The 7 Hottest Market Trends To Watch In The IT Industry: IDC

‘A nice way to think about AI is it's going to be one of those invisible-in-plain-sight technologies. You're going to wake up and you're going to open up Salesforce and say, ‘Huh, that button wasn't there yesterday,’ says Crawford Del Prete, president of market research firm IDC.

Whether it’s growth in AI, security or cloud infrastructure, the IT industry is predicted to scale in 2024, despite concerns around inflation and the economy.

The rapidly evolving digital landscape is driving the need for structured data and AI-enabled PCs, and AI and automation initiatives are becoming more important for managing data and taking advantage of advanced processing requirements.

Crawford Del Prete, president of Needham, Mass.-based market research firm IDC, spoke last week at the Global Technology Distribution Council summit in Oceanside, Calif., to a room full of vendors and distributors on what IDC is seeing in terms of the trends in the IT market.

Of the companies in 110 countries that IDC surveys, 50 percent of them are operating as a digital business. And today, two-thirds of all products are digital-based.

“They leave a significant digital footprint, I'll go on to say that they drip data,” said Del Prete (pictured). “Those of your customers that can figure out ways to monetize the data that is oozing out of these services are the ones who are going to win long term.”

He said 81 percent of IT leaders expect 2024 spending to increase or remain stable.

However, concerns around inflation, the economy and staffing still remain. “So people are a little bit unsure, but marginally positive,” he said.

“People think it's going to get better,” he said. “That's kind of the underlying impression, and that's pretty consistent around the world.”

In fact, by 2027 IDC predicts the AI market will be worth $500 billion and the GenAI market is predicted to be worth $150 billion. The AI market is expected to shift towards software, services and platforms as generative AI becomes more prevalent.

“A nice way to think about AI is it's going to be one of those invisible-in-plain-sight technologies,” he said. “You're going to wake up and you're going to open up Salesforce and say, ‘Huh, that button wasn't there yesterday.’”

IDC also forecasts that by 2027, 60 percent of the market will be AI-enabled PCs, which are PCs that have an onboard AI processor.

“We’re about to enter a double dutch refresh cycle where you're going to need a refresh, because of an operating system or end of life, and you're going to need a refresh associated with AI PCs. This market is going to deliver significant productivity gains going forward,” he said.

“If you believe that people aren't going to want AI-based PCs that allow you to process at the edge of the network in your data set, you're wrong,” he added. “This is exactly the kind of difference companies are looking for. They're looking to be able to structure their data properly and make better decisions with their data.”

From security to AI to AI Pcs, here are the seven IT market trends to watch.

IDC Predicts AI Market To Be $500B By 2027

By 2027, IDC predicts the AI market to be worth $500 billion and the GenAI market is predicted to be worth $150 billion.

“For AI, we will see people gaining new powers they never had before, we will see that people will start experimenting with generative AI that will move to widening AI,” Del Prete said. “That's a screaming opportunity for automation going forward, and frankly, for what we think is going to be a new world. The software, the services and the platforms that are going to emerge with generative AI are going to be the big differentiators.”

The biggest opportunities associated with AI are software development and creating more automated ways to save time in completing tasks. In fact, IDC’s survey found that organizations around the world expect an average of three-and-a-half percent return on AI investments.

“This is moving very fast and it's changing very, very rapidly,” he said.

AI Impacting Staffing And Security

The IDC survey showed that 63 percent of organizations will not be replacing humans with AI in the next 24 months, and 34 percent said they will be. Of those that will be implementing AI replacements, majority said that only one to 10 percent of their organization’s workforce will be impacted.

The survey also predicts that by 2027 40 percent of current job roles will be redefined or eliminated by the acceleration of AI.

“Work is about to change dramatically as a function of the people getting bionic powers and the ability to do things at scale they were never able to do for,” he said.

The biggest concerns around AI fall around cybersecurity and privacy concerns. Other concerns are developing challenging models, untrustworthy GenAI and companies not having quality data.

“I think as companies get into this problem, they're going to see that they need to structure the data in a better way,” Del Prete said. “Until they fix their data, they're not going to be able to take advantage of AI.”

‘GenAI Is Becoming Embedded Across Multiple Aspects Of Work’

Del Prete said GenAI is “automating the routine on the left hand side and mastering the complex on the right hand side.”

IDC reported that GenAI is being embedded into automation like in-app learning, data optimization like data augmentation and predictive maintenance, content creation like text and audio creation and code generation like code recommendations and translation.

“I think we're going to continue to see the spectrum emerge,” he said. “But I think of it as allowing people to play to their strengths, allowing people to fill in the gaps that they have but gaining superpowers in areas where this will make them significantly more productive.”

Despite Macro-Economic Pressures, The IT Market Remains Resilient

Historically, when the GDP (gross domestic product) takes a hit, IT typically feels the pain. But when COVID-19 happened and the GDP collapsed, IT remained resilient, Del Prete said. The largest growth areas in 2023, and that are expected to grow in 2024, are cloud infrastructure (22 percent), software (12 percent) and storage (10 percent).

“AI is fueling growth coming out of a very supply-constrained environment, particularly for servers,” he said. “For servers and storage infrastructure, our call for this year on a market that was significantly lower, about five percent growth last year, is about 10 percent growth this year. We believe that's going to be largely fueled by GPUs (graphics processing units) and the need to upgrade infrastructure to handle these LLMs (large language models) that are being put into the marketplace.”

Software Services Are On The Rise

IDC predicted that about half of IT spending around the world will be on cloud in 2024.

“It’s really about the cloud,” Del Prete said. “It’s about infrastructure, platform-as-a-service and software-as-a-service. SaaS will grow about 17 percent.”

Other software services that are growing the fastest are security, AI platforms and collaborative apps.

“Collaborative apps, it’s the Zoom products, it’s the Teams products,” he said. “It’s about the productivity and being able to click into a meeting from anywhere. So they’ll continue to be very strong.

“Software is feeding the world and you're going to see the investment in software absolutely continue,” he added. “This will be the stickiest part of the IT market.”

Watch Out For AI PCs

While the PC market has shrunk over the last two years, research shows that it’s expected to see three percent growth this year, “So we’re starting to see signs of life.”

While some of that is due to the refreshment of Windows PCs, IDC predicts a lot of eyes will look to AI PCs, which are PCs that have an onboard AI processor.

“That allows you to do local processing of AI workloads to increase your experience and bring the point of decision out to the edge,” Del Prete said. “The ability to go through your data, even if you're not connected to the cloud, in a rapid manner is extremely differentiating.”

IDC forecast that by 2027 60 percent of the market will be AI-enabled PCs.

Security Is Immune To Budget Cuts

The IDC survey found that when it comes to enterprise businesses and budget reductions, security, risk and compliance are immune. This is followed by infrastructure and IT operation optimization, AI and automation initiatives, application development and workplace solutions.

“This gets us back to being able to manage our data more effectively and being able to take advantage of whatever advanced processing requirements for AI workloads,” he said. “If you're looking to really engage your customers, these are the hot buttons your customers are most interested in going forward.”