Positive investment outlook
Even as companies devote more resources to their digital transformations, the pace of innovation in tech and telecommunications may be difficult for them to keep up with. That is just one possible conclusion from the broadly bullish perspective revealed in this year’s customer buying survey. With more than half of all enterprises planning to grow their tech and telecommunications spending, the 2024 market outlook represents a healthy three percentage point overall increase from last year, even after inflation.
While spending on virtually all product categories looks poised for growth according to our survey results, a select group is the driving force behind this positive trend. The largest shares of decision makers intend to increase their spending on security, cloud, and Internet of Things (IoT), which all look set to capture at least 8 percent more in total spending than the year before. As for connectivity offerings, fast-growing companies are placing increasing emphasis on next-generation solutions, with investments in 5G technology becoming a prerequisite for success, and the adoption of private networks gaining traction.
The growth in enterprise budgets signifies a recognition of the importance of being at the forefront of technology to drive innovation. Being agile and adaptable is critical, but the vast majority of organizations now also seem to indicate they believe that truly investing in the digital future requires increasing the size of their portfolio year by year.
Large enterprises are leading the way
The fact that all enterprises on average have generally ambitious tech and telecommunications spending plans for this year doesn’t mean they share an equally bullish view. On the contrary, large enterprises are much more likely than their small and medium-sized enterprise (SME) peers to grow investment across product categories. More than two-thirds are planning budget expansions, compared to about half of small enterprises, across industries. While SMEs remain largely focused on fixing the basics, larger, more established organizations are moving beyond core tech expansion with close to three-quarters planning a higher degree of investments in more advanced categories such as IoT, cloud, and next-gen connectivity. Increased spending on IoT is understandable; our research shows enterprises must adopt a trial-and-error strategy to unlock its full potential. Notably, however, almost two-thirds of large enterprises plan to increase their spending even further on more traditional fixed and mobile connectivity services, proof that they believe no aspect of tech or telecommunications can be taken for granted.
Africa and Asia–Pacific display strongest upside
From a global perspective, different regions do not necessarily share the same upbeat view in their spending projections. Companies in Africa especially, and Asia–Pacific to a slightly lesser extent, hold a much more optimistic outlook compared to their European counterparts. Just half of European enterprises surveyed plan to grow their budgets, compared with two—thirds of respondents in Asia–Pacific, and three–quarters of respondents in Africa. These two regions’ heightened optimism reflects growing recognition of the untapped market potential. By contrast, survey findings suggest the general macroeconomic challenges Europe is experiencing are directly affecting the spending appetites of companies. For its part, the Americas are not too far behind Asia–Pacific in investment outlook.