Northdoor comment
2025 will see a boost to technology budgets
In 2025, the global economic landscape will remain a mix of challenges, opportunities, and potential shifts shaping markets and industries worldwide. From high interest rates to the evolving impact of AI, several key factors will define the year ahead.
Gartner Forecasts Worldwide IT Spending to Grow 9.8% in 2025 Share on XWhile there will be friction in some areas, persistence, agility, and out-of-the-box thinking will ensure a competitive edge. Certainly, the recent re-election of the Republican party in the US will usher in a major economic boost, especially in the construction, energy, manufacturing, and technology sectors, so we would agree with Gartner’s predictions. We also believe that tax breaks and deregulation could spark investment. This surge in business activity will lift consumer confidence and inject fresh energy into the U.S. economy, especially after a period of high interest rates, which will also impact the UK.
AI presents both risks and opportunities
Artificial Intelligence (AI) of all varieties is adding a new dimension to both cyber attack campaigns and defensive strategies, with regulatory authorities struggling to keep pace with AI’s risks and opportunities.
We do see this year as a breakout year for AI with companies increasing their spend and, indeed, the government increasing its commitment to AI. In 2024, AI had to navigate the “trough of disillusionment” as early excitement met the reality of limitations. However, as organisations rethink their strategies, this phase of setbacks will unlock new opportunities. In 2025, AI is set to shift into the “plateau of productivity” with refined AI models, scaled projects, and practical, high-impact applications. This will be a considerable shift in comparison to the toe-dipping and experimentation we’ve seen in 2024.
AI will automate tasks and enable smarter decisions
Against a backdrop of financial uncertainty here in the UK, and regulations adding further potential costs, organisations will be seeking cost-effective, efficient methods to remain compliant and reach their goals. This is likely to be a main area of opportunity for the AI industry due to its practical applications of automating tasks, aiding teams in quickly analysing vast sets of data, and helping companies make smarter decisions without hiring more people. In 2025, refined, practical uses such as this will give organisations a major edge. This is especially true in sectors such as healthcare, finance, and manufacturing, where AI-driven automation and analytics are poised to transform operations.
A boom in Data Centres
artner projects that IT services companies and hyperscalers will account for over 70% of IT spending in 2025. While existing colocation facilities can – to an extent – support AI workloads if they can be retrofitted with specialised hardware and cooling equipment, as AI continues to grow, new data centre capacity will be required to fulfil the demand. G
Strategic considerations for CIOs and IT leaders
As we navigate this tech-centric landscape, IT leaders should consider the following:
- Budget allocation: Align your IT spending with the projected growth areas, particularly in AI and data centre capabilities. Gartner’s forecast shows significant growth across all IT segments, with IT services and software leading the way at $2.03 trillion and $1.55 trillion, respectively.
- AI strategy refinement: Move beyond pilot projects to identify and implement AI solutions that deliver measurable business value. With IT services companies and hyperscalers projected to account for over 70% of IT spending in 2025, partnering with the right service providers will be crucial.
- Infrastructure readiness: Assess your current data centre capabilities and plan for upgrades or expansions to support AI workloads. Gartner predicts that by 2028, hyperscalers will operate $1 trillion worth of AI-optimised servers.
- Skill development: Invest in training and hiring to build teams capable of leveraging advanced AI and data analytics tools. The projected 10.4% growth in IT services spending underscores the importance of having skilled professionals to implement and manage new technologies.
- Regulatory compliance: Stay ahead of evolving AI regulations while harnessing its potential for ensuring compliance in other areas. With the increasing focus on data privacy and security, this aspect of IT management will become even more critical.
Conclusion
2025 presents a unique confluence of economic factors, technological advancements, and shifting business priorities. Organisations can position themselves at the forefront of this digital revolution by strategically investing in AI, data centre capabilities, and related technologies. As we at Northdoor continue to monitor these trends, we remain committed to guiding our clients through this exciting period of technological transformation.