures and tariff risks, the UK’s strategy to increase AI compute capacity and target £22.6 billion in R&D spending by 2030 signals a clear, long-term vision for technological leadership."

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IT spending in Europe is projected to surge 11.1% in 2026, according to new figures from Gartner, but analysts have told ITPro this bullish investment highlights a drastically changing industry landscape.

Across the region, spending will surpass $1.4 trillion in total, driven across the board investment in traditional high-growth areas such as data centers, devices, software, and IT services.

Notably, software spending will account for the largest share of growth next year, according to John-David Lovelock, distinguished VP analyst at Gartner.

Speaking to ITPro ahead of the release of the new figures, Lovelock said this showcases the rabid scramble to capitalize on new AI features as enterprises enter the “trough of disillusionment”.

Over the last 20 years, spending on the part of consumers, IT companies, and enterprises have all “mixed into our data book” and have been “moving in conjuncture”, Lovelock noted. It’s a cadence that’s come to be expected based on macroeconomic conditions.

“They spend money based on their feeling of prosperity. You know what they spend on changes, but tech providers build new software tools and develop things including the cloud,” he explained.

“Enterprises [and] consumers buy mobile phones and IT services, particularly communication services, based on how prosperous they're feeling. There's a certain cadence to all of it.”

That cadence was rocked with the advent of generative AI in late 2022, Lovelock added, with technology providers investing heavily in the technology to drive adoption rates while consumers and enterprises are drawn in different directions.

“It's come in such a foundational way, because it is a foundational technology. It's not like the cloud, it's not like the internet, it's like electricity,” he told ITPro.

“We have technology and service providers spending wildly to get in front of AI, whether it's generative AI, agents, agentic AI, they are spending in order to be at the cutting edge of that – to build products and services that enterprises will buy.”

Yet while spending figures point toward a bullish market, the reality on the frontline is very different. Enterprises have become bogged down in adoption projects and increasingly disillusioned with returns from the technology.

Analysis from the consultancy shows around 90% of AI projects failed across a 12 month period in the last year, for example.

It’s here that the high software spending figures begin to make more sense, Lovelock noted. Software spending isn’t growing because providers are securing an array of net new clients, it’s because the same companies are spending more money to try and eke out whatever gains they can from AI.

European software-related spending for 2025 stands at around $290 billion, while in 2026 this is expected to grow 15.6% to over $335 billion, underlining the push on both the part of enterprise end-users and providers.

“Enterprises are going to be turning to their software providers, their current incumbent software providers, to bring them AI features and functionality,” he said.

“So they will be spending more on software, not necessarily because they're going out to buy this software, buy these new functions, but their incumbent software providers will be selling them these new functions.”

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Global PC shipments grew by 8.2% in the third quarter of 2025, according to new figures from Gartner.

Across the quarter, PC shipments totaled more than 69 million units globally, the consultancy revealed, marking a notable increase compared to the same period in 2024.

A key factor behind this growth, Gartner noted, was due to the Windows 10 end of life deadline on 14 October. Enterprises and consumers alike rushed to secure new hardware ahead of the deadline, which saw the end of security updates and technical support.

“In the third quarter of 2025, worldwide PC shipments were driven by the Windows 10 end-of-support (EOS) refresh cycle in most regions, while North America's growth was limited to 1.6% as demand had been accelerated into the first half of the year due to anticipated import tariffs,” said Rishi Padhi, research principal at Gartner.

Padhi noted that consumer demand “remained subdued at the lower price points,” largely as a result of challenging macroeconomic conditions.

“Consumers continue to exhibit cautious spending behavior — delaying PC purchases and seeking promotional offers.”

AI PCs are fueling sales

Although the Windows 10 end of life deadline had an impact on shipments, the continued industry shift toward AI PCs also contributed to the increase, according to Gartner.

The consultancy said it estimates that the AI PC market will account for around 31% of total device shipments in 2025, marking a steep increase compared to just 15% recorded in 2024.

All told, this means more than 77 million AI PC units will be shipped across the year.

Previous research from Gartner on the AI PC market showed these devices will “become the norm” by 2029, accounting for a 55% share of the broader PC market.

Separate analysis from IDC in March this year suggested that eight-in-ten IT decision makers plan to invest in AI PCs across 2025, underlining fierce enterprise appetite.

IDC’s figures show AI PCs could command an even higher share of the overall PC market by 2028, with a 93% share.

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Security leaders need to embrace AI hype to get the attention of board-level executives and improve staff engagement, according to experts at Gartner.

Christine Lee, VP research at Gartner and Leigh McMullen, distinguished VP analyst at Gartner, told attendees of the Gartner Security and Risk Management Summit 2025, held in London, that organizations need to uphold security while encouraging AI tool use.

Shadow AI, the pair said, can be both a challenge and an opportunity for security staff, as they look to get a grip on AI risks without stifling staff innovation.

“Having a good AI discovery process is the foundation of a versatile AI cyber security program. Use existing tools like web proxies and log management systems to discover what employees and app developers are already doing with AI,” said Lee.

“Once you've discovered this shadow AI your job is to offer guidance better than ‘nope not approved’ because shadow AI is very quickly becoming ambient AI, embedded in everything.”

They gave the example of the mobile games company Playtika, which analyzed the AI tools its staff were already using. For each tool, security teams assessed how beneficial it was to the business, whether it was irreplaceable, and if its potential risks such as data exposure could be managed.

If it passed these checks, the team allowed the tool to be used, then reviewed why proper adoption channels hadn’t been used in the first place.

The pair stressed that chief information security officers (CISOs) need to encourage rather than punish staff for using AI whenever possible or see further burnout and employee disengagement.

Gartner’s 2022 Workforce Change Fatigue Survey showed enterprise change initiatives had increased 400% since 2016, while across the same period employee support for change dropped 36%.

McMullen noted that this period predates generative AI adoption, which has only added to the scale and speed with which organizations are changing.

Gartner’s recent Talent Marketing Survey found 36% of workers in environments with high uncertainty reported burnout, while 37% reported high intent to leave their roles, compared to 2% and 0% in environments with more certainty.

To combat this uncertainty, leaders should look to create more stable environments for staff and lean into the opportunities AI presents when it comes to automating boring tasks. This could include answering policy questions or fixing vulnerabilities in code.

Lee suggested that leaders could look to empower staff already using AI by giving them more autonomy and agency, improving staff buy-in, AI skills, and resilience.

In this way, McMullen said, cybersecurity leaders can “harness and rebound off hype’s change energy”, with enthusiasm at the employee and leadership level acting as an opportunity to drive organizational change with little to no pushback.

AI expansion necessitates proper controls

All of this is being put to the test as AI adoption ramps up. Lee warned that tension between cybersecurity leaders and the rest of their organization “gets worse in a hype-driven world where everyone’s bombarded by the promise of new technology” and employees jump at the opportunity to automate workloads.

“CISOs, you folks are in a unique position because unlike any other role in the organization, you must help protect the enterprise’s investment in AI, while protecting it from AI, which of course you’re not going to be able to do without AI,” said McMullen.

In Gartner’s latest AI Survey, 53% of respondents said they are in the process of building custom AI tools and Lee said this is an opportunity for leaders to unlock “quick wins” such as running tests and supporting security use cases.

“When AI gets to production, consider specialized AI runtime controls,” said Lee.

“There is massive room for improvement here: our data shows that only 23% of you have implemented AI runtime controls. The market is maturing quickly, emerging tools can inspect and validate queries and responses within an AI pipeline. They can also prevent sensitive data leakage with real-time data masking.”

Organizations will also need to pair new AI tools with new security processes that encompass harmful outputs, hallucinations, and intellectual property risks.

Gartner data shows 51% of security leaders are planning to establish incident response plans unique to their custom-built AI, including remediation and isolation procedures, McMullen explained, as well as risk assessments that update data retention policies to protect AI input and outputs.

“When Leigh and I say become literate about how AI works, its risks, its limitations, we don't mean that as an injunction not to use AI.

“In fact, the opposite: we must experiment in order to develop practical insight into which use cases are effective, safe, and secure. So be bold with AI, designate AI champions in the way that you've done security champions, spend the next 18 to 24 months collecting use cases, practising with them in cybersecurity first.”

Focus on metrics, not scare tactics

From AI to targeting new ransomware trends, CISOs have a number of priorities to bring to their boards. But when it comes to pitching executives, particularly for more investment, the speakers urged attendees to lean into enablement rather than fear.

Lee gave an example in which, following a ransomware attack on a competitor, a CEO named Sarah asks her CISO for strategic advice and whether a similar attack could happen against her firm.

“You have Sarah’s undivided attention – but now you also have a couple of choices. You could go in the direction of fear, uncertainty, and doubts, start slipping her brochures or you rant about protection tools, hoping to get some more budget.

“Lee and I hope you don’t do that, because that would erode your credibility as a trusted advisor. Or you could take a different path and show Sarah how your cybersecurity team is already making targeted investments that not only protect the enterprise today, but also future proof for the coming new product lines in AI automation.”

To set out this certainty, Lee and McMullen urged attendees to establish protection level agreements (PLAs), defined by McMullen as “formal agreement on the amount of money the enterprise is willing to spend to deliver a desired level of cybersecurity protection”.

Turning back to the example of Sarah the CEO, the pair asked the audience to imagine 20% of her organization’s critical systems in production had procedures to keep them operational in the event of a ransomware attack.

This would be the current ‘implicit protection levels’, which could spark a board-level conversation about the level of risk with which leadership is comfortable and the levels of protection for which they’re willing to provide funding.

In their example, the speakers showed how this hypothetical business could look to increase that 20% figure to 70% by spending $1 million – or choose to go even further to 80% for $1.5 million.

McMullen said this data-driven debate is essential, as it’s nearly impossible to establish an objective return on investment (ROI) for cybersecurity spending:

“Let’s be real here, have you ever tried to calculate the ROI of an anti-ransomware tool? What is it, existence? This is nonsense.

“Instead, framing the discussion in terms of PLAs makes the conversation one of cost-benefit analysis and trade-offs, much more intuitive and understandable.”

The Institute of Cancer Research has measured a 37% increase in cybersecurity budget since introducing PLAs, with its executive committee voting on areas of cybersecurity most in need of investment based on detailed data.

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Generative AI attacks are accelerating at an alarming rate, according to Gartner, with 29% of organizations experiencing an attack on their AI application infrastructure in the last 12 months.

In a survey of 302 cybersecurity leaders in North America, EMEA, and Asia-Pacific, the consultancy found that 62% of organizations experienced a deepfake attack involving social engineering or exploiting automated processes.

Audio incidents were more common than video, with 44% reporting social engineering during a call with a supposed employee, compared with 36% in the case of video calls.

Similarly, 32% experienced deepfake audio used against automated voice biometrics, compared with 30% in the case of face biometrics or identity verification.

Analysis from the consultancy found AI assistants are now a top target for threat actors, and they’re vulnerable to a variety of adversarial prompting techniques.

Attack methods highlighted in the study included prompts aimed at manipulating large language models (LLMs) or duping multimodal models into generating malicious outputs.

All told, 32% of respondents to the Gartner survey said they’d experienced an attack of this kind over the last year, representing a significant uptick.

“As adoption accelerates, attacks leveraging GenAI for phishing, deepfakes and social engineering have become mainstream, while other threats — such as attacks on GenAI application infrastructure and prompt-based manipulations — are emerging and gaining traction," said Akif Khan, VP analyst at Gartner.

Generative AI attacks are changing the game

While 67% of cybersecurity leaders said emerging generative AI risks require significant changes to existing cybersecurity approaches, Gartner recommends a more cautious strategy.

“Rather than making sweeping changes or isolated investments, organizations should strengthen core controls and implement targeted measures for each new risk category,” said Khan.

Meanwhile, in a separate report, Gartner noted that organizations are increasingly turning to pre-emptive cybersecurity practices rather than standalone detection and response (DR).

By 2030, pre-emptive cybersecurity solutions are expected to account for 50% of IT security spending - up from less than 5% just a year ago.

Pre-emptive cybersecurity technologies use advanced AI and machine learning to anticipate and neutralize threats before they materialize. They include capabilities such as predictive threat intelligence, advanced detection, and automated moving target defense.

“Pre-emptive cybersecurity will soon be the new gold standard for every entity operating on, in, or through the various interconnected layers of the global attack surface grid (GASG),” said Carl Manion, managing vice president at Gartner.

“DR-based cybersecurity will no longer be enough to keep assets safe from AI-enabled attackers. Organizations will need to deploy additional countermeasures that act pre-emptively and independently of humans to neutralize potential attackers before they strike.”

Gartner predicts a shift from broad, one-size-fits-all DR security platforms toward more targeted pre-emptive cybersecurity tactics, many of which will be based on agentic AI and domain-specific language models (DSLMs).

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Two-fifths (40%) of data centers could face constraints in power availability by 2027 as AI demand continues to ramp up, according to research from Gartner.

Forecasts for electricity consumption growth in the data center industry are as high as 160%, Gartner said, creating a landscape in which four out of every ten will face power challenges in three years' time.

Gartner estimates the power required to run AI-optimized servers in 2027 will reach 500 terawatt hours (TWh), 2.6 times the figure of 195 TWh in 2023.

By 2025, the figure will be 335 TWh, and by 2026, 401 TWh.

Hyperscale growth on the back of generative AI is the culprit, Gartner analyst Bob Johnson said, as power demand is exceeding the available capacity of utility providers and power grids.

“In turn, this threatens to disrupt energy availability and lead to shortages, which will limit the growth of new data centers for GenAI and other uses from 2026,” Johnson said.

Short-term power outages will continue for years despite plans for larger data centers, Johnson added. New transmission, distribution, and generation capacity could take years to come online and also won't alleviate current problems, he said.

Similarly, power shortages will ramp up the price of energy, in turn increasing the cost of operating AI and large language models (LLMs). Gartner estimates that these costs will be passed on to AI and generative AI product and service providers.

Sustainability goals will also take a hit, as short-term solutions are deployed to provide more power whether or not they're climate-friendly. For example, Gartner said fossil fuel plants scheduled for retirement may be kept operational.

“The reality is that increased data center use will lead to increased CO2 emissions to generate the needed power in the short-term,” Johnson said.

How can businesses prepare?

In the first instance, Gartner recommended organizations determine the risks that potential power shortages will have on a business's products or services as the creation of new data centers becomes governed by power availability.

It also suggested that organizations plan with an anticipation of higher power costs. They should look to negotiating long-term contracts for data center services at reasonable rates while factoring in cost increases when developing new offerings.

Re-evaluating sustainability goals around CO2 emissions may be necessary, Gartner said, as power requirements and power sources change over the next few years.

Firms should aim to use the minimum amount of computing power when developing generative AI products, it added, as well as look at the viability of small language models (SLMs) and edge computing.

Fewer than half of digital initiatives hit their business outcome targets, according to research from Gartner, with only a small proportion doing much better.

A survey of more than 3,100 CIOs and technology executives - and over 1,100 executive leaders outside of IT (CxOs) - by the consultancy found it's only among the 'digital vanguard' that the majority of digital initiatives meet or exceed business outcome targets.

"This digital vanguard distinguishes themselves from the rest of CIOs and CxOs because they co-own digital delivery," said Raf Gelders, VP of research at Gartner.

"CIOs and CxOs are equally responsible, accountable and involved in delivering the digital solutions their enterprises need. This is a radical departure from the traditional paradigm of IT delivery and business project sponsorship that predominates in most enterprises."

More than 80% of EMEA CIOs said they expected to increase their investments in cybersecurity, AI or generative AI, and business intelligence and data analytics in 2025, Gartner noted, underlining the continued appetite for digital transformation and emerging technologies.

But the difference between success and failure is how the organization views the adoption of these technologies and what they can deliver, Gelders noted.

"Digital vanguard CIOs do not invest in these technologies to be used by their IT staff only. They also make them easy to use for potential or actual technologists outside of IT," said Gelders.

"On average, there is 26% of business/corporate area staff outside of IT dedicated to building, implementing or managing technology. Many of these technologies naturally lend themselves to easing the burden of work enterprise-wide, accelerating time-to-market and time-to-value, and fostering the accountability of CxOs."

Meanwhile, 43% of EMEA CIOs said they expect to decrease their investment in legacy infrastructure and data center technologies - a trend that's become more common in recent years, mainly thanks to migrating to cloud-based solutions.

One-third, however, are planning to increase investment in this domain. The majority of this investment will be among organizations that are using on-premise infrastructure to experiment and produce generative AI solutions.

Perhaps surprisingly, skills development doesn't seem to be much of a priority.

Only 14% of EMEA CIOs said they prioritize building an enterprise-wide technology workforce - beyond their own IT departments - and just one-in-five are prioritizing sharing technology leadership with other business areas.

Cross-functional collaboration and knowledge exchange is critical to delivering success in any digital transformation program, according to Daniel Sanchez-Reina, VP analyst at Gartner.

Therefore, businesses that lack synergy across different business areas could encounter significant problems. The digital vanguards, however, excel at this.

"Digital vanguard CIOs nurture their peers to become digital vanguard CxOs. Those CIOs make it easier for their CxOs to lead digital with them and for business area staff to build digital solutions together with IT,” said Sanchez-Reina.

“CIOs' success now depends on their CxOs’ success," he added.

To become a digital vanguard, Sanchez-Reina said there are four key areas that CIOs must prioritize. These include:

• Making digital platforms easy for the workforce to build solutions
• Teaching them the interdependencies between technology and business
• Helping business leaders become “innovation leaders” in digital
• Expanding digital skills beyond the IT department

European organizations are expected to ramp up IT services spending in 2025 as CIOs focus their IT budgets on delivering tangible business benefits from generative AI.

IT spending as a whole across Europe is expected to hit $1.28 trillion in 2025 — a 'remarkable' 8.7% increase, according to Gartner, and the highest growth rate in IT spending in a single year in Europe since the post-pandemic surge in 2021.

"In 2024, the surge of building out AI-related infrastructure by technology providers is driving high levels of spending on data center systems in Europe," said John-David Lovelock, distinguished VP analyst at Gartner

"CIOs in Europe will continue investing in public cloud end-user spending, which is estimated to reach $123 billion in 2024, and grow their security spending, projected to reach $47 billion in 2024."

Outstripping that is the surge in IT services spending related to AI, which Gartner expects to grow by 21% to reach $94 billion in 2025.

Organizations in Europe, the consultancy said, will increasingly shift from buying generative AI solutions to implementing partner solutions during 2025.

“The limited success of many pilots and proofs of concept (POCs) in 2024 will push European organizations to shift from building their own GenAI solutions to buying and implementing partner solutions in 2025,” said Lovelock.

Expect a data center spending boom

Data center spending is growing at a rapid rate, according to Gartner. The consultancy recorded a 25% increase this year, largely due to increased demand for AI-optimized servers.

While this is likely to slow in the year ahead, Gartner expects spending in this domain to still increase by around 11% across 2025.

"Europe has seen a remarkable 46% increase in server spending by technology providers in 2024. In 2025, technology companies will continue building out the infrastructure needed for training GenAI models today and inferencing them in the future."

Global spending boom pending

Globally, Gartner revealed IT spending is expected to reach $5.74 trillion in 2025, marking a 9.3% from this year. Again, it's generative AI that's behind the overall boom.

Most spending on generative AI so far has come from technology companies building the supply-side infrastructure for the technology, Lovelock said, but CIOs will begin to spend on generative AI beyond proof-of-concept work next year.

Lovelock urged IT leaders to temper expectations, however.

"More money will be spent, but the expectations that CIOs have for the capabilities of GenAI will drop,” he said. “The reality of what can be accomplished with current GenAI models, and the state of CIO’s data, will not meet today’s lofty expectations."

80% of the software engineering workforce will need to upskill by 2027, according to Gartner, to keep pace with the growing demands of generative AI.

The necessity of upskilling can be considered in the short, medium, and long-term as Gartner predicts the technology to play an increasingly larger role in engineering tasks.

In the short term, AI tools will create modest increases in productivity by supporting a developer’s existing work, the consultancy said, with this process already underway. The most significant benefit in this time frame will be for senior developers.

After this stage, AI agents will start to have an impact on engineering. Allowing for the full automation of certain tasks, this evolutionary period for both the technology and the profession will see the emergence of “AI-native software engineering” in which most code is AI-generated.

“In the AI-native era, software engineers will adopt an ‘AI-first’ mindset, where they primarily focus on steering AI agents toward the most relevant context and constraints for a given task,” said Philip Walsh, senior principal analyst at Gartner.

From a skills perspective, Walsh added that natural language prompt engineering and retrieval augmented generation (RAG) skills will become essential for software engineers at this point.

In the long term, the industry will see a rise in AI engineering as the technology becomes more powerful. Organizations will need an increasing amount of skilled developers to meet the demand for AI software, the consultancy suggested, as enterprise adoption rates continue rising.

“Building AI-empowered software will demand a new breed of software professional, the AI engineer,” Walsh said.

“The AI engineer possesses a unique combination of skills in software engineering, data science and AI/machine learning (ML), skills that are sought after,” he added.

Gartner advised that organizations invest in AI developer platforms, as these could help to more effectively build AI capabilities. Walsh added that such an investment would require the upskilling of data engineering and platform engineering teams.

Despite speculation that AI may reduce the demand for human engineers, Walsh said the technology will not replace humans outright even as it changes the role of software engineers.

“Human expertise and creativity will always be essential to delivering complex, innovative software,” Walsh said.

While Gartner suggests the inevitability of AI upskilling, engineers looking to take on the challenge sooner rather than later are increasingly sought after by big firms.

At the start of this year, for example, research from AWS revealed that some employers are willing to pay a 31% premium on salaries for tech workers with AI skills.

Other research from job firm Indeed revealed that AI skills could secure workers some of the most financially rewarding jobs, with half of the highest-paid skills related to AI and offering an average salary of $174,000.

Executives are divided over AI responsibility and most organizations lack guidance on the technology at a C-suite level, according to a new report from Gartner. 

In a survey based on responses from more than 1,800 executives, only 25% of those surveyed said they could identify who in their organization was “primarily accountable” for AI initiatives and delivery. 

These respondents said that the CIO was primarily accountable, while 16% named their organization’s “AI leader” as responsible. Similarly, 12% named their “business unit leader”. Notably, 12% also responded that they were “unsure” or that they felt the question was not applicable.

Accountability is evidently spread out, according to Gartner, and the decentralized or siloed nature of some organizations creates confusion as to where responsibility for AI initiatives lies. 

“AI and GenAI are complex and far-reaching and touch every job, activity and strategic conversation in the organization,” said Gartner’s Frances Karamouzis. 

While more than half (54%) of respondents did indicate that their organization had a “head of AI,” indicating some level of executive direction, 88% noted their AI leader did not have C-suite status.

Gartner said this is because most boards “do not want to expand the C-suite” and, as executives take direction from their board, this restricts the likelihood of an AI-specific role coming into play. 

Businesses could benefit from executive guidance on AI

As AI continues to gather steam, many businesses are beginning to consider the advantages of defining a specific C-suite role for AI initiatives, often dubbed the Chief AI Officer (CAIO).

The benefit here is that an organization can more effectively craft an AI strategy without creating more work for existing executives, though Karamouzis was careful to point out that C-suite status is not necessarily vital.

Those “responsible for orchestrating AI” at an organization don’t need “a title at the altitude of the C-suite,” Karamouzis said, despite businesses needing a clearer direction on development of the technology.  

Businesses do, however, need an AI board according to Karamouzis, despite the fact that organizations are divided on the topic.

“Enterprises need an AI board to transcend the multidisciplinary challenges to drive value and reduce risk,” she said.

“However, the duration, scope, and resourcing is context-specific and use-case dependent. For some, it’s a short-term, stopgap measure. For others, it’s a longer-term change to their operating model.”

When respondents were asked to identify the three key focuses of an AI board, 26% highlighted governance while 21% pointed to strategy, clearly suggesting the extent to which executives appreciate the need to manage AI.

“AI board member composition should have representation from multiple disciplines and cross business units,” Karamouzis said.

“It’s up to each organization to determine the best approach to drive speed and agility within their organization to ensure that the board does not get unwieldy and unproductive due to inability to meet or drive consensus,” she added.  

Impressive growth in the global cloud computing market is expected to continue across 2024 and beyond, analysts have told ITPro. 

As generative AI continues to be a focus for enterprises, along with other burgeoning trends in the cloud market such as sustainability, the overall cloud economy will continue to benefit, according to Gartner analyst Hardeep Singh. 

“Already we’ve seen growth accelerating in 2024, and we’re projected this to continue through 2025 as enterprises integrate generative AI into their technology portfolio,” Singh told ITPro. 

“New markets and opportunities continue to develop around sovereignty, ethics, privacy and sustainability,” he added. 

The cloud market grew significantly over the last year with enterprise spending on cloud infrastructure services reaching over $76 billion globally for Q1 2024, according to data from Synergy Research Group.

This represents an increase of $13.5 billion from Q1 2023, marking 21% growth and making it the second consecutive quarter in which year-on-year growth has improved.

Synergy estimated that quarterly cloud service revenues from IaaS, PaaS, and private cloud solutions were $76.5 billion, with public IaaS and PaaS accounting for a 23% bulk of the market. The overall cloud services market also had trailing twelve month revenues reaching $283 billion.

Hyperscalers continue to dominate the sector, with AWS maintaining a strong lead at 31% market share and Microsoft and Google Cloud following at 25% and 11% respectively.

The big three account for 72% of the global public cloud, according to Synergy Research Group. However, other companies with smaller percentages of the market such as Huawei, Snowflake, MongoDB, and Oracle, are making headway off the back of enterprise AI interest. 

“Through 2023, all of the hyperscalers made significant investments in AI-powered enhancements to their existing platforms and developer-focused offerings,” Singh said. 

“This is expected to continue through the next several years as the market matures, alongside rising AI/ML workloads from organizations moving pilot projects into production,” he added.   

Though the market is now too large to return to pre-2022 growth rates, chief Synergy analyst John Dinsdale said, the market is continuing to expand substantially, contrary to fears last year that the cloud sector was approaching a global slowdown. 

“We are forecasting that it will double in size over the next four years,” Dinsdale said. 

Claims of a slowdown at the beginning of 2023 were based on a study from the Uptime Institute, which showed that AWS and Microsoft experienced slower growth toward the end of 2022. 

This was attributed to economic uncertainty at the time, with rising costs and disruptions causing organizations to begin cutting back on spending and restricting budgets. 

These fears were put to bed in late 2023, however, after a whirlwind year in which major hyperscalers performed well off the back of widespread enterprise interest in generative AI.

Earlier this year, research from Canalys predicted an increase of 20% in global cloud spending for 2024, estimating that key factors such as enterprise IT optimization would begin to drive growth.

Gartner has revealed what it considers the top five technology trends that governments across the world will need to grapple with in 2024.

The list reflects the rise of new cyber security threats and disruption from the adoption of AI, as well as growing instability in the global economy, which are all said to be putting greater pressure on governments.

Top of the list is adaptive security: Gartner predicts that by 2028, multi-agent AI in threat detection and incident response will rise from 5% to 70% of AI implementations, augmenting rather than replacing staff.

"Government CIOs and leaders need to overcome any lingering resistance to the adoption of adaptive security by linking its value to broader organizational objectives, such as digital innovation and transformation, national security objectives and operational resilience," says Todd Kimbriel, VP analyst at Gartner.

Gartner also lists the digital identity ecosystem, which includes user authentication, unique citizen or organization identifiers, and credential verification such as smartphone-based identity wallets.

Government CIOs can build a stronger digital identity strategy by building on existing use cases and partnerships to break out of traditional sector silos and bring greater value for citizens, government, and businesses, the analyst house concludes.

It also says that, by 2026, more than 70% of government agencies will use machine learning, analytics and generative AI to enhance human decision making through tools to support improved government service delivery.

"These tools will need to be subject to careful governance, so it’s important government CIOs drive AI adoption and governance policies throughout the organization," says Kimbriel.

"They must develop a strategy that incorporates these policies with a focus on desired outcomes, then take a continuous assurance approach to ensure they are maintained after implementation."

Platform cloud-based solutions also make the list, with Gartner recommending that government CIOs implement a multicloud strategy to maximize these opportunities. Cloud-native capabilities in these platform solutions provide greater cost control and faster time to value, it says.

Finally, government leaders are demanding increased use of data for decision making and planning through programmatic data management: a systematic and scalable approach to enable enterprise-wide use of data assets, which is being advanced by automation platforms and their ability to incorporate AI capabilities.

According to Gartner, more than 60% of government organizations will prioritize investment in business process automation by 2026, up from 35% in 2022.

"Data remains the basis of decision making in government, and the growing proliferation of AI re-emphasizes the need for government CIOs to enhance the quality and efficiency of data at scale by improving the rules and structures that govern it," says Kimbriel.

Global cloud spending is expected to increase by 20% in 2024, according to new research from Canalys. 

Analysis from the consultancy points to an optimistic outlook in the industry for the year ahead off the back of a 19% year on year (YoY) growth rate recorded in Q4 of 2023, with total spending reaching $78.1 billion.

Canalys said this marked an increase of $12.3 billion, with the total cumulative yearly increase of 2023 amounting to $290.4 billion - up from $247.1 billion in 2022.

A key factor in the increase, according to Canalys, is that the “influence of enterprise IT optimization” is fading. As a result of this, more customers are building on their commitments with hyperscalers in anticipation of heightened consumption requirements over the coming year.

Cloud migration projects are also picking up speed in tandem with an increasing surge in the adoption of artificial intelligence (AI), Canalys said.

Hyperscalers in particular are focusing on generative AI investment with an expectation that it will enhance cloud computing capabilities. 

Cloud spending shows the ‘slowdown’ might be over

The latest analysis from Canalys points toward a more optimistic outlook in the year ahead for both enterprises and providers alike. 

In January 2023, industry analysts warned of a potentially disastrous “cloud slowdown” as enterprises cut spending on cloud services due to tightening budgets and increased economic uncertainty. 

But research from Gartner in late 2023 found that while budgets were still tight, many organizations viewed proactive investment in the cloud as a means of weathering troubling economic conditions and preparing for future success. 

The consultancy predicted a similar spending boost of 20% in 2024 and beyond. 

Sid Nag, VP analyst at Gartner, told ITPro at the time that cloud has become “essentially indispensable”, adding that many enterprises have come to accept that neglecting investment in this business domain could create longer-term challenges and impact their ability to compete. 

How the hyperscalers are performing

Amazon Web Services (AWS), Google Cloud Platform (GCP), and Microsoft Azure all saw varying degrees of growth due to cloud spending increases, according to Canalys.

Though accounting for the smallest amount of growth in 2023, AWS still leads the pack in cloud infrastructure, dominating the market and accounting for 31% of total market spend. 

After a few quarters of slowing growth, AWS also saw a small upward trajectory in 2023 with a revenue increase of 13%. Its future committed spending by customers now stands at $155.7 billion, a YoY increase of about $45 billion. 

“AWS has been slower than its key competitors to make AI advances, which may explain why its growth is not accelerating as rapidly as that of Azure and GCP,” said Yi Zhang, analyst at Canalys. 

Microsoft Azure is the second in line in terms of size, now claiming an enhanced market share of 26% as of Q4 2023. This compares to 23% in Q4 2022. 

This can be attributed in part to an increased level of AI adoption, according to Canalys, as Azure has been expanded to support the entire suite of OpenAI’s large language models (LLMs).

GCP, on the other hand, grew to account for 10% of the market, accumulating $74.1 billion in revenue backlog by December 2023. This is up from $64.3 billion at the close of 2022, a significant sum for the comparatively smaller cloud computing service provider.

Google has also maintained its focus on expanding channel partnerships to drive growth, tripling the number of its “co-sell deals” since 2022. 

Strict return to office (RTO) mandates have become a major flashpoint for organizations in recent months, but it doesn’t have to be this way, experts have told ITPro. 

Research from both Gartner and Randstad UK has highlighted the correlation between strict return to office mandates and employee satisfaction. Gartner’s research, released at the end of January, found that employee intent to stay among average employees was 8% lower with RTO mandates and 16% lower among high-performing employees. 

Meanwhile, Randstad UK found that, out of 2,000 surveyed employees, more than half (54%) of workers described the ability to work from home as “non-negotiable.” 

The argument on both sides can often be linked to productivity, but  is often conflicting. The National Bureau of Economic Research suggested that “Information Workers” were 18% less productive when working fully remote, while 59% of workers told RingCentral that they felt more productive in a remote setting. 

While businesses may want to push workers back into the office, they also need to avoid pushing workers away altogether.  

With staff vocally prioritizing a relaxed approach to RTO policies, then, businesses should ask themselves what a successful RTO process entails. 

“To prevent employee attrition, HR leaders should avoid rigid RTO mandates and instead seek to implement RTO strategies that maximize talent and business outcomes,” Garnter said.  

Return to office policies should motivate, not mandate 

Businesses should prioritize the rewards of in-office working, rather than threatening the punishments of remaining remote. 

Some businesses, such as Google, have opted for the former, with the tech giant introducing measures that would include office attendance levels as part of performance reviews. This came after a flurry of spats between Google and its staff over enforced RTO measures. 

Opting for the latter, on the other hand, could bring about huge benefits for employee satisfaction, according to Michael Doolin, CEO of Clover HR. Speaking to ITPro, Doolin said business leaders should help foster an environment in which firms don’t have to fight tooth and nail to enforce TRO policies. In doing this, staff will naturally warm to them. 

“Whilst it’s not unreasonable to expect employees to return to the office, it’s important to recognise that the environment has changed, and things may never return to the previous norm,” he said.

Doolin added that the office setting needs to be adapted. It needs to be optimized for the return of those who may feel discouraged by RTO, or those who have been fully remote for a long time. 

“This might even include things like preferred office layout,” he added. “Remember, a physical return can be difficult, so offering professional mental health support can ease the process. 

Staff need to be part of the policy conversation

RTO is far from a one-size fits all situation, and businesses need to respect that. 

Individual mandates need to work for individual employees. While companies at large have certain requirements, whether in the form of productivity projections or office guidelines, individual workers also have their own requirements. 

“Leaders are constantly navigating demands between the collective and the individual,” Emma O’Connor, director and head of HR training at Boyes Turner, told ITPro.  

“While managers are looking at what’s best for the business, employees are asking “How do I want to work?” she added. “The how, when, and where can become a point of conflict.” 

Each employee situation and each business is different, so flexibility makes sense on both sides of the equation. Decision makers need to pursue RTO policies which can be tailored as part of ongoing conversations between employee and employer.

“While it might be better for an employee with two school-aged kids to work from home, we find more Gen Z colleagues want to be in the office – for support, encouragement and mentoring as much as the social considerations,” O’Connor added.  

“There must be flexibility both ways.”

Employers need to be transparent about requirements

According to Gartner, organizations that transparently communicated their reasoning for wanting employees to return to the office saw “positive impacts on engagement, discretionary effort, and retention.”

Transparency is always key to motivation, though this is especially true in the case of a remote workforce which, up and until the implementation of an RTO mandate, will have had no reason to come back to the office. 

Providing these workers with clear, transparent reasons for returning to the office is vital if organizations want any sort of success with their RTO mandates. 

Microsoft, for example, pointed to its own research, suggesting that remote working policies led to a decrease in collaboration and community. 

The bottom line was, of course, that employees should head back into the office in order to reap the social benefits. 

Global shipments of AI PCs are set to surge across 2024 and account for nearly one-quarter of all PCs, according to new analysis from Gartner. 

Research from the consultancy shows that 54.5 million AI PCs will be shipped by the end of the year, accounting for 22% of all devices. Similarly, generative AI smartphones will also surge in popularity across 2024, Gartner said.

The increase in both AI PC and smartphone shipments marks a sharp rise on the year prior. Combined, 295 million AI PC and smartphone units will be distributed by the end of the year, up from just 29 million units in 2023.

Ranjit Atwal, senior director analyst at Gartner, said the heightened interest in AI PCs in recent months means these devices will “eventually become a standard requirement for technology vendors”.

However, Atwal said the scale of AI PC roll-outs by key industry vendors means many will face acute challenges in differentiating product lines.

“This ubiquity will pose challenges for vendors in differentiating themselves from competitors, making it harder to create unique selling points and drive increased revenues.”

Gartner’s research also found that the integration of AI into PCs is not expected to drive end-user spending beyond anticipated price increases, adding that business device purchasers will “demand compelling reasons to invest”.

“It will take time for software providers to harness the power of on-device AI and clearly demonstrate its enhanced benefits,” the consultancy said.

Crucially, the surge in AI-powered devices comes amid a period of tentative recovery for the global PC industry. The market, which experienced a significant downturn amid curtailed post-pandemic spending, returned to growth in the fourth quarter of 2023.

The rebound followed eight consecutive quarters of decline. Gartner said it expects overall PC shipments to reach 250.4 million units in 2024, marking a 3.5% increase from the year prior.

On-device AI will play a key role in helping to “rejuvenate the marketing of PCs through 2024 and help sustain existing anticipated replacement cycles”, the consultancy noted.

Will AI PCs be a flash in the pan industry fad?

AI PCs have rapidly become the latest industry buzzword, with a host of major device manufacturers, including HP, Dell, and Lenovo, all signaling their intention to ramp up production of AI-supported devices in the last quarter alone. 

In December 2023, Intel chief executive Pat Gelsinger suggested that AI PCs will be the “star of the show” in 2024 amid growing interest from both consumers and enterprises alike.

Gelsinger’s optimism on this front has been matched by other industry execs, with HP chief executive Enrique Lores insisting that the emergence of generative AI will create a "new kind" of PC.

But beyond the industry hype, analysts are also confident that AI PCs will become an increasingly important piece of kit in the enterprise arsenal moving forward.

Previous research from Canalys aligns closely with that of Gartner, with the consultancy suggesting that these devices could herald a “watershed moment” for the PC industry and “reinvigorate the market” after a record-breaking slump.

Canalys’ study predicted that 19% of all PCs shipped globally in 2024 will be AI capable, and moreover, it expects that 60% of all PCs will be AI capable by 2027.

Job satisfaction has plummeted for CISOs over the last year, with three quarters (75%) actively considering a career change, according to new research from IANS and Artico.

The share of CISOs who described themselves as satisfied with their job dropped by 10 points to 64%, the study found, raising concerns over a potential brain drain of senior security practitioners.

More than 660 CISOs contributed to the research, dubbed the State of the CISO 2023-2024 report, with researchers gauging the thoughts of security executives across a range of industries. .

The report found that, while many CISOs remain optimistic about the prospect of harnessing new technologies and improving productivity, the majority feel overworked and under-supported.

For example, CISOs now increasingly fear that they will be held to a C-suite level of accountability by regulators.

Conflictingly, only 20% of CISOs are regarded as C-suite level by other executives, and just 50% engage with the board regularly. In turn, 28% of CISOs without board engagement are satisfied compared to 57% with at least infrequent or ad-hoc board engagement.

"We see CISO satisfaction positively correlated with access and influence at the board level”, said Steve Martano, a partner in Artico Search’s cyber security practice and IANS Faculty member.

“CISOs with a strong rapport with their boards feel more valued and generally report they are ‘heard’, even when there are disagreements on budgeting”.

Even those with board engagement are bereft of the proper executive training, however.

Only 20% of CISOs suggested that they had received internal mentoring from non-tech colleagues, and, with the value of this training equivalent to more than $200,000, disgruntled CISOs are inevitable.

CISOs don’t get the decision making guidance to make up for this either, with 85% indicating that their board should offer clear guidance on organizational risk tolerance, compared to just 36% actually receiving it.

CISOs are getting burnt out

The IANS study on CISO job satisfaction aligns closely with previous research on the matter, particularly around issues of overworking and mental health. 

A study from Gartner in February 2023 revealed that nearly half of cyber security leaders are expected to change jobs by 2025 due to career-related stress and strenuous working hours.

Research from Tessian, meanwhile, found that increased demands being placed on senior practitioners has led to a toxic culture of overworking and excessive hours, with CISOs found to work an average of 11 additional hours each week.

This, the study pointed out, has led many to miss important life events and holidays, and is having an adverse impact on their mental and physical wellbeing.

Global IT spending is expected to reach $5 trillion in 2024 according to new research by Gartner, rebuffing fears that the sector spending was flagging. 

The total constitutes an overall increase of 6.8% compared to a growth rate of almost half in 2023 (3.3%).

A breakdown of IT spending in both years shows that, for the first time ever, spending on services surpassed spending on communications by just under $30,000 (£23,678), making it the largest area of spending.

Devices showed the highest rate of growth at 12.7%, followed by IT services at 8.7% and data center systems at 7.5%. While data center systems remained the lowest spending in real terms at $261,332 (£206,025), communications services saw the smallest rate of growth at 2.3%.

Gartner said the figures represent a robust improvement in the industry, though at least one issue of 2023 will likely persist - mainly ‘change fatigue’.

Previous research from Gartner has highlighted that, while 75% of organizations expect the number of major firm-wide changes to increase over the next three years, only 34% of these changes are clear successes.

Contending with higher levels of effort and poorer results, CIOs become disillusioned by the idea of developing their business, creating growth loss as a result of change fatigue.

While 2024 looks to be more enthusiastic, change fatigue could begin to manifest itself as “change resistance” according to Gartner. Industry uncertainty could create a hesitance to commit to projects or sign off on large-scale initiatives.

IT spending driven by "traditional forces"

While some may have expected generative AI to drive IT spending in some areas, Gartner's research shows that the technology has had little impact.

Research from the consultancy last year showed that the generative AI had "no material impact" on IT spending in 2023, and this trend was expected to continue into 2024. 

Instead, IT spending across the year is likely to be driven by more "traditional forces", according to John-David Lovelock, VP analyst at Gartner.

“While GenAI will change everything, it won’t impact IT spending significantly, similar to IoT, blockchain and other big trends we have experienced,” he said. 

“2024 will be the year when organizations actually invest in planning for how to use Gen AI,” he added. “However, IT spending will be driven by more traditional forces, such as profitability, labor, and dragged down by a continued wave of change fatigue.”

Huge AI energy costs aren’t attractive to IT departments, while large upfront investments and problems with generative AI hallucinations also remain appealing to those making decisions about IT spending.

Areas much more likely to drive IT spending include cloud services, with a global spending increase of 20.4% predicted in 2024.

If businesses have learned anything over the past few years, it’s that the right technology investment is crucial to staying nimble and navigating tricky economic periods. 

With inflation impacting IT spending in 2023, businesses had to be selective over which technologies to invest in and which to defer to a time when budgets are less tight. Global IT spending is expected to rise 8% year-over-year to $5.1 trillion in 2024, a significant improvement on the 3.5% increase in 2023, according to Gartner projections. 

The jump is down to what’s called ‘change fatigue’ – triggered by the rapid ongoing digitization, accelerated by the pandemic, CIOs and other IT leaders have been wary about committing funds to new projects while employees face digital transformation burnout. This has pushed some of what may have been spent in 2023 into 2024 and 2025. 

Amid these concerns, ITPro spoke to experts in the field to identify the core themes and issues that are likely to influence IT spending in 2024.

Spending in 2024: Budgeting will be a juggling act

For those IT leaders who are committed to investing in digital transformation this year, it might be difficult to know where to start, especially given the overwhelming number of technology options on the market. 

“It’s going to be a juggling act for IT departments to decide where to spend in 2024,” says David Lees, CTO at Basis Technologies, a provider of DevOps and test automation software for SAP, whose customers have included Honda and Procter & Gamble. 

Lees tells ITPro that he thinks companies could put a portion of their 2024 budgets aside for when they start migrating SAP systems onto S/4HANA, ahead of the mandated 2027 deadline. “On the user experience (UX) front, I expect we will see IT departments aim to attract and retain customers by implementing more accessible, intuitive interfaces. This is part of the ongoing trend towards greater customer service and product satisfaction.”

Some businesses may also finally decide to move to cloud hyperscalers that can help in handling greater amounts of data and traffic and more complex workflows, Lees adds.

Spending in 2024: Cloud concerns will still loom

Hyperscalers often give the impression that they’re low-cost, but IT leaders believe that the perception that the cloud is cheaper is, in fact, misleading, according to research by Civo. Four-fifths of 1,000 businesses surveyed in 2022 called for hyperscalers to reduce their charges. 

Unfortunately, cloud prices have continued to surge in 2023 as a result of inflation and aren’t expected to come down anytime soon. IBM announced in September that it’s to increase its cloud prices by up to 29% from January, a move that will impact users of its infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) offerings.

“Increase in prices by the cloud vendors is a cause for concern, but is inevitable … Cloud spend will increase significantly in 2024,” says Anjali Subburaj, interim lead enterprise architect at European online pet food retailer Zooplus. This is echoed by Gartner, which has forecast global spending in 2024 on public cloud services to rise 20.4%, similar to the level of growth seen in 2023. 

Spending in 2024: Cost savings and energy efficiency 

Public cloud services are becoming indispensable thanks in large part to the adoption of generative AI. That said, Gartner isn’t expecting generative AI to have a material impact on IT budgets until 2025.

The influence AI can have on productivity is undeniable, but IT leaders need to think carefully before adopting it. For all the hype, many businesses may choose not to invest in generative AI just yet.

“AI presents a great opportunity for business growth and efficiency in 2024. Yet, as with all new technologies, you need to weigh up the energy costs with the business benefits,” says Chris Folkerd, director of core infrastructure at digital transformation specialists ANS. “AI can be more energy intensive than traditional workloads, so it’s important to balance new technologies like AI with your company’s environmental goals.”

Spending in 2024: Sustainable tech as a priority 

Sustainable technology is likely to become a bigger priority for C-suite executives looking to add value across the board in 2024. Joan Daura, partner for transformational projects at digital transformation consultancy Monstarlab, is expecting more IT leaders to recognize the importance of ESG and to start adopting sustainable technologies. 

Monstarlab and FT Longitude recently surveyed 875 business leaders in the US, Japan, Europe and the Middle East. The pair’s research found that among the top 21% of businesses, labeled ‘pioneers’, 87% had reduced their carbon footprint as a result of green digital transformation efforts. Only 25% of the bottom 17% of businesses, labeled ‘procrastinators’, reported a reduction. 

The digital transformation laggards can often lack awareness of the role they can play as technology end users. Subburaj points out that some have a tendency to “absolve themselves” by assuming that sustainability is the responsibility of their hardware vendors or cloud providers. “There is considerable room for improvement in prioritizing energy efficiency at all stages of the technology life cycle.” she says, adding that businesses need to consider adopting both technologies that are designed to operate efficiently and sustainably and technologies that help them to reduce their own direct emissions.

Daura sums up the advantages of sustainable technology: “Companies that position themselves as sustainability leaders are more likely to gain a competitive edge in the market and attract and retain top talent. They also make themselves more appealing to customers who are becoming conscious of the environmental impact of the products and services they purchase.”

Whatever decisions IT leaders make this year, they don’t have to cost the earth. For those on a tight budget, a low-cost approach to digital transformation may even be appropriate.

After a long period of decline, the PC looks primed to return to growth, thanks to the arrival of new AI PC devices optimized for generative AI.

PCs have seen seven consecutive quarters of declining sales, with inflation and a more conservative approach to tech spending among enterprises prompting a marked dip in shipments.

But that could be about to change, according to analysts, with an improved economic environment leading to a surge in sales over the holiday period and beyond into 2024.

Across next year, shipments could hit 267 million units – marking an 8% increase compared to 2023, according to analysis from Canalys. 

While the need to replace aging Windows 10 devices will be a key factor behind this increase, the consultancy said a sharpened focus on the development of new AI PC models by manufacturers will play a pivotal role.

The global PC market is on a recovery path and set to return to 2019 shipment levels by next year, said Canalys analyst Ben Yeh.

"The impact of AI on the PC industry will be profound, with leading players across OEMs, processor manufacturers, and operating system providers focused on delivering new AI-capable models in 2024,” he said.

Canalys predicts that by 2027 over half (60%) of PCs will be ‘AI-capable’. It argues that the boom in generative AI will see PCs undergo a significant transformation in both hardware and software.

Hardware makers are also – unsurprisingly – upbeat about the potential here, with Intel CEO Pat Gelsinger saying earlier this month that the “AI PC will be the star of the show” in 2024.

So, what exactly is an AI PC?

Everything you need to know about the rise of the AI PC

Canalys principal mobility analyst Ishan Dutt said that the AI-capable PC category is still in a nascent stage, but the consultancy defines it as a desktop or notebook possessing a dedicated chipset or block to accelerate AI computing. 

Current examples include Qualcomm’s Hexagon Tenser Accelerator, Apple’s Neural Engine, Intel’s Movidius VPU and AMD’s XDNA, he said.

“This definition will evolve over time as these dedicated chipset features become increasingly commonplace in mainstream processors,” he told ITPro.

Dutt said there will be a move towards a nuanced grading scale that takes into consideration specifications about the neural processing unit – such as number of tera operations per second (TOPS) and other hardware requirements around memory and storage.

Apple has been leading the way with AI integration with its M1 Neural Engine way back in 2020, and since then Qualcomm has added to its ARM-based 8cx Gen3 chipset's AI capabilities, with a 2024 upgrade featuring the Nuvia architecture and Windows Copilot integration according to the analyst.

In the x86 world, AMD introduced its AI offering with the "Phoenix" Ryzen 7040, while Intel is marking its AI move by embedding the Movidius VPU in its Meteor Lake range. But beyond the processors, AI PCs will need additional memory, storage and GPUs, Canalys said.

“For instance, as optimized large language models (LLMs) become pre-installed on PCs, a combination of increased storage capacity with high-speed interfaces becomes essential. Similarly, running these LLMs will necessitate more memory and a robust GPU,” Canalys noted.

While adding generative AI capabilities to PCs could make everyone more efficient, the early adopters are likely to be workers who need to use LLMs to crunch data but are cautious about putting that data into a cloud service, or those that don’t want to deal with the latency that using cloud services can create.

Fellow tech analyst Gartner also expects the PC market to bounce back in 2024, as the business PC market is ready for the next replacement cycle, driven by the Windows 11 upgrades.

Meanwhile, it believes consumer PC demand should also begin to recover as devices purchased during the pandemic start to be replaced too.

With global public cloud spending forecast to skyrocket in 2024, early 2023 warnings over a potential ‘cloud slowdown’ haven’t exactly come to fruition. 

Research from Gartner shows that global end-user spending on public cloud will surge by 20.4% across 2024, reaching a total of $678.8 billion and marking a significant increase compared to the $563.6 billion spent across 2023 so far. 

A combination of factors appears to be driving this increased spending among enterprises globally, not least of all a widespread sharpened focus on generative AI.

Sid Nag, VP analyst at Gartner said that cloud has now become “essentially indispensable” and forms the backbone of modern business operations. 

“Cloud continues to be the disruptor in an organization’s technology and business operational models,” he told ITPro. “However, the role of cloud is shifting rapidly from technology disruptor, to a capability enabler, to an innovation facilitator and, eventually, a business disruptor.”

“So in essence organizations absolutely cannot afford to neglect spending in this area,” Nag added. 

Gartner expects significant growth in all segments of the global cloud market in 2024, with infrastructure as a Service (IaaS) forecast to experience the highest end-user spending boost at 26.%. 

Meanwhile, platform as a service (PaaS) spending is also expected to increase by 21.5%. 

These promising spending growth predictions come in sharp contrast to what we saw at the beginning of 2023. 

In January this year, analysts warned that the cloud market could face a significant dip in revenue due to deteriorating economic conditions. 

However, researchers at the Uptime Institute based their claims on the fact that hyperscalers such as AWS and Microsoft both experienced slower growth toward the end of 2022. 

AWS recorded a 27.5% increase in revenue across the third quarter of 2022, marking a dip compared to the previous period.

And while this did mark the “slowest growth” in the company’s history, the purported slowdown was based around comparisons to the whirlwind highs of the early days of the pandemic in which organizations pivoted to remote operations and embarked on a mass shift to the cloud. 

Deteriorating economic conditions, rising energy costs, and inflation were expected to result in a scaling back of IT and cloud spending among enterprises as they looked to weather a looming storm. 

But spending statistics across 2023 show this hasn’t exactly been the case. 

SaaS spending across the year reached a total of $205 billion, marking an increase on 2022 in which $174 billion was allocated to cloud application service spending. 

IaaS spending also exceeded expectations in 2023, reaching $143 billion compared to just $120.3 billion last year.

Cloud spending hurdles still remain

Nag said that recent Gartner data shows organizations are still investing in cloud and IT to essentially meet future expectations and strike a lead on their competitors. 

“While organizations are being very discerning about their spend, 69% of CFOs are asking their internal organizations to increase spending on their cloud and digital initiatives since they see this as an opportunity to get a leg up on the competition,” he said. 

His comments align with what ITPro was told in January this year by fellow Gartner analyst, John-David Lovelock, who suggested that firms willing to invest during troubling conditions would reap long-term benefits.

Nag noted, however, that the combined issues of “change fatigue” among CIOs and organizational cost reductions are still having an impact on broader IT and cloud spending. 

Many CIOs are becoming more pragmatic on investment in this regard due to stricter spending restrictions at their organizations. 

“Change fatigue among CIOs is most often manifesting as hesitating to engage or lengthening negotiations for new projects and initiatives,” he said. 

“These delays can also be attributed to a new wave of pragmatism, capital restrictions or margin concerns. In extreme cases, organizations are resorting to cost-cutting measures, such as reducing headcount and cutting discretionary spending. 

“Organizations taking a more pragmatic approach are simply shifting the emphasis of ongoing IT projects toward cost control, efficiencies and automation, while curtailing IT initiatives with longer ROIs. The overall effect is to have downward pressure on overall IT spending, particularly new spending."

IT spending across Europe is expected to grow at a record rate in 2024, according to new research from Gartner. 

The consultancy’s latest forecast shows IT spending will reach $1.1 trillion next year, marking a 9.3% increase on a projected total of $1 trillion this year. 

Gartner said the spending increase underlines shifting priorities among businesses during a period of economic uncertainty. 

"Despite a conflated economic situation, IT spending in Europe continues to be recession-proof," said John-David Lovelock, distinguished VP analyst at Gartner.

"CIOs in Europe who pursued the 'growth at all costs' strategy for over a decade are now shifting the emphasis of ongoing IT projects toward cost control, efficiencies and automation, while curtailing IT initiatives with longer ROIs."

Spending on software and IT services are both expected to see the largest increase next year amidst a continued focus on cloud computing. Infrastructure as a service (IaaS), for example, is expected to surge 27% across 2024. 

CIOs in Europe are also shifting their priorities internally, including enhancing cyber security spending. Spending on security and risk management in Europe is projected to reach around $56 billion, marking an increase of 16% compared to 2023. 

A concerted focus among CIOs on artificial intelligence and generative AI is also driving cloud spending, the report noted. 

With AI-related security risks a key concern among enterprises, this AI focus appears to be creating a confluence of spending on both the integration of the technology along with underpinning safeguards. 

"AI has also added a new level of concern around security ensuring that their systems are wrapped before hackers get near their sensitive data," says Lovelock.

Cloud spending goals remain strong

The latest research from Gartner aligns with previous analysis of spending across the broader cloud computing space. 

In a separate forecast this month, the consultancy predicted that end-user spending on public cloud services will surge by 20.4% across 2024, reaching a total of $678.8 billion. 

This marks an increase on 2023 and underlines that businesses are still investing heavily in cloud despite challenging economic conditions. 

IaaS is forecast to experience the highest end-user spending growth in 2024 at 26.6%, followed by platform-as-a-service (PaaS) at 21.5%.

In January 2023, analysts issued a warning that the global cloud computing industry could experience a “slowdown” as firms looked to curtail spending due to economic concerns.  

Despite this, cloud spending has continued steadily across 2023, with some analysts describing spending as ‘recession proof’.  

“Cloud concentration” is now among the top risks identified by organizations and could harm long-term innovation and technology goals, new research has found.

Referring to the practice where an organization is heavily reliant on one particular hyperscale provider, cloud concentration was highlighted as one of the top five emerging risks among IT leaders for the second consecutive quarter, according to Gartner.

The study suggested that overdependence on one hyperscaler could cause severe disruption to operations if an incident - such as a security breach or downtime - were to occur at a provider.

Limited options with regard to technologies as a result of cloud concentration could also harm long-term innovation goals, the study found.

Ran Xu, director of research at Gartner’s legal risk and compliance practice, warned that businesses no longer view cloud concentration as an “emerging” risk, and instead view the prospect of disruption as a leading risk consideration.

“The risk associated with cloud concentration is fast losing its ‘emerging’ status as it is becoming a widely recognized risk for most enterprises,” she said.

“Many organizations are now in a position where they would face severe disruption in the event of a failure of a single provider.”

“Cloud concentration” risks

Growing concerns over cloud concentration have arisen due to a sharpened focus among many businesses to consolidate IT operations and direct efforts toward a “handful of strategic providers”, according to Gartner.

This shift has been part of an effort to reduce complexity across IT estates, the consultancy said, as well as to cut costs and contend with evolving skill requirements.

The issue has been further compounded by the fact that a “handful” of hyperscaler vendors dominate global and regional markets, the study found.

In the UK, for example, concerns over the dominance of hyperscale providers such as Google, AWS, and Microsoft, have prompted a regulatory probe into whether their market shares are harming customers and impacting innovation.

“Where organizations have chosen to go the route of hosting their IT services in public clouds, there aren’t many obvious ways to avoid concentration risk while keeping the benefits of cloud services,” said Xu.

“Moreover, regulations at the country and subnational level diverge on concentration risk, anti-competition, data sovereignty and privacy rules pertaining to cloud services – further complicating the picture.”

Gartner specifically highlighted three potential consequences of cloud concentration, including the prospect of a “wide incident blast radius”.

In this instance, the failure of a particular cloud provider could seriously impact business continuity and result in disastrous consequences such as loss of earnings and reputational damage.

“The more applications (and business processes) depend on a particular cloud provider, the greater the potential breadth of impact of a cloud service issue, which may heighten business continuity concerns,” the consultancy said.

“Concentrated dependency” on a specific vendor could also harm future technology options and long-term innovation, the study warned. This culture of dependency means vendors are able to exert “significant influence” over an organization’s future technology strategy.

Regulatory compliance challenges were also identified as a harmful effect of cloud concentration, according to Gartner. This is because some regulatory bodies may hold different views of the risks associated with concentration of IT infrastructure.

“Organizations may be unable to meet regulatory demands to address concentration risk across different regulatory bodies, which may have different approaches to concentration risk.”

Xu said the research underlines both the importance of having a “well-considered continuity plan” in the event of an IT provider failure, as well as consideration of alternative cloud strategies.

“Currently, if the benefits of public cloud use are considered strategically important to a business, there are not many obvious solutions to remove the risk altogether,” he said.

Businesses are increasingly diversifying their IT estates amidst a shift to multi-cloud and hybrid cloud practices. Research from Google last year pointed to a growing hybrid cloud shift among organizations, with 48% of tech leaders operating under a “mostly hybrid” setup compared to just 40% in 2020. 

A separate survey from Parallels this month also found that nearly two-thirds (64%) of respondents had implemented hybrid cloud practices over the last year.

Generative AI has yet to have a “material impact” on broader IT spending, according to new analysis from Gartner.

The consultancy expects global IT spending to increase by 8% across 2024, reaching a total of $5.1 trillion. This marks a sizable increase on both 2022 and 2023 growth rates, Gartner said.

However, despite a surge in interest and spending on generative AI among businesses globally, Gartner said the technology is yet to prompt any significant increases in the short term.

The consultancy does expect this to change in 2025, however, as more tangible business use-cases and heightened investment in the technology continues to increase.

“In 2023 and 2024, very little IT spending will be tied to generative AI,” according to John-David Lovelock, distinguished VP analyst at Gartner.

While the relative immaturity of generative AI means that firms won’t immediately alter IT budgets to accommodate for the technology, Lovelock noted that many are still investing in broader AI and automation strategies to optimize efficiency.

This sharpened focus on automation is, in part, being driven by a growing interest in generative AI and a belief that early investment in AI and automation will underpin any future generative AI strategies.

“Organizations are continuing to invest in AI and automation to increase operational efficiency and bridge IT talent gaps,” he said.

“The hype around GenAI is supporting this trend, as CIOs recognize that today’s AI projects will be instrumental in developing an AI strategy and story before GenAI becomes part of their IT budgets starting in 2025.”

Interest in generative AI remains high

Since late 2022, businesses globally have been exploring the potential use-cases and operational benefits of generative AI tools, with major industry players such as Microsoft, Google, and Amazon all investing heavily in the technology.

So far this year, the number of organizations using generative AI tools has surged rapidly, according to previous research from Gartner.

A poll of more than 1,400 executives in October found that over half of firms are now using generative AI in pilot schemes (45%) or full production (10%). 

This marks a significant increase compared to March 2023, in which just 15% and 4% respectively were piloting or using the tech in production.

There are warning signs ahead for organizations exploring generative AI, however.

Recent analysis from CCS Insight predicted that generative AI could experience a “cold shower” in 2024 due to the prohibitive costs associated with the technology.  

The cost of training ever-larger models was highlighted as a key financial hurdle for many businesses by CCS Insight. 

Training and implementing generative AI tools is a costly process that even industry heavyweights such as OpenAI have grown concerned about in recent months. 

The Microsoft-backed tech firm recently began exploring the prospect of acquiring an existing semiconductor company to bolster chip supplies and support future growth.  

The number of organizations using generative AI tools has surged rapidly since March this year, with over half now using the technology in pilot schemes or full production.

In a Gartner poll of more than 1,400 executive leaders exploring their business’s approach to generative AI, 45% stated that they are in a piloting phase and 10% have already implemented generative AI systems.

This marks a significant increase compared to a previous poll from the consultancy in Q1, which found just 15% and 4% of firms were involved in pilots or had implemented solutions.

The poll also revealed a change in the main focus for generative AI investment among respondents.

Almost one-third (30%) identified growth goals as the main business justification for generative AI investment, followed closely by cost optimization (26%) and customer experience (24%), compared to March and April when customer experience was the focus for 38%.

Gartner polled 1,419 executive leaders who took part in a September 2023 webinar on the topic of generative AI risk and cost, and found that organizations are moving past the exploratory stage and shifting toward full adoption.

“Organizations are not just talking about generative AI – they’re investing time, money, and resources to move it forward and drive business outcomes,” said Frances Karamouzis, distinguished VP analyst at Gartner. 

“In fact, 55% of organizations reported increasing investment in generative AI since it surged into the public domain 10 months ago. Generative AI is now on CEOs’ and boards’ agendas as they seek to take advantage of the transformative potential of this technology.”

Though over a quarter of respondents still identified cost optimization as their top concern, Karamouzis said that those with a focus on agility and growth can reap greater benefits from generative AI.

“Many organizations began their AI journey with an overemphasis on cost optimization and efficiency,” said Karamouzis. 

“Savvy companies have moved beyond this to focus initiatives on efficacy, quantifiable value, and business agility in products and services. This ensures visibility, trust, and synergy among stakeholders, and most importantly, alignment to business outcomes.”

Generative AI hype

Generative AI has dominated headlines in the tech sector for a year, as consumer and business interest in tools such as ChatGPT skyrocketed. Some have questioned whether the sector is experiencing a generative AI bubble, and pointed to the technology’s inherent risks.

Another Gartner report from September found that many firms are complementing generative AI investment with application security solutions to mitigate potential risks such as data leaks. 

More than half(57%) of IT and information security leaders polled by Gartner identified incorrect outputs and model bias as points for particular concern.

In spite of this, the new poll found 78% of respondents believed the benefits of generative AI are greater than its risks, a rise from 68% in the poll conducted in March and April.

Gartner stressed that the poll is not a weighted representation of the market or global picture.

Organizations need to embed new strategies for AI trust, transparency, and security by 2026 in order to take advantage of the technology’s full business benefits, according to research by Gartner.

The research organization found that firms that operationalize AI trust, risk, and security management (TRiSM) could reap up to a 50% advantage when it comes to AI adoption, meeting their business goals with the technology, and user satisfaction.

TRiSM is a broad term applying to a suite of strategies and technologies, including those that help to keep generative AI models explainable and performing as intended, as well as security applications to protect AI systems from external threats.

CISOs that work to increase the speed of their AI model-to-production, or who enable better governance and rationalize their firm’s AI model portfolio could eliminate up to 80% of faulty and illegitimate information across the same period.

Gartner also urged CISOs to view AI as its own application, necessitating new strategies and complementary technologies outside of their normal workflow.

This will involve maintaining oversight of all AI solutions within their stack, identifying the transparency and explainability necessitated by each, and integrating risk management solutions at the source of AI operations.

“It calls for education and cross-team collaboration,” said Jeremy D’Hoinne, VP analyst at Gartner. 

“CISOs must have a clear understanding of their AI responsibilities within the broader dedicated AI teams, which can include staff from the legal, compliance, and IT and data analytics teams.”

Workforce training on the risks posed by AI, as well as ethical AI use, could become an indispensable part of the CISO’s toolbox in the coming years.

More than a third of businesses investing in generative AI are also investing in AI application security tools, driven by fears that AI could leak data or produce unsafe results. For example, irregular or incorrect outputs are a major concern for businesses seeking to expose their AI models to their customers.

A recent study found OpenAI’s generative AI chatbot ChatGPT produced incorrect answers to programming questions 52% of the time. Researchers also noted that because users tend to prefer the language style of ChatGPT’s answers, mistakes were often overlooked.

User-preferred answers were found to be 77% incorrect on the whole, and 17% of users still marked ChatGPT answers as correct.

Stronger protections against data leaks, such as privacy-enhancing technologies (PETs), are included in this wave of investment, to ensure that proprietary data or personally identifiable customer information is not exposed through errors in a generative AI system.

Measures to prevent threat actors from gaining malicious access to AI models are also front of mind for many IT teams, and some have suggested that stronger machine identity controls linked to a ‘kill switch’ for such systems would help prevent an organization’s AI from being weaponized by hackers.

Over a third (34%) of organizations adopting generative AI are also investing in AI application security solutions to mitigate known risks such as data leaks.

A new report from Gartner found that in addition to application security solutions, greater investments into privacy-enhancing technologies (PETs), AI model operationalization (ModelOps), and model monitoring are being planned.

Despite enthusiasm for generative AI among business leaders, many felt the need for backup options to prevent inaccurate and harmful outputs and the potential for their proprietary information to be leaked through public AI services.

Among those surveyed, 57% of respondents were particularly concerned about leaked sensitive data in AI-generated code, versus 58% who were most concerned about incorrect outputs or models showing bias.

Avivah Litan, distinguished VP analyst at Gartner, told ITPro that organizations were very worried about the risks of poor data privacy when it comes to generative AI, and that public AI options such Azure OpenAI ask for a degree of trust that some IT leaders find difficult to provide.

“That’s what they’re really worried about: how can we trust OpenAI or Google, or any of them, Microsoft, with our data? Even if they say that they're not sharing it, they're not using or training our data for improving their model, no one will take any liability if we're compromised.

“Number one, the users have to trust without the ability to verify. Number two, it's not a new issue. This has been around as long as SaaS and cloud applications have been around, but it seems to be heightened because LLMs are already a black box and no one knows what's going on inside the model. So people just get more paranoid.”

Litan suggested that organizations could run on-premise AI models if they wanted to be certain that their data was not being stored, used to train other models, or leaked.

“The only thing that'll stop your data from getting breached in a third-party environment is don't use the third-party environment,” she said.

“Use your own model, download an open-source model, and host it yourself. But most companies don't have the resources for that.”

ModelOps is a governance method similar to DevOps through which firms automate the oversight of machine learning (ML) or AI models, to measure the effectiveness at which they are operating and whether they conform to safety expectations.

PETs protect data from being exposed while in use through encryption and can be used to train third-party generative AI models on data without unnecessarily exposing it. In the same manner, PETs can be used to encrypt AI or ML models to prevent threat actors from backwards-engineering them to reveal the sensitive data on which they were trained.

Apple made headlines in May when it banned its employees from using ChatGPT or GitHub Copilot over fears that employees could hand OpenAI sensitive data such as source code. Samsung workers accidentally leaked source code via ChatGPT, prompting the firm to issue an internal warning against the use of third-party AI in April.

Gartner’s survey, which ran 1-7 April 2023 and analyzed responses from 150 IT and information security leaders, also revealed an inconsistent view of where responsibility for AI systems rests within organizations.

Almost all (93%) IT and security respondents stated that they have a part to play in managing the risk of generative AI, but only 24% stated that they wholly own this responsibility.

Just under half (44%) of those who stated that they do not own this responsibility identified IT as the department that is responsible for overseeing this risk management, while 20% pointed instead to the governance, risk, and compliance department within their organization.

Enterprises are expected to require increased understanding and oversight of generative AI tools among software engineering leaders in the coming years, according to research from Gartner. 

By 2025, the consultancy predicts that “more than half” of all software engineering leader role descriptions will include explicit requirements for oversight of generative AI as firms increase their use of the burgeoning technology. 

Gartner said the study highlights both the increased adoption of tools among enterprises as well as the evolving requirements of senior practitioners in effectively harnessing generative AI to deliver value. 

Haritha Khandabattu, senior director analyst at Gartner, noted that the emergence of generative AI will have a profound effect on future managerial role requirements. 

“Outside of generative AI’s impact on technology implementation, it also changes the managerial responsibilities of software engineering leaders,” he said. 

In the long term, the consultancy said firms will expect software engineering leaders to consider a range of variables when deploying and effectively harnessing generative AI. 

This includes more finely curated team management based on relevant skills, as well as an innate understanding of the ethical considerations of using generative AI tools. 

Gartner said that software engineering leaders (SWELs) “should be cautious” when using generative AI technology, and suggested that senior practitioners should become more deeply involved in developing and fine-tuning ethical guidelines at their respective firms. 

“SWELs must work with, or form, an AI ethics committee to create policy guidelines that help teams responsibly use generative AI tools for design and development,” Gartner said. 

“SWELs play a key role in identifying and helping to mitigate the ethical risks of any generative AI products that are developed in-house or purchased from third-party vendors.”

With an increase in businesses considering the adoption of generative AI, Gartner said software engineering leaders will be forced to showcase the value proposition of tools to senior executives too.

This will require senior practitioners to “build a compelling business case for ongoing investment in their teams” and will necessitate more up-front and candid communication with teams over the potential implications of adoption. 

With this in mind, leaders must be “transparent with their teams” and focus conversations on how generative AI will enhance developer productivity, rather than how it could potentially replace staff or render positions obsolete.

“Generative AI will not replace developers in the near future,” said Khandabattu. “While it has the ability to automate certain aspects of software engineering, it cannot replicate the creativity, critical thinking, and problem-solving abilities that humans possess.

“Leaders should reinforce the value of their teams by demonstrating how generative AI is a force multiplier that can enhance efficiency.”

Long-term, Khandabattu warned that leaders who fail to adapt to these changing requirements could find themselves losing out on senior positions.

“Software engineering leaders will find themselves at a significant disadvantage if they do not recognize and adapt to these changes – facing the risk of being replaced by those who embrace this disruptive technology.”

Jobseekers are becoming increasingly picky with seeking opportunities and demanding greater benefits and incentives from employers, according to new research from Gartner. 

The consultancy’s latest HR survey found that half of candidates who accepted jobs over the last 12 months have backed out prior to starting, with respondents stating that their prospective employer did not match their expectations.

According to the survey, over one-third (35%) of respondents said they had received “four or more” offers during their most recent job search. 

Similarly, nearly half (46%) said they still remained open to offers after accepting a position, believing they could secure a better role if they extended their search. 

Applicants backed out of job offers for a range of reasons, Gartner found – 59% said they specifically accepted a role due to flexibility benefits while others valued roles that provided better work-life balance and higher compensation. 

Firms that failed to meet these requirements often found themselves losing out on talent, despite them having accepted a role. 

Jamie Kohn, senior director in the Gartner HR practice said this highlights the changing demands being placed on firms by prospective employees and warned that some could miss out on vital talent if they fail to provide such incentives.

“Nearly 90% of candidates said they have exited a hiring process due to at least one mismatch in employee value proposition (EVP) preferences,” he said. 

“This includes compensation and benefits, but also things like flexibility in working hours, career pathing, skills development, team diversity, and management style.”

This changing dynamic with regard to employee requirements is exacerbating the increasingly competitive talent landscape that organizations must now contend with, Kohn said. 

A separate survey conducted by Gartner in December 2022 showed that 86% of CIOs reported heightened competition for talent and qualified candidates – a trend that is expected to continue. 

“Competition for talent remains steep – our research shows 59% of HR leaders expect more talent competition in the next three months,” he said. “We are seeing many candidates uncommitted to their new employer and keeping one foot in the job market.”

What employees want

Transparency in hiring processes was highlighted as a key stumbling block for candidates, with 68% of respondents stating they want to see concrete salary information in job postings. 

Nearly two-thirds (64%) revealed they are more likely to apply for a job that lists compensation in the job description while 44% said they refused to apply for a role because the employer failed to meet this requirement. 

Remote, hybrid, and flexible work options were also a key factor in a candidate's decision to apply for – and accept – a role at a company.  

Gartner said that 75% of candidates who can work remotely prefer to do so more than 50% of the time, and this is becoming a key stipulation in applications. 

A Gartner survey in May this year found that nearly half of employees seeking new job opportunities were actively doing so because of a desire for greater flexibility. 

“When it comes to pay transparency and return to office mandates, organizations can either enhance or impede their talent attraction efforts based on the decisions they make,” said Kohn.

Chips specially made for AI work will generate $53.4 billion in revenue in 2023, according to new research from Gartner.

The 20.9% growth in revenue compared to 2022 is reflective of a rapidly-expanding market led by some of the largest hardware companies in the world, including Nvidia and Intel.

According to Gartner’s projections, AI chip revenue will grow a further 25.6% in 2024 to $67.1 billion, and top $119.4 billion by 2027.

While publicly-accessible generative AI models such as ChatGPT have captured the attention of consumers, enterprises have sought more specialized hardware to meet their specific use cases efficiently and at as low a cost as possible.

“The developments in generative AI and the increasing use of a wide range of AI-based applications in data centers, edge infrastructure, and endpoint devices require the deployment of high-performance graphics processing units (GPUs) and optimized semiconductor devices. This is driving the production and deployment of AI chips,” said Alan Priestley, VP analyst at Gartner.

“For many organizations, large-scale deployments of custom AI chips will replace the current predominant chip architecture – discrete GPUs – for a wide range of AI-based workloads, especially those based on generative AI techniques,” he added.

The state of AI hardware

Big tech has flocked to Nvidia, as the firm boasts some of the most powerful dedicated AI hardware on the market as well as a range of cloud architectures tailored for AI models. 

The firm recently announced its next-generation GH200 Grace Hopper chip, which can be doubled up to form a supercomputer configuration called the DGX GH200. Nvidia says this will tackle future AI problems such as trillion-parameter large language models (LLMs).

VMware announced a new partnership with Nvidia at its VMware Explore conference on 22 August. The firms will collaborate on VMware Private AI Foundation from 2024, to help customers train private AI models on the cloud.

To make this possible, Nvidia has allocated special AI hardware to around 100 servers in partnership with Dell, Lenovo, and Hewlett Packard Enterprise (HPE), packed with systems to accelerate LLM training. 

The backbone of these servers is new Nvidia hardware such as the L40S GPU, which the company claimed will train LLMs 1.7x faster than its A100 chip. The A100 was used to train the base model for ChatGPT, GPT-3.5.

Chip powerhouse Intel is also keen to carve out its share of the AI market and has publicly committed to AI dominance by 2025.

The firm laid out a roadmap for AI chips in March 2023, encompassing its central processing units (CPUs), GPUs, and dedicated AI architecture. 

This includes the Gaudi 2 processor, which Intel claimed can run deep learning inference workloads twice as fast as the competition, and next-gen Xeon CPUs like ‘Sappire Rapids’ which boasts a ten-times performance boost on previous CPU generations.

In all, Intel aims to release 15 field programmable gate arrays (FGPAs), chips that can be heavily customized for enterprise AI inference, in 2023.

Google has also thrown its hat into the ring with its tensor processing unit (TPU) AI chips, comparable in performance to Nvidia’s L40S. The firm claims these are greener than those sold by its competitors, with the TPU using on average 1.3-1.9 times less energy than Nvidia’s A100.

Google used TPUs in a supercomputer cluster to train its own LLMs, PaLM and PaLM 2.

While overall spend on AI has increased, Gartner research from July found that to date AI has not had a significant impact on IT spending. The 4.3% rise in IT spending expected across the year was mainly driven by software and IT services, according to the report.

Gartner distinguished VP analyst John-David Lovelock told ITPro that AI will likely be added to software without a price increase and that AI spending will be hard to track at the end-user level, as AI will use all forms of technology as a channel to market.

IT spending around the world will total $4.7 trillion in 2023, driven by a surge in software spending, according to a new forecast by Gartner.

The new spending represents 4.3% increase year-on-year and has been driven largely by software and IT services.

The report projects that worldwide IT spending could grow as much as 8.8% in 2024, to a total of $5.1 trillion.

Gartner found that at present, AI has not had a large impact on IT spending and that in the future organizations are likely to implement it using existing budgets.

For example, Google Duet AI and Microsoft Copilot are being added to product suites that are free or already factored into budgets, while other businesses will gain AI capabilities as part of contracts with their enterprise software providers.

“A great deal of software out there will get AI without a price increase, so at no cost to the end-user,” John-David Lovelock, distinguished VP analyst at Gartner told ITPro.

Lovelock argued that AI is impossible to track due to the fact that it is both a technology and an approach, with the example of chatbots and image generators as two AI tools operating in completely different markets.

“AI and generative AI is unique, in that it can use every form of technology as a channel to market,” he said.

“It'll be part of printers, it'll be part of mobile phones, it’ll be part of your software, it’ll will be part of your telecom services, your security services. Even your consulting services and outsourcing services will either use AI to deliver a better product to their end users, or they will add AI to the product feature mix for their end users.”

Lovelock also predicted that companies such as Accenture, Deloitte, PwC, and Ernst and Young will start using artificial intelligence for better product delivery, scale, and reduce costs without adding more staff.

‘Higher-level’ strategy shift

Lovelock has previously stated that IT spending is “recession-proof” and that companies that failed to increase IT spending could lose out. 

He told ITPro that this trend had continued, with some laggard companies focused on margin and cost control while others had shifted their exterior revenue-growth focus to making improvements to internal processes.

“In a sense, there is a higher-level change, where corporations coming out of 2022 into 2023 were primarily focused on revenue growth,” he told ITPro.

“Starting in maybe the end of 2022, beginning of 2023, they started to put into those digital transformation projects more work into efficiencies on the interior, on how they can make their departments more effective so that they can get to the new revenue stream?”

This drive for internal efficiencies has coincided with increased interest in infrastructure software, and Lovelock said that Gartner has seen “really strong growth” in robotic process automation (RPA).

Addressing job losses to AI, Lovelock acknowledged that it is a “tricky” issue, but maintained that it would ultimately come down to the business decisions of employers and whether they wanted to merely maintain productivity or improve it.

“For every job, there is a percentage of the time that is toil and a percentage of time that is value added. If you use AI to completely take away the toil, you wouldn’t get rid of the person because they’re adding value.

“In fact, you may start adding more people because the value that you used to get from one employee has gone up because they're no longer doing toil. So if you reduce their toil by four hours a day, now you're getting eight hours per day of value rather than four and that changes the cost equation for that role.”

The devices segment continues to decline, in line with another recent piece of research by IDC, down 8.6% in 2023 to $700 billion.

Lovelock cited mobile phones as an example, the sales of which are not expected to return to pre-pandemic levels until 2025. Gartner findings indicate that following this brief recovery, the devices will return to “close to zero percent growth” by 2027.

CIOs are contending with significant “roadblocks” in IT hiring despite an appetite to expand headcounts in the year ahead, according to new research.

81% of CIOs plan to increase their IT headcount in 2023, according to Gartner. However, this optimistic outlook and prospective hiring spree could be scuppered by growing economic volatility.

Nearly half (41%) of CIOs at large enterprises reported “slow hiring” for IT roles amid talent shortages, while 35% revealed they were contending with a decreasing overall IT budget that is inhibiting their ability to attract talent. 

Similarly, nearly one-third (29%) said they are forced to work around an IT hiring freeze due to budgetary constraints.

These challenging conditions mean that IT leaders are being forced to explore new ways of both attracting and retaining talent in the coming months, according to Jose Ramirez, senior principal analyst at Gartner.

This includes opening up opportunities to IT workers from further afield and the relaxation of role requirements to attract staff. 

“CIOs are taking proactive steps to combat economic volatility by relaxing geographic and role requirements to expand their IT talent pipeline,” he said. 

“Some organizations have found success by hiring early-career technologists and providing upskilling opportunities to fill critical technology needs.”

CIOs are using upskilling to mitigate talent shortages

A key approach currently employed by CIOs includes upskilling and reskilling of workers to fill IT talent pipeline gaps, Gartner said. 

Nearly half of IT leaders surveyed by the consultancy revealed they plan to invest in training programmes for IT staff to ensure teams have the relevant “roles, skills, and capacity” to meet current and future enterprise objectives. 

Around 46% of CIOs said they also plan to establish “fusion teams” to compensate for broader talent shortages across the enterprise. 

These multidisciplinary teams are a mixture of workers that combine technology or analytics and business domain expertise to drive innovation that takes into account the differing goals and requirements of each segment of a business.

“Recruiting the right IT expertise takes time and planning, especially for skills in architecture, cyber security, cloud computing and agile software development,” said Ramirez. 

“Ensure that IT has relevant roles, skills and capacity to meet enterprise objectives. This may require embracing a blended workforce model of IT and business domain roles.”

The necessity for digital transformation  is, in part, a key driver of the need for skilled IT staff.

Ramirez noted that more than two-thirds (67%) of CIOs plan to grow their IT headcount this year “by at least 10%” to support digital initiatives. 

However, with IT teams faced with difficult budgetary conditions, previous research from Gartner shows that many CIOs are now faced with a choice of doubling down on spending or taking a more conservative approach to investment. 

Earlier this year, analysts suggested that some IT leaders will continue to invest heavily and view economic challenges as an opportunity to accelerate digital initiatives and differentiate themselves from competitors. 

Revenue in the global semiconductor industry is set to plummet by more than 11% over the next year as waning business demand for hardware impacts manufacturers. 

An analysis from Gartner this week projected an 11.2% decline in revenue to around $532 billion, marking a significant decrease from a market total of $599.6 billion in the year prior.

A key factor in the predicted revenue contraction is the consistent decrease in demand witnessed across the PC, tablet, and smartphone semiconductor markets, which Gartner warned is ‘stagnating’. 

Tightened budgets at businesses worldwide mean that semiconductor manufacturers will be faced with an increasingly competitive and strained marketplace. 

These combined markets will account for around 31% of all semiconductor revenue in 2023, totalling $167.6 billion. 

“As economic headwinds persist, weak end-market electronics demand is spreading from consumers to businesses, creating an uncertain investment environment,” said Richard Gordon, practice VP at Gartner. 

Gordon added that a rampant oversupply of semiconductors will also have a significant impact on the market. 

This saturation of chips is “elevating inventories and reducing chip prices” across the board, which in turn will accelerate the decline of the market across 2023. 

Tough conditions for hardware demand

Demand for IT hardware has been consistently decreasing in recent months due to deteriorating economic conditions. 

Research from Gartner in January revealed that global PC shipments declined to record levels in the final quarter of 2022, dipping to 65.3 million and representing an overall decline of 28.5%. 

Budgetary constraints among global businesses, combined with a growing trend of firms delaying purchases and extending lifecycles were all highlighted as key contributing factors, Gartner said at the time. 

This trend has continued into early 2023, analysis shows. Earlier this month, IDC revealed that global PC shipments dipped by nearly one-third in the first quarter of 2023, highlighting this continued decline. 

The research from IDC showed that total shipments of PCs declined 29% in Q1 to 56.9 million units. IDC said that weak demand, excess inventory, and a “worsening macroeconomic climate” were responsible for the drop in shipments.

Global PC shipments have declined to record levels, according to new figures based on last quarter's results.

The total number of shipments in the fourth quarter of 2022 was 65.3 million, according to Gartner, 28.5% decline which the company said was the biggest quarterly shipment decline it has recorded since it started tracking the PC market in the mid-1990s.

For the year of 2022, Gartner recorded a total of 286.2 million PC shipments, which again was a decrease from the previous year to the tune of 16.2%.

Gartner also found that in the first half of 2022, higher PC inventory levels started to build up, which resulted in a bottleneck for the market. Throughout 2021, there was a low PC supply caused by high demand and supply chain disruptions. However, this turned into an excess of supply once demand slowed.

“The anticipation of a global recession, increased inflation, and higher interest rates have had a major impact on PC demand,” said Mikako Kitagawa, director analyst at Gartner.

“Since many consumers already have relatively new PCs that were purchased during the pandemic, a lack of affordability is superseding any motivation to buy, causing consumer PC demand to drop to its lowest level in years.

“The enterprise PC market is also being impacted by a slowing economy,” she added. “PC demand among enterprises began declining in the third quarter of 2022, but the market has now shifted from softness to deterioration. Enterprise buyers are extending PC lifecycles and delaying purchases, meaning the business market will likely not return to growth until 2024.”

Total PC shipments in 2022 reached around 286 million units. Kitagawa said this was close to pre-COVID levels, with shipments in 2019 coming to well below 300 million units. She predicted that the market has begun a downward trend which is set to continue until the start of 2024.

Vendor comparison

The top three vendors in the global PC market stayed the same in the fourth quarter of 2022. Lenovo retained the number one spot with 15.6 million shipments, followed by HP with 13.2 million, and then Dell with 10.8 million shipments.

The gap in the market then widened, as these three companies were followed by Apple with 7 million shipments, Asus with 4.8 million, and Acer with 3.5 million shipments.

However, while Lenovo had a 24% market share, it suffered its steepest growth decline (-28.6%) since Gartner began tracking the PC market. Its shipments decreased in all global regions except in Japan, with a 30% decline in EMEA and Latin America.

HP and Dell were also hit with steep declines. The former experienced a 44% year-over-year decrease in the EMEA market. Dell also experienced weak demand in the large business market which affected its shipments in the second part of 2022.

The majority (86%) of business leaders plan to increase their organisation's investment in sustainability initiatives as a way to protect against disruption, according to new research.

Most leaders (87%) whose companies are already engaged in sustainability initiatives expect to expand these in 2023 and 2024, linking the investments made so far to improvements in company operations, as well as to supply chain savings.

Respondents identified that a number of costs related to operations can be mitigated through sustainability investments, with energy consumption named by 65% of those surveyed, and business travel by 42%. Other costs that were mentioned include customer transactions (40%) and productivity (33%).

83% of respondents also said that such investments have created value in both the short and long term for their organisation, with costs outweighed by immediate efficiency improvements and the promise of a more stable future for their company.

“Sustainability enables businesses to cope with disruption,” said Kristin Moyer, distinguished VP analyst at Gartner.

“Economic uncertainty, geopolitical conflict and escalating materials and energy costs are forcing businesses to re-examine all forms of expenditure. This focus on essentialism, in combination with increasing stakeholder desire to see progress on environmental, social and governance (ESG) goals, creates new opportunities for organisations to grow while mitigating cost and risk.”

With firms facing rising energy bills driven in large part by the invasion of Ukraine, further Gartner research has predicted that data centre costs could increase by 40% in the immediate future.

Investment in software sustainability, as well as more efficient hardware, will be critical in handling these costs, while simultaneously reducing energy impact that will worsen the climate crisis, the analyst house concluded.

The survey was conducted by Gartner across the APAC, North American, and European regions in June and July 2022, reaching 221 respondents in executive roles at companies with annual revenue of $250 million or more.

Although a range of financial benefits stemmed from sustainability programmes, the report also made clear that business leaders see customers as the primary driving force behind greater investment in this area. Customers were identified as the group building pressure behind sustainability by the majority of respondents (80%), compared to investors (60%), and regulators (55%).

57% positively linked enterprise-wide sustainability programmes with their income results, although only 42% indicated that they are currently using said programmes to drive innovation or growth. However, with the trend of greater investment illustrated in the results of the survey, it is clear that sustainability is seen as a rewarding opportunity.

“On one hand, the returns on investments in sustainability remain unclear in the short term as people experiment and venture - there will be winners and losers,” said Joseph Tabita, SVP of energy and commodities lead at digital transformation consultancy Publicis Sapient.

“On the other hand, it will be the biggest long-term return ever seen when we think about future generations and future relevance of today’s businesses. Reasons to invest are plentiful - providing new revenue streams, accelerating innovation, new forms of customer engagement and providing a glide path away from business models that will be less relevant in the future - for example, Big Oil companies transforming into Energy companies, or countries like Saudi Arabia retooling for a post-fossil fuel world.

“The voice of the customer is a powerful incentive to companies to change, but we also need more pressure and regulation from governments and investors to make sustainable business decisions. The takeaway of the last few COPs is that more is still needed from all participants to accelerate this transformation.”

Because the survey only contacted companies which are currently engaged in sustainability programmes, the results may not be representative of industry-wide investment trends. No statistics are provided, for example, on the number of companies not currently invested in sustainability but who plan to in the coming years.

It follows on from a similar survey conducted by Gartner, which revealed that sustainability is the key strategic technology trend for 2023, as identified by investors. Environmental, social, and governance (ESF) expectations continue to push companies to spend on sustainability schemes, and government regulations in the public sphere have been joined by the growing availability of sustainable technology in the private sphere to ease the transition for companies.

Green growth is seen as a key area of potential among IT decision-makers, and beyond cost savings sustainable technology can be leveraged to improve services for businesses and customers like, across the sector.

Gartner Peer Insights is a free peer review and ratings platform designed for enterprise software and services decision makers. Reviews go through a strict validation and moderation process in an effort to ensure they are authentic.

The “Voice of the Customer” is a document that synthesizes Gartner Peer Insights’ reviews into insights for IT decision makers. This aggregated peer perspective, along with the individual detailed reviews, is complementary to Gartner expert research and can play a key role in your buying process, as it focuses on direct peer experiences of implementing and operating a solution.

In this document, only vendors with 20 or more eligible published reviews during the specified 18-month submission period are included. Reviews from end users of companies with less than $50M in revenue are excluded from this methodology.

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Leading business executives have grown more fearful of a looming macroeconomic downturn in 2022, more so than ransomware attacks or the effects of the Russian invasion of Ukraine.

Data released by Gartner this week for Q2 2022 showed that ransomware has slipped to the third-most feared emerging risk to businesses, overtaken by economic uncertainty after it took the top spot in Q1.

The potential economic downturn jumped from fifth to first between Q1 and Q2 of 2022, Gartner’s Emerging Risk Reports showed.

The top five emerging risks to business - Q2 2022:

1. Macroeconomic downturn
2. Escalation of conflict in Europe
3. State-sponsored cyber attacks
4. Energy price inflation
5. Key material shortages

“The top five risks reported by respondents were notable both for their interconnectedness and origination outside of the organisation,” said Chris Matlock, vice president at the Gartner legal, risk and compliance practice.

“While interconnected, many of the top risks send conflicting signals on the state of the economy, which makes the role of emerging risk management (ERM) leaders especially crucial in filtering the most relevant, organisation-specific information up to the c-suite and board.”

Gartner said it was ‘notable’ that all of the top five risks were external factors – outside the direct control of a business – and the impact of each would be felt differently depending on the industry and location of the business.

The leading risk, macroeconomic downturn, was described by Gartner as a high-impact factor on businesses, the full effects of which are expected to be felt over the next two years.

A shortage in key materials will also be a high-impact factor that affects businesses within a year, it said. Many technology companies are already reeling from supply chain issues, chiefly from the semiconductor shortage.

State-sponsored cyber attacks are considered high-impact for businesses, too, with Gartner predicting the fullest effects of the threat to be felt between one and two years in the future.

The most-feared risks are likely to be long-term influencers on business decisions, the analysts said. There is no apparent date by which the conflict in Ukraine will end, nor is there one for the associated sanctions placed on Russia by global nations.

Businesses are advised to continually reassess their macroeconomic outlook and regularly conduct both top-down and bottom-down risk assessments, balancing the findings from each.

They are also advised to embrace the risks presented to their industry and use them as an opportunity for understanding that could eventually propel a company ahead of competitors.

On 31 December 2020, the UK’s Brexit transition period came to a close, taking us firmly out of the EU. Many issues have been raised over the flow of goods between Britain and its former partners, but the flow of data is a different matter altogether. Data has become an intrinsic part of modern business and with previous rules on international data transfers now at risk of irrelevancy, many organisations are considering how they can adjust their data practices to avoid falling foul of regulators.

With many elements of international data law still up in the air pending various legal cases and policy decisions, we’re joined by Bart Willemsen, VP at Gartner specialising in privacy, to discuss the current regulatory environment and how businesses can prepare themselves for any changes that might be on the way.

Footnotes

• GDPR and Brexit: How will one affect the other?
• Brexit could cost UK firms £1.6bn if data-sharing agreement isn’t reached
• UK data laws after Brexit: Your questions answered
• Facebook will move UK users' data to the US post-Brexit
• The IT Pro Podcast: Cyber security post-Brexit
• EU fires warning shot to UK over post-Brexit US data-sharing
• UK's post-Brexit data deals 'will go further than EU ever could'
• Your guide to overcoming Brexit's data management challenges
• CMA seeks to fill post-Brexit regulatory void as it eyes big tech
• Border force reliant on 26-year-old tech due to digital upgrade delay
• What is EU-US Privacy Shield?

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Gartner has predicted worldwide security spending will increase by eight percent in 2018, to reach a value of $96 billion (71.72 billion) by the end of the year because of regulatory change, mindset and a growing awareness of threats.

The research firm expects spending on Identity Access Management to increase the most, with gains of 9.7% between 2017 and 2018, while security services are expected to increase by eight percent. Other growth opportunities include Infrastructure Protection with a 7.15% year-on-year increase, Network Security Equipment (6.29%) and Consumer Security Software (2.29%).

"Overall, a large portion of security spending is driven by an organisation's reaction toward security breaches as more high profile cyber attacks and data breaches affect organisations worldwide," said Ruggero Contu, research director at Gartner.

"Cyber attacks such as WannaCry and NotPetya, and most recently the Equifax breach, have a direct effect on security spend, because these types of attacks last up to three years."

New regulations including the GDPR in Europe, plus Health Insurance Portability and Accountability Act, National Institute of Standards and Technology in the US and China'a Cybersecurity Law mean businesses are encouraged to invest more in their security tech.

Gartner thinks up to 60% of businesses will use multiple security tools such as data loss prevention, encryption and data-centric audit and protection tools to keep on top of incoming regulations by 2018 - compared to just 35% at the moment.

Businesses are also more open to outsourcing security services because they don't have the in-house skills to deal with changing legislation.

"Skill sets are scarce and therefore remain at a premium, leading organisations to seek external help from security consultants, managed security service providers and outsourcers," Contu added. "In 2018, spending on security outsourcing services will total $18.5 billion, an 11 percent increase from 2017.

"This increased focus on detection and response to security incidents has enabled technologies such as endpoint detection and response, and user entity and behaviour analytics to disrupt traditional markets such as endpoint protection platforms and SIEM," Contu added.

Samsung saw increasing demand for 4G smartphones in the three months to June, but supply shortages of some critical components are likely to drive premium smartphone sales down later this year, according to research by Gartner.

Global smartphone sales rose to more than 366 million units in Q2 of 2017, a 6.7% increase over the same quarter in 2016. The rise helped some mobile phone makers to bolster their market shares, including leader Samsung, which now has 22.5% of the market.Its sales grew 7.5% year-on-year to sell 82.5 million handsets following three consecutive quarterly declines due tofallout from the Note 7.

However, while sales of all types of smartphone were up during the year, growing concerns about the rising cost of components and supply shortages for some critical hardware pointed to a fall in growth during the second half of 2017.

"We expect a shortage of flash memory and OLED displays will affect premium smartphone supply in the second half of 2017," said Anshul Gupta, research director at Gartner.

He pointed to brands such as Huawei, which has already suffered from a shortage in flash memory for its mobile range, and traditional brands such as HTC, LG and Sony that are "stuck between aggressive Chinese brands and the dominating market shares of Samsung and Apple".

Apple is not immune to supply issues, particularly when it comes to sourcing OLED screens for its upcoming iPhone 8. The world's most valuable brand has been reliant on Samsung for premium display technology, but the South Korean tech giant has been unable to produce enough for both brands, according to various reports.

The tech giant saw sales stagnate, dropping 0.2% year over year to sell 44.3 million handsets. However it has yet to benefit from the significant sales spike that the iPhone 8 will bring in the last quarter of 2017. Sales are also likely to be bolstered by the release of iOS 11, which promises to bring augmented reality, improved Siri support and machine learning to Apple devices.

"Apple's sales in emerging markets are expected to grow as older-generation iPhones continue to attract buyers," said Gupta. "The new iOS 11, which will include augmented reality, machine learning, an improved Siri and a new display design, will likely fuel strong iPhone sales in the fourth quarter of 2017, and help Apple increase its sales in 2017."

Picture: IT Pro

Dark data has become something of a theme among IT professionals in recent years, seemingly offering the ability to upgrade the way data is collected, handled, and stored within large organisations and improving operations as a result.

As companies move more of their data to the cloud – or, more accurately, to managed data centers and on premise storage – the ability and willingness to gain insights into almost everything via that data grows, and becomes attractive as a strategy to maximise business advantages over competitors, and improve operations.

What is dark data?

Gartner defines data data as "the information assets organizations collect, process, and store during regular business activities, but generally fail to use for other purposes (for example, analytics, business relationships and direct monetizing)".

"Similar to dark matter in physics, dark data often comprises most organizations’ universe of information assets. Thus, organizations often retain dark data for compliance purposes only. Storing and securing data typically incurs more expense (and sometimes greater risk) than value."

We put this definition to David Hand, an emeritus professor of mathematics and senior research investigator at Imperial College London, author of Dark Data: Why What You Don’t Know Matters. Although he submits the definition is correct to a degree, he argues that "it’s very narrow and completely misses the most important types of dark data".

He argues that the phenomenon is better defined as "data you don’t have", which "may be data you wish you had, or hoped to have, or thought you had, but it is nonetheless data you don’t have". So rather than just data that has been collected, dark data can be applied much more broadly.

Instead of a narrow definition, Hand suggests there are 15 kinds of dark data (although there is some overlap between them), including data we know is missing, data we don’t know is missing, choosing just some cases, self-selection, missing variables, data which might have been, and measurement error and uncertainty.

Hand says Gartner’s definition is the third example, 'choosing just some cases', or "data which has been collected but which is then being ignored". In some senses, this type of data is one of the easiest to deal with as it exists.

Where is dark data?

According to estimates from Veritas, almost half of the information stored on the secondary data stores used for migration to the cloud is dark; unlabelled data that could potentially land the organisation in hot water with government regulators.

But that’s only if the data has actually been collected in the first place. "You may know you have not collected it, or you may not know," says Hand. "A familiar example of the first would be missing values in a data table and a familiar example of the second would be missing responses in web surveys, where you may not have a well-defined population so you don’t even know who hasn’t replied."

In effect, "the most significant cost of dark data arises from the mistaken conclusions and decisions you are making because of failure to understand dark data"; the answer to "where is dark data?" could easily be "nowhere" for some companies.

The negative effects of dark data

While the term "dark data" might have somewhat negative connotations, the simple fact of considering its very existence is a positive step for many companies. As the old adage goes, you don’t know what you don’t know. There are, of course, still downsides.

One of the most serious adverse effects of dark data is "business decisions made in good faith on the basis of inadequate data", according to Hand, which is also something that could be avoided. In fact, the dark data expert says that many data science courses "do not treat the topic of dark data adequately". It's possible for companies to realise their mistakes, but oftentimes this happens after operational decisions have been made with inadequate data to back them up.

Beyond financial costs, dark data can also present compliance and security risks. Since it’s often unclassified or forgotten, dark data can contain sensitive information that remains unprotected. As a result, businesses might fail to meet regulations like GDPR, which mandates the secure storage of personal data. In a worst-case scenario, this can lead to costly fines and reputational damage.

When migrating to the cloud, the presence of outdated or irrelevant data can complicate cloud strategies. IT teams waste time sifting through irrelevant files, leading to project delays and increased complexity. Additionally, unstructured data can skew analytics, producing misleading insights that undermine decision-making.

How to deal with dark data

"The first step must always be to be aware there might be dark data," argues Hand. "Indeed, your default assumption should be that the data are incomplete or inaccurate." For him, that is the most important message: "be suspicious about the data — at least until it is proved they are adequate and accurate."

"Additionally, you need to be able to recognize situations especially vulnerable to problems of dark data, particular signs that invisible dark data are distorting what has been collected, and more general situations in which danger lurks." No one said running a business was easy, after all.

To mitigate some of these challenges, businesses should conduct a comprehensive cloud audit before a migration, identifying and classifying data to determine what should be retained. Implementing data governance policies ensures that new data is adequately managed, while archiving or securely deleting dark data can prevent further accumulation.

Addressing dark data is essential for a smooth and cost-effective cloud migration. With careful planning and data management, organizations can avoid the pitfalls of transporting unnecessary information and instead build a leaner, more agile data infrastructure.

Global IT spending will hit 3.5 trillion in 2017, according to analyst firm Gartner's latest forecast.

The figure, which represents an increase of 2.4% over last year's IT spending, is the second time that Gartner's 2017 spending forecast has been revised. The firm initially predicted a growth of 2.7%, but marked this down to 1.4% in April thanks to a rise in the value of the dollar versus other currencies.

Gartner has now raised its growth prediction again - thanks to the dollar falling in value - and while it is still less than was initially forecast, the figure is substantially up from 2016, where total IT spending growth was just 0.3%.

The biggest increases will be seen in the enterprise software market, where the firm says spending will swell by more than 7.5%. Devices (including PCs, tablets and smartphones) will grow by almost 4% to a total value of $654 billion. Other areas such as data centre systems and communications services will have minimal, but still positive, growth.

"With the increased adoption of SaaS-based enterprise applications, there also comes an increase in acceptance of IT operations management tools that are also delivered from the cloud," said John-David Lovelock, vice president and distinguished analyst at Gartner.

"These cloud-based tools allow infrastructure and operations (I&O) organisations to more rapidly add functionality and adopt newer technologies to help them manage faster application release cycles. If the I&O team does not monitor and track the rapidly changing environment, it risks infrastructure and application service degradation, which ultimately impacts the end-user experience and can have financial as well as brand repercussions."

Worldwide IT spending is set to top $3.5 trillion in 2017, a 1.4% increase from 2016, according to Gartner.

However, the growth rate is down from a forecast of 2.7%, which the analyst firm attributed in part to the rising US dollar.

John-David Lovelock, research VP at Gartner, said that the strong US dollar has cut $67 billion out of its 2017 IT spending forecast. "We expect these currency headwinds to be a drag on earnings of US-based multinational IT vendors through 2017," he said.

The analyst house predicted that the data centre system market is expected to grow 0.3% in 2017. While this is up from negative growth in 2016, it is experiencing a slowdown in the server market.

"We are seeing a shift in who is buying servers and who they are buying them from," said Lovelock. "Organisations are moving away from buying servers from the traditional vendors and instead renting server power in the cloud from companies such as Amazon, Google and Microsoft. This has created a reduction in spending on servers, which is impacting the overall data centre system segment."

Driven by strength in mobile phone sales and smaller improvements in sales of printers, PCs and tablets, worldwide spending on devices (PCs, tablets, ultramobilesand mobile phones) is projected to grow 1.7% in 2017, to reach $645 billion. This is up from a 2.6% decline in 2016.

Mobile phone growth in 2017 will be driven by increased average selling prices (ASPs) for phones in emerging Asia/Pacific and China, together with iPhone replacements and the 10th anniversary of the iPhone.

The tablet market continued to decline significantly, as replacement cycles remain extended and both sales and ownership of desktop PCs and laptops are negative throughout the forecast, said Gartner. Over the course of this year, business Windows 10 upgrades should provide underlying growth, although increased component costs will see PC prices increase, added the analyst firm.

The global IT services market is forecast to grow 2.3% in 2017, down from 3.6% growth in 2016. The analysts said that modest changes to the IT services forecast this quarter can be "characterised as adjustments to particular geographies as a result of potential changes of direction anticipated regarding US policy both foreign and domestic".

Gartner added that business-friendly policies of the new US administration are expected to have a slightly positive impact on the US implementation service market as the US government is expected to significantly increase its infrastructure spending during the next few years.

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Worldwide PC shipments have fallen for the fifth year in a row according to Gartner, continuing the industry's seemingly unstoppable decline.

The number of PCs sold in 2016 fell by more than 6% compared to 2015, with a total of just 269.7 million; for context, that's the same as in 2007.

Analysts have blamed the continued slump on a lack of practical innovation within the PC sector, with Gartner's principal analyst Mikako Kitagawa noting that "the broad PC market has been static as technology improvements have not been sufficient to drive real market growth".

"There have been innovative form factors like 2-in-1s and thin and light notebooks," she noted, "as well as technology improvements, such as longer battery life," but pointed out that despite high engagement from pro-sumers, "the market driven by PC enthusiasts is not big enough to drive overall market growth".

Slowdown has also been blamed on an increasing reliance on smartphones, as the gap in capability between mobile and PC narrows. "There is the other side of the PC market, where PCs are infrequently used. Consumers in this segment have high dependency on smartphones, so they stretch PC life cycles longer," Kitagawa said.

While there were certain niche sectors of the market that are still likely to see growth over the next year such as the business and gaming segments she predicted that these areas would not be enough to reverse the decline of the PC market in 2017.

Analysts also warned that the UK was likely to be hit particularly hard by Brexit, with prices expected to rise by up to 10%.

The UK leaving the European Union will lead to an erosion in business confidence and price increases which will impact UK, Western Europe and worldwide IT spending, according to the latest report by Gartner.

The analyst firm believes the leave vote will quickly affect IT spending in the UK and in Europe while other changes will take longer. Staff may be the largest immediate issue. The long-term uncertainty in work status will make the UK less attractive to new foreign workers. Retaining current non-UK staff and having less access to qualified new hires from abroad will impair UK IT departments.

Dell partners have already reported a ten percent price increase on its products as of July 1.

Elsewhere, Gartner expects worldwide IT spending to be flat in 2016, totaling $3.41 trillion (see Table 1), up from last quarter’s forecast of negative 0.5 percent growth. The change in the forecast is mainly due to currency fluctuations.

“2016 marked the start of an amazing dichotomy. The pace of change in IT will never again be as slow as it is now, but global IT spending growth is best described as lackluster,” comments John-David Lovelock, research vice president at Gartner.

“2016 is the year that business focus turns to digital business, the Internet of Things and even algorithmic business. To fund these new initiatives, many businesses are turning to cost optimisation efforts centering around the new digital alternatives (for example, SaaS instead of software licenses, voice over LTE [VoLTE] instead of cellular and digital personal assistants instead of people) to save money, simplify operations and speed time to value. It is precisely this new breadth of alternatives to traditional IT that will fundamentally reshape what is bought, who buys it and how much will be spent.”

Table 1. Worldwide IT Spending Forecast (billions of US dollars)

Source: Gartner (July 2016)

The Gartner Worldwide IT Spending Forecast predicts datacentre systems spending will reach $174bn in 2016, a two percent increase from 2015. It says the market is driven by strong growth in the server markets in Greater China and Western Europe, and a strong refresh cycle in the North American enterprise network equipment market.

Global enterprise software spending is on pace to total $332bn, a 5.8 percent increase from 2015. Gartner says North America is the dominant regional driving force behind the growth, responsible for $11.6bn of the $24bn dollar increase in 2016. At a segment level, the fastest-growing market continues to be customer relationship management (CRM) software.

Devices spending is projected to total $627bn by the end of 2016. The lacklustre economic issues surrounding Russia, Japan and Brazil will hold back demand and worldwide PC recovery in 2016. Additionally, Windows 10 upgrades have further led to PC buying being delayed — consumers are willing to use older PCs longer, once they are upgraded to Windows 10.

Spending in the IT services market is expected to increase 3.7 percent, totalling $898bn, with Japan the fastest-growing region for IT services spending with 8.9 percent growth.

Brexit will affect worldwide IT spending, contributing to flat growth in 2016 of$3.41 trillion,Gartner warned today.

However, currency fluctuations mean the analyst house's forecast is an increase from its earlier outlook of negative 0.5 per cent growth.

"With the UK's exit, there will likely be an erosion in business confidence and price increases which will impact UK, Western Europe and worldwide IT spending," said John-David Lovelock, research vice president at Gartner.

Both Dell and smartphone manufacturer OnePlus have announced their intentions to raise UK prices in response to sterling's falling value in the fallout of Brexit.

Uncertainly over Brexitwill "quickly" affect IT spending in the UK and Europe, Gartner said, but added that it is unclear how long other changes will take.

The largest immediate issue could be staffing, Gartner suggested, pointing out that non-UK workers will find the country a "less attractive" prospect.

Retaining current EU citizen staff andhaving less access to qualified new hires from abroadwill also handicap UK IT departments, the research firm said.

Brexit aside, Gartner said this year marks a transition for businesses, with cloud technology and services disrupting establish markets.

From a sector perspective, Gartner predicts the biggest growth will be in software, with a spend of $332 billion, a 5.8 per cent increase from 2015. The fastest-growing segment continues to be customer relationship management (CRM) software, Gartner noted.

IT services spending is expected to total $897 billion, representing 3.7 per cent growth from 2015.

Datacentre systems' spending is also predicted to reach $174 billion in 2016, a two per cent increase from 2015. Gartner pointed to strong growth in the server markets in Greater China and Western Europe, and accelerated interest in the North American enterprise network equipment market.

Devices and communication services will attract large spending rounds, but outlook for these sectors suggests a decline. Flagging economic issues in Russia, Japan and Brazil will hold back demand and worldwide PC recovery in 2016, said Gartner.

Windows 10 upgradeshave led to further PC buying delays, it added, as consumers are willing to "use older PCs longer, once they are upgraded to Windows 10".

Lovelock explained the shifts that are taking place are "start of an amazing dichotomy".

"The pace of change in IT will never again be as slow as it is now, but global IT spending growth is best described as lacklustre," said Lovelock.

"2016 is the year that business focus turns to digital business, the IoT and even algorithmic business. To fund these new initiatives, many businesses are turning to cost optimisation efforts centring around the new digital alternatives for example, SaaS instead of software licenses, voice over LTE (VoLTE) instead of cellular and digital personal assistants instead of people to save money, simplify operations and speed time to value. It is precisely this new breadth of alternatives to traditional IT that will fundamentally reshape what is bought, who buys it and how much will be spent."

Earlier this year, the research group predicted a10 per cent in the PC market in 2016. It also projected adecline for smartphones as demand slows.

Worldwide smartphone sales are estimated to reach 1.5 billion units in 2016, a new report on device shipments from research group Gartner predicts.

Gartner said this represents just seven per cent growth compared to last year, indicating a reduction in demand for the devices. In January, the analyst house predicted 2016 would be the first time there would be a collective decline in smartphones, tablets and PC sales.

The group's forecast put this change down to flat growth in the major markets of China and North America this year.

"Historically, worsening economic conditions had negligible impact on smartphone sales and spend, but this is no longer the case," said Ranjit Atwal, research director at Gartner. "China and North America smartphone sales are on pace to be flat in 2016, exhibiting a 0.7 per cent and 0.4 per cent growth respectively."

In developed markets, including North America, Western Europe and Japan, Gartner research director Annette Zimmermann said growth is also slowing due to longer smartphone lifetimes.

"As carriers' deals become more complex, users are likely to hold onto phones, especially as the technology updates become incremental rather than exponential," she said. "In addition, the volumes of users upgrading from basic phones to premium phones will slow, with more basic phones being replaced with the same type of phone."

Sales in India, by contrast, are on track for double-digit growth in the next two years, Gartner claimed.

Gartner has also predicted 150 million consumers will delay upgrading to smartphones in the emerging Asia Pacific markets through to 2019, until the functionality and price points becomes more desirable.

The total mobile phone market, which includes feature phones, is forecast by Gartner to reach 1.9 billion units in 2016.

While things may not be looking so good for smartphones, the opposite seems to be happening with PCs.

"In 2016, the PC market will reach its last year of decline before returning to growth in 2017," said Atwal.

Specifically, Gartner predicts a total 284 million PC shipments in 2016, a decline of 1.5 per cent year on year, as well as a fall in traditional PC sales by 6.7 per cent.

Atwal added: "The biggest challenge, and potential benefit for the PC market, is the integration of Windows 10 with Intel's Skylake architecture. It has the potential for new form factors with more attractive features."