Letter to Chief Information Officers, and Friends
Technology Industry Report: Trends, Predictions, and Analysis
Introduction The technology industry is undergoing rapid transformation, driven by advancements in artificial intelligence, cloud computing, cybersecurity, and other disruptive technologies. This report examines the key technology trends shaping the industry and provides insights into their potential impact on businesses and society. The analysis is based on the predictions and research from three leading analyst firms: Gartner, Forrester, and IDC.
Trend 1: Artificial Intelligence and Machine Learning
Artificial Intelligence (AI) and Machine Learning (ML) continue to be the most transformative technologies across industries. The rise of generative AI, powered by large language models and neural networks, is enabling new applications in content creation, drug discovery, and customer service. AI security and privacy are becoming critical concerns as organizations seek to mitigate risks associated with AI systems. AI augmentation, the use of AI to enhance human capabilities, is expected to create significant business value and improve productivity.
Gartner predicts that generative AI will account for 10% of all data produced by 2025, up from less than 1% today. Forrester forecasts that AI will create 9% of new U.S. jobs by 2025, while IDC estimates that global spending on AI systems will reach $97.9 billion in 2023, an increase of 28.4% from 2022.
The adoption of AI and ML technologies is driven by the availability of vast amounts of data, increased computing power, and advancements in algorithms. Organizations across sectors are leveraging AI to automate processes, gain insights from data, and create new products and services. However, the ethical implications of AI, such as bias and transparency, remain a concern and require ongoing attention and governance.
Trend 2: Cloud Computing
Cloud computing has become the foundation for digital transformation, enabling organizations to scale their IT infrastructure, reduce costs, and accelerate innovation. The distributed cloud model, which brings cloud services closer to end-users, is gaining traction as organizations seek to improve performance and comply with data sovereignty regulations. Cloud sustainability is emerging as a key consideration, with providers and customers focusing on reducing the carbon footprint of cloud operations. Cloud data ecosystems are enabling the sharing and monetization of data across organizations, creating new business opportunities.
Gartner predicts that by 2025, over 95% of new digital workloads will be deployed on cloud-native platforms, up from 30% in 2021. Forrester forecasts that the global public cloud infrastructure market will grow 35% to $120 billion in 2021, as the pandemic accelerates cloud adoption. IDC estimates that by 2024, more than half of all IT spending will be cloud-based, reaching 60% of all IT infrastructure and 60-70% of all software, services, and technology spending.
The cloud computing landscape is dominated by a few large providers, such as Amazon Web Services, Microsoft Azure, and Google Cloud Platform. However, the market is also seeing the emergence of specialized cloud services, such as those focused on AI, blockchain, or edge computing. Organizations are increasingly adopting multi-cloud and hybrid cloud strategies to avoid vendor lock-in and optimize their IT environments.
Trend 3: Cybersecurity
Cybersecurity remains a top priority for organizations as cyber threats become more sophisticated and frequent. The concept of a digital immune system, which combines multiple security technologies and practices to create a resilient defense, is gaining traction. AI-driven security solutions are being deployed to detect and respond to threats in real-time, while zero trust security architectures are being adopted to secure remote workforces and cloud environments.
Gartner predicts that by 2025, 60% of organizations will use cybersecurity risk as a primary determinant in conducting third-party transactions and business engagements. Forrester forecasts that the global cybersecurity market will reach $170.4 billion in 2022, a 10.4% increase from 2021. IDC estimates that worldwide spending on security hardware, software, and services will reach $174.7 billion in 2024, with a compound annual growth rate (CAGR) of 8.1% over the 2020-2024 forecast period.
The shift to remote work and the increasing reliance on cloud services have expanded the attack surface for organizations. Ransomware attacks have become more prevalent, with criminals targeting critical infrastructure and demanding larger payouts. Organizations are investing in cybersecurity awareness training, incident response planning, and threat intelligence sharing to improve their resilience against cyber threats.
Appendix: Predictions by Industry
1. Artificial Intelligence and Machine Learning
* Gartner: Generative AI will account for 10% of all data produced by 2025, up from less than 1% today.
* Forrester: AI will create 9% of new U.S. jobs by 2025.
* IDC: Global spending on AI systems will reach $97.9 billion in 2023, an increase of 28.4% from 2022.
2. Cloud Computing
* Gartner: By 2025, over 95% of new digital workloads will be deployed on cloud-native platforms, up from 30% in 2021.
* Forrester: The global public cloud infrastructure market will grow 35% to $120 billion in 2021.
* IDC: By 2024, more than half of all IT spending will be cloud-based, reaching 60% of all IT infrastructure and 60-70% of all software, services, and technology spending.
3. Cybersecurity
* Gartner: By 2025, 60% of organizations will use cybersecurity risk as a primary determinant in conducting third-party transactions and business engagements.
* Forrester: The global cybersecurity market will reach $170.4 billion in 2022, a 10.4% increase from 2021.
* IDC: Worldwide spending on security hardware, software, and services will reach $174.7 billion in 2024, with a compound annual growth rate (CAGR) of 8.1% over the 2020-2024 forecast period.
4. Internet of Things (IoT)
* Gartner: By 2023, more than 50% of enterprise-generated data will be created and processed outside the data center or cloud, up from less than 10% in 2019.
* Forrester: The number of IoT devices will reach 30.9 billion by 2025, generating $7.1 trillion in economic value.
* IDC: Global IoT spending will reach $1.1 trillion in 2023, with a CAGR of 11.9% over the 2020-2024 forecast period.
5. Data and Analytics
* Gartner: By 2023, organizations that promote data sharing will outperform their peers on most business value metrics.
* Forrester: The data and analytics market will reach $106 billion in 2021, a 12.8% increase from 2020.
* IDC: By 2025, 80% of enterprises will have shifted to cloud-centric infrastructure and applications, driving a 5x increase in data and analytics workloads running in the cloud.
6. Digital Workplace
* Gartner: By 2023, 75% of organizations will have a digital workplace roadmap, up from 30% in 2020.
* Forrester: The market for employee experience (EX) technologies and services will reach $100 billion by 2025.
* IDC: By 2023, 60% of G2000 companies will have deployed AI-enabled digital workplace services, up from less than 10% in 2019.
7. Automation
* Gartner: By 2024, organizations will lower operational costs by 30% by combining hyperautomation technologies with redesigned operational processes.
* Forrester: The robotic process automation (RPA) market will reach $12 billion by 2023, with a CAGR of 49% from 2018 to 2023.
* IDC: By 2022, 45% of repetitive work tasks will be automated or augmented using "digital co-workers," powered by AI, robotics, and RPA.
8. Immersive Technologies
* Gartner: By 2026, 25% of people will spend at least one hour a day in the metaverse for work, shopping, education, social, or entertainment purposes.
* Forrester: The market for virtual and augmented reality (VR/AR) will reach $18.8 billion in 2020, up 78.5% from 2019.
* IDC: Worldwide spending on AR/VR will reach $72.8 billion in 2024, with a CAGR of 54% over the 2020-2024 forecast period.
9. Software Engineering
* Gartner: By 2025, 70% of new applications developed by organizations will use low-code or no-code technologies, up from less than 25% in 2020.
* Forrester: The low-code market will reach $21.2 billion by 2022, with a CAGR of 40% from 2017 to 2022.
* IDC: By 2024, more than 50% of all applications will be created using cloud-native technologies, up from less than 10% in 2019.
10. Sustainability Technology
* Gartner: By 2025, 75% of organizations will have implemented sustainable IT practices, up from 20% in 2020.
* Forrester: The market for sustainability management software will reach $1.5 billion by 2023, with a CAGR of 20% from 2018 to 2023.
* IDC: By 2024, 50% of organizations will have implemented ESG (environmental, social, and governance) reporting and analytics tools, up from 10% in 2020.
