AI and Cloud Transformation Expected to Dominate IT Investment Priorities for 2024
New research by Rackspace Technology (NASDAQ: RXT), a leading end-to-end, hybrid multicloud technology solutions company, in association with Dell and VMware finds that despite ongoing economic uncertainty, businesses in the Asia Pacific and Japan (APJ) region are committed to prioritising their IT investments in 2024, particularly in transformative technologies such as artificial intelligence (AI) and cloud transformation.
According to the 2024 IT Outlook Report, which surveyed 1,420 global IT professionals, 65%of organisations in the region plan to increase their IT investments over the next 12 months given the current economic climate. Moreover, artificial intelligence dominates as the top priority, with 59% of APJ respondents identifying pervasive artificial intelligence as the technology that will have the most significant positive impact on their organisation over the next 12 months. The survey also underscores the continued adoption of the cloud. When asked about the makeup of their organisation’s IT infrastructure and how it will evolve over the next 12 months, edge computing, private cloud, and public cloud increased as a percentage of workloads, while data centers, colocation facilities, and mainframes declined.
“These results highlight a decisive shift in artificial intelligence from the technical curiosity and pilot programs in 2023 to accelerating business outcomes through the industrialisation of Responsible AI solutions in 2024,” said Srini Koushik, President of Technology and Sustainability at Rackspace Technology. “In the cloud arena, the increased focus on the edge and private cloud indicate that organisations are simultaneously migrating more of their critical workloads while adopting a more sophisticated workload-aware approach to their overall cloud infrastructure.”
In 2024, the evolutionary impact of generative AI cannot be overlooked in the region. Specific to Malaysia, the National Artificial Intelligence Roadmap 2021-2025 signifies a pivotal stride towards technological advancement. Embracing AI and cloud solutions aligns with our commitment to driving innovation, empowering businesses to leverage transformative technologies for sustainable growth. The survey’s insights reinforce the importance of responsible AI integration and showcase the evolving landscape where AI evolves from pilot programs to driving tangible business outcomes in 2024, says Sandeep Bhargava, SVP, Global Services and Solutions, Public Cloud Business Unit at Rackspace Technology.”
AI Evolution
As generative AI continues to mature and grow in importance, 33% of organisations say they have either completed prototypes and are taking projects into production or already have projects underway and plan to expand them, while another 65% of respondents are either currently ideating on the use of generative AI or plan to do so. Just 2% of respondents have no plans to use generative AI. Moreover, 62% of those surveyed say they will have generative AI either integrated into some processes or fully integrated into all processes in 12 months.
While many organisations are using AI primarily for “table stakes” tasks such as sentiment analysis and code development, the use cases where respondents see the greatest expected benefit include security (54%), new product development (51%), increased productivity (46%) and enhanced speed and efficiency in existing work processes (41%) and increasing revenue streams (41%).
At the same time, organisations report challenges in implementing AI programs. 40% of survey participants acknowledge demonstrating the value of AI as a hurdle, while insufficient technological infrastructure support for AI was noted by 41%, followed by a shortage of skilled IT talent, at 30%. Organisations also continue to grapple with data governance policies and strategies in response to AI. Less than half (44%) of organisations have policies or strategies in place to address privacy concerns, and only 40% say they have addressed data bias.
“While some organisations have already implemented AI-powered solutions, many are still in the early stages, grappling with the considerations and challenges associated with AI adoption,” added Koushik. “They are not just contemplating but actively addressing the issues associated with the widespread integration of AI into their business processes and operations, marking a crucial phase in their transformative journey.”
Cloud and Edge Trends Ascending
The survey highlights an ongoing trend in terms of technology adoption. Edge computing is also becoming a priority, with 30% of organisations saying it will be part of their IT infrastructure makeup in 12 months, compared to 26% today. 79% of respondents say they are employing a hybrid cloud strategy today.
More than half (56%) of organisations in APJ indicated that they are facing significant challenges for the workloads that they have migrated to the cloud. Survey participants identified security/compliance risks as their primary challenges in transitioning to the cloud, at 37%. This was followed by concerns such as resource shortage (35%) cost overruns (34%), resistance to change (30%), and a lack of stakeholder buy-in (23%).
The Talent Search Dilemma
As companies prioritise AI and cloud, securing and retaining talent remains a challenge, with 77% of respondents identifying a shortage of skilled workers as their leading concern. 42% of respondents in APJ also see paying more to fill critical roles, with the rapid pace of technology advancement cited as the leading cause for higher IT labor costs.
Key roles that organisations in Asia Pacific and Japan are struggling to hire include:
1) 5G Specialists (55%)
2) Data Engineers (45%)
3) Cybersecurity Experts (43%)
4) Data Scientists (41%)
“The sustained pace and magnitude of technology advancements in AI, Cloud, Security, and other technologies demand an adaptable workforce that embraces lifelong learning,” added Koushik. “This challenge underscores the need for a different workforce strategy that prioritises adaptability, problem-solving, and continuous learning in addition to the latest technical skills to keep pace and drive innovation forward.”
Click here to review the comprehensive 2024 IT Outlook Whitepaper and Infographic with the breakdown of survey findings.
Survey Methodology
The survey was conducted by Coleman Parkes in October and November 2023 and targeted 1,420 senior IT decision makers across multiple key sectors in the USA, LATAM, EMEA and APAC.
Coleman Parkes is a full-service B2B market research agency specialising in IT/technology studies, targeting senior decision makers in SMB to large and enterprises across multiple sectors globally.
