Analysis of Survey Results

Highlights from our latest Senior Leadership IT Investment Survey

Last week, we published findings from our annual Senior Leadership IT Investment Survey. Conducted in July, it explored investment and adoption plans for a range of areas including cloud computing, hybrid working and employee enablement, machine learning, 5G, extended reality and application development.

We polled 700 C-level executives in both business and IT roles, with more than 60% of them holding CEO or chief information officer positions. Respondents were mostly from large organizations in a range of industries in the US and Europe.

In this article, we outline the most significant highlights and what they mean for businesses. The full survey report is available to clients here.

Wide-Scale Business Transformation Continues as IT Investment Grows

After a year of intense investment by businesses, the IT investment climate in 2022 is set to become even stronger as leaders continue to push toward greater resiliency and innovation through digitization and business transformation. Almost 90% of senior leaders expect their IT investment to increase over the next 12 months, with a third anticipating a rise of more than 15%.

Security, cloud services and communications and collaboration technology remain the biggest priority areas for this investment. The rise of ransomware attacks over the past year, with the SolarWinds breach as well as several other major security incidents, continue to put cybersecurity at the forefront for every business leader.

The pandemic has also had an impact on where funding lies for IT projects. Our survey data reveals that IT will take even more control of total IT spending within organizations, in contrast to budgets being determined by line of business and decentralized spending, which saw a rise prior to Covid-19.

Cloud — and Multicloud — Computing on the Rise

Despite assertions in the media that adoption of public cloud platforms is slowing because of the rise of hybrid cloud and edge solutions as well as “as a service” options for on-premises infrastructure, public cloud investment continues to accelerate rapidly. An estimated 45% of all business workloads are now deployed in the cloud, according to respondents, and IT leaders are even more bullish for the year ahead, with their expectations indicating this figure will rise to 64% by 2022. More than half of businesses, 55%, are currently operating a multicloud strategy, compared with 46% in 2020 (see chart below).

Industries such as financial services and the public sector remain the most optimistic about planned cloud adoption. The most popular workloads shifting to the cloud are productivity and collaboration applications, security, databases and data lakes and analytics.

Once again this year, Microsoft Azure is the most widely used public cloud, according to C-suite executives, and continues to dominate against the big tech firms in being the perceived leader in enterprises in both innovation and trust. However, Google Cloud is making strong progress against Microsoft, Amazon Web Services (AWS) and IBM in terms of usage.

Attention Turns to Hybrid Working as Office Space Drops by a Third

Encouraged by the success of remote working over the past 18 months, leaders continue to recognize the changes happening in the world of work. As they embrace the prospect of hybrid working, effective team collaboration and employee engagement are the primary concerns for leaders, with communications and collaboration technology remaining one of the top three investment priorities.

These changes also affect the role that offices will play, with businesses expecting to need on average just 60% of their pre-pandemic office space capacity. Many see physical office layouts changing to focus on collaboration, interaction and relationship building. However, some employees will continue to work remotely at any one time, so online meeting technology will remain critical to support teamwork.

This is a big focus for leaders as they prepare for the return to offices, with meeting room hardware an investment priority for 49% of respondents, alongside 50% expecting to deploy Covid-19 safety solutions. Investments in meeting room management and touchless office solutions are also prime considerations for businesses as they balance operational teamworking needs with employee safety, with both being important to 42% of senior leaders (shown in the chart below).

Emerging Technology a Focus for Innovation-Driven Transformation

The survey also revealed interesting shifts in emerging technologies such as artificial intelligence (AI), mixed reality and 5G, as new technologies play a larger role in boosting innovation, business results and a culture of transformation.

Rising AI Investment and Deployment Maturity Fuels Security and Privacy Concerns

Investment in AI and machine learning technology is set to significantly pick up the pace in the next 12 months, with more than 75% of businesses planning to increase their spending, compared with 47% who said the same a year ago.

Organizations are also increasing their maturity with the technology, with almost half of respondents, 47%, now having AI applications in production. Microsoft again remains the perceived leader in AI and machine learning among senior leaders, and has extended its lead over Google Cloud, IBM and AWS from our 2020 survey.

After a year of increased scrutiny and a deeper focus on responsible approaches and new regulation in the form of the European Union’s Artificial Intelligence Act, security and the privacy of data in AI and machine learning systems remain the primary areas of concern for businesses. This concern is increasingly fuelling purchasing decisions as well, with over a third of senior leaders saying that privacy and security of data for machine learning is their number-one consideration for investment in AI.

Extended Reality Surges in Business

Another important topic for business leaders was the potential for extended reality, which has seen a boost over the past 18 months from the shift to widespread remote work. As a result, remote assistance and virtual meetings are now the most common applications for immersive technology, with 86% of businesses having deployed at least one extended reality device. Augmented reality and mixed reality devices are now twice as prevalent as virtual reality devices in organizations, with 11% of businesses having more than 1,000 augmented and mixed reality devices. This remains a hotbed of innovation and competition in the market, with Facebook and Microsoft both making major announcements.

Bullish Appetite for 5G

IT leaders believe 5G is on the cusp of dramatic growth over the coming year as almost two-thirds of businesses plan to make an investment within the next 12 months. The biggest motivation for this interest is to solve employees’ challenges with home connectivity, with almost 20% of businesses highlighting this as the most valuable application of 5G.

Most organizations expect to use services managed by a mobile operator rather than acquiring and managing their own 5G spectrum and private network infrastructure. However, investment in managed private networks is expected to be almost on a par with that in public 5G services, according to the survey.

A Pivotal Moment for Technology

Targeted at senior business leaders, our 2021 survey of C-suite professionals and IT decision-makers offers a unique glimpse into the most important tech trends fuelling business transformation right now.

The pandemic and resulting shifts in working continue to bring a greater dependency on technology, perhaps greater than we’ve ever seen, as businesses around the globe increasingly commit to digital technology to become more agile, resilient and innovative, as well as to transform the culture in their organizations.

This effort has brought further investment and change in important areas such as cloud computing, remote working and collaboration, emerging technologies such as AI, 5G and extended reality, as well as in the supplier relationships that underpin these fields.

Crucially, senior leaders expect to see more even change in the future, as topics such as security and trust, sustainability, diverse and inclusive workplaces, regulation and emerging transformative technologies such as analytics, AI and 5G take hold.

We look forward to digging deeper into these developments and tracking their progress in the year ahead.