B2B commerce is evolving at an unprecedented pace. Rapid technological advancements, evolving customer expectations, and market dynamics are paving the way for increased adoption of digital commerce platforms.

B2B organizations are reaping the benefits of enhanced sales efficiency, improved profitability, and better customer experiences. However, as the B2B digital commerce landscape becomes more complex, organizations must stay attuned to emerging trends and address related challenges in an agile way. This means transforming their operations and strategically aligning their resources to maintain a competitive edge in this dynamic landscape.

B2B Digital Commerce Is Increasingly Becoming Experience Driven

Business buyers now demand personalized interactions expecting streamlined product discovery and context-aware recommendations. Role-based personalization, while addressing the collective needs of buying groups, will be crucial in B2B sales. Additionally, self-service capabilities can empower buyers and reduce friction in complex buying scenarios.

This means empowering them and giving them a sense of control over the buying process, while also providing the crucial “human touch” to aid decision making. As sellers continue to drive a significant part of the buying experience, they can benefit from personalized support, increased automation, and streamlined workflows so they can focus on strategic selling. Tools like digital sales rooms exemplify this synergy between digital tools and human expertise by creating collaborative environments where buyers and sellers can interact efficiently.

AI Is Transforming Every Facet of Digital Commerce

From hyper-personalized interactions to predictive analytics, AI is poised to transform the entire buying journey. AI-driven product configuration tools can streamline workflows and provide dynamic and needs-based solutions. Generative AI (GenAI) offers new opportunities for workforce enablement and customer engagement.

AI agents can further transform this through autonomous decision-making and self-optimizing processes, reimagining how organizations interact with their customers. To fully leverage this potential, B2B organizations must build robust data foundations and enable their workforce to fully leverage AI’s potential.

Sustainability as a Strategic Imperative

Embracing sustainability is becoming a strategic necessity for organizations. B2B organizations must integrate sustainability considerations into their digital commerce strategies to effectively meet operational objectives, regulatory demands and customer expectations. This includes adopting circular economy principles, enhancing transparency in sourcing, and minimizing the environmental impact of their fulfillment processes.

Digital platforms are also crucial for driving sustainability efforts such as marketplaces for used products that promote recycling and sustainability. An example of these are marketplaces for used EV (electric vehicle) batteries which promotes their effective retrieval and recycling.

Continuous Adaptation and Proactive Compliance Are Key To Thrive

An ever-evolving regulatory and geopolitical landscape requires a proactive approach to compliance and risk management. The stakes are high, with non-compliance potentially leading to substantial economic losses, reputational damage, and loss of customer trust. Thriving in this landscape will require continuous monitoring and adaptation, along with fostering awareness and good compliance practices within organizations

How Can Companies Thrive in This Complex Landscape?

Invest in Digital Technologies That Enable Agility

Embrace an agile approach to digital commerce and strategically align your technology stack. Invest in technologies that can scale and support evolving needs. Composable and API-first solutions can provide flexibility and enable rapid adaptation to evolving market requirements.

Enable Your Workforce to Leverage AI-Enabled Tools

Prepare for an AI-driven future by investing in employee training and change management. This will ensure your workforce is comfortable and proficient in using AI tools across various business functions. When leveraging AI to enhance customer interactions, maintain a balance with human connection. Personal relationships will remain crucial in driving transparency and building trust with your customers.

Understand How Digital Commerce Fits in Your Overall Sustainability Strategy

Begin by assessing how to integrate sustainability into your digital commerce strategy.  This could involve designing metrics to measure your sustainability impact.  A broader approach includes embracing circular economy principles and increasing transparency regarding the sustainable footprint of your products and suppliers.  This allows you to simultaneously satisfy growing customer demand and meet evolving regulatory requirements.

Foster Change Management

Cultivate a data-centric organization where employees are comfortable working with and sharing data to drive data-driven decisions.  Furthermore, promote awareness and compliance practices throughout the organization.  Strategically leverage digital technologies to support your company’s compliance and risk management processes.

Navigating the Future of B2B Digital Commerce

By focusing on these key trends, B2B organizations can navigate complexities and position themselves for success.  An agile approach will be crucial for effectively addressing challenges. The ability to pivot quickly and respond to change will provide a competitive advantage, enabling B2B organizations to capitalize on emerging opportunities and thrive in this evolving landscape.

When it comes to doing business, time isn’t just money — it’s also your competitive edge. Yet many organizations waste this precious asset on IT procurement processes that can stretch six to nine months. That’s a lot of time — and a lot of lost sleep, particularly for today’s CIOs.

As technology rapidly evolves and IT governance takes center stage, the role of the CIO has never been more dynamic — or demanding. Today’s CIOs have transitioned from overseers of IT infrastructure to serving as business strategists, innovators, and drivers of organizational transformation. They’re managing procurement teams, integrating cutting-edge solutions, and addressing legacy system challenges — all while juggling tight budgets and even tighter timelines.

The mandate is clear for 2025: deliver more efficiency and greater strategic value, faster. Yet, traditional procurement undermines this goal, bogging down the process with manual tasks, lengthy approvals, and inefficiencies that slow progress when speed is critical.

Let’s pull back the curtain on some of the key pain points:

Lengthy Timelines: Delays in software sourcing can hold up the launch of new projects — putting organizations at a significant disadvantage.

Legal Bottlenecks: Complexities in contract negotiations and compliance reviews can add significant human-hours to the process and weeks or even months to timelines.

Data Deficiencies: Seventy-five percent of organizations struggle with inadequate data analytics, leading to poorly informed decisions. (Veridion)

Resource Strain: Overestimating the maturity of procurement processes and misjudging workloads can put undue pressure on teams.

Legacy System Integration: Adopting new software while managing outdated systems can be a logistical nightmare.

Supplier Risks: Evaluating vendor performance and mitigating risks can consume significant time and resources.

The list is daunting, but there’s hope ahead.

Strategic Software Sourcing: The AI Advantage

AI-powered sourcing platforms are transforming the process by automating manual tasks, improving decision-making, optimizing costs, and enhancing efficiency. They empower businesses to move faster, better mitigate risks, and make smarter technology investments.

While time is certainly money, it’s also essential to understand strategic sourcing — a proactive and future-centric approach to software procurement. Unlike traditional methods that focus solely on immediate cost, strategic sourcing aligns procurement decisions with sustainable business goals. It emphasizes long-term supplier relationships, total cost of ownership, and demand forecasting.

Strategic sourcing is about thinking ahead. It’s not about finding the cheapest solution; it’s about finding the right solution that delivers value over time. AI supercharges strategic sourcing, addressing major pain points with precision, analytical intelligence — and the all-important speed.

Here’s how AI can help:

Automate Routine Tasks: Routine tasks like data validation, purchase order management, and contract analysis can bog down procurement teams. AI automates these processes, reducing errors and freeing up professionals for more engaging work.

Accelerate Timeline: Efficient and effective AI-driven platforms can cut procurement cycles significantly, enabling organizations to launch projects faster.

Enhance Data Accuracy: Although most organizations use data analytics, less than 20% are satisfied with the results. AI can improve data accuracy and provide actionable insights for better decision-making. (CIOinsight)

Optimize Demand Forecasting: Procurement teams often rely on guesswork when it comes to forecasts. AI can use predictive analytics to ensure the right resources are available at the right time.

Mitigate Supplier Risks: AI can evaluate supplier performance, identify potential risks, ensure compliance with regulations, and increase transparency and trust.

Reduce Costs: By automating much of the process — and freeing teams for more strategic work — AI can help achieve significant cost savings while maintaining high-quality outcomes.

The Bigger Picture

AI doesn’t just make IT procurement faster — it redefines what’s possible. By accelerating access to new technologies, AI fuels innovation and keeps businesses ahead of the curve. Streamlined processes build agility, empowering organizations to adapt to market shifts in real time. And by automating the mind-numbing tasks no one enjoys, AI frees your teams to focus on strategic, meaningful work — the kind that sparks collaboration and creativity.

In a world where every second counts, why waste months on outdated procurement processes? With AI, you’ll not only save time — you might even find some to spare (or catch up on sleep.)

Step Up to Smarter Software Sourcing with IDC TechMatch

IDC is transforming the way IT teams make software investments with a revolutionary new software sourcing platform. IDC TechMatch, powered by AI and grounded in the world’s most reliable IT market intelligence, will simplify, accelerate, and align your IT sourcing decisions.

With IDC’s new AI-driven software sourcing platform, TechMatch, you’ll simplify decisions, optimize spending, and keep your organization ahead of the curve, gaining a strategic advantage over your competitors.

Ready to discover how IDC TechMatch can transform your pain points into game points?

It’s “time” to learn more today.

AI is driving one of the most significant shifts in enterprise technology—but as you’ve seen, just having an AI-powered product won’t guarantee success. Midmarket tech vendors must do more than position AI as an innovative feature; they must prove its real business impact to skeptical tech buyers who don’t know as much about your product. They just know about the world they are entrenched in—which is often very different from yours.

AI Adoption Is Surging—But Buyers Need More Than Hype

AI-related spending is set to reach $371.6 billion by 2027 as businesses shift from experimentation to targeted AI investments.

But tech buyers are demanding more clarity, proof, and measurable business value. They aren’t just looking for AI—they’re looking for vendors who can:

Translate AI capabilities into real-world business outcomes
Provide data-backed proof of AI’s ROI and competitive advantage
Guide them through the AI adoption curve with expertise

For midmarket vendors, the challenge isn’t just selling AI—it’s marketing AI effectively in a way that resonates with buyers.

Your AI Story Needs More Than Features—It Needs Proof

Tech buyers are overwhelmed with AI messaging. What they need is a clear, compelling reason to choose your AI-powered solution over the competition.

AI Features Alone Won’t Differentiate You – The market is crowded with vendors claiming AI superiority. To stand out, you must showcase how AI solves specific business challenges and improves key metrics.
Buyers Want Data-Backed Confidence – 69% of B2B buyers are more likely to engage with marketing content if it’s backed by credible, personalized data. Vendors who provide benchmarks, case studies, and independent validation will gain trust faster.
The AI Buying Journey is Complex – AI isn’t a plug-and-play solution. Buyers need education, implementation guidance, and risk mitigation strategies. The best marketers will position their companies as strategic advisors, not just vendors.

How Midmarket Vendors Can Win in AI Marketing

Lead with Business Value, Not Just Technology

Show how your AI solution reduces costs, improves efficiency, or drives revenue—not just how it works.
Speak in the language of business decision-makers, not just technical buyers.

Back Claims with Data and Real-World Examples

AI skepticism is high—buyers want quantifiable proof of success.
Use case studies, benchmarks, and IDC-backed insights to validate your claims.

Target the Right Buyers with Tailored Messaging

AI adoption varies by industry and business size—a one-size-fits-all approach won’t work.
Identify your ideal AI buyers and tailor messaging to their specific challenges and priorities.
Assess infrastructure readiness—do they have the foundation to support your AI solution?
Highlight key differentiators that make adoption easier, such as AI model training, data labeling, and ongoing support.

Help Buyers Navigate the AI Learning Curve

Offer clear guidance on implementation, integration, and ROI measurement.
Position your company as an expert resource, not just a seller.

AI is Reshaping Tech Buying—Are You Ready?

By 2026, 65% of individuals will rely on GenAI-powered search and engagement. Vendors that adapt now—by refining their messaging, proving AI’s business impact, and guiding buyers through adoption—will win market share.

Move Beyond AI Hype—Lead with Clarity and Proof

The AI market is evolving fast, and midmarket vendors who can position AI as a must-have business enabler—backed by real-world proof—will dominate.

AI alone won’t drive revenue. But the right AI marketing strategy will.

Buyers Don’t Just Need Opinions—To Drive Results, You Need to Offer Them Data-Backed Guidance.

The European Union’s Ecodesign for Sustainable Products Regulation (ESPR) will come into force on June 20, 2025. It will introduce a new framework to make electronic devices more sustainable. This law goes beyond energy efficiency by mandating durability, repairability, recyclability, and extended software support for smartphones and tablets. The ESPR is within the EU’s broader aim to create a circular economy that reduces electronic waste while making sure consumers get access to devices that last longer and can be repaired.

This regulation presents both operational challenges and strategic opportunities for smartphone manufacturers. Complying with it will require significant changes in how they design their products, manage the supply chain, and handle after-sales customer service. While initial costs may rise due to higher material standards and new repairability requirements, manufacturers that quickly adapt could boost their market position.

The Impact on Smartphone Manufacturers

One of the key pillars of the ESPR is durability. Devices will need to meet stricter requirements for resistance to drops, dust, and water ingress. This will likely push manufacturers to redesign their products, particularly when it comes to protecting from water ingression, the second-largest cause of damaged smartphones (Read more about the Impact of Liquid Damages in my article).

While this may initially increase production costs, it can also lead to fewer warranty claims, lower returns, and a stronger reputation for reliability. Brands that embrace this shift early may gain a competitive edge by positioning their products as premium, long-lasting investments.

Battery performance is another focal point of the regulation. To comply, smartphones must maintain at least 80% of their initial capacity after 800 charge cycles. This pushes manufacturers to invest in higher-quality battery technology, potentially leading to innovations such as more energy-dense cells or modular battery designs. Additionally, the push for removable or easily replaceable batteries could reshape product engineering, affecting device thickness and aesthetics. While these changes may add complexity to design processes, they also provide an opportunity to differentiate in a market where battery life remains a critical consumer concern.

Repairability will become a defining feature of future devices. Under the new rules, smartphone manufacturers must ensure that critical spare parts, including batteries, screens, cameras, charging ports, and buttons, remain available for at least seven years after a product is discontinued. Additionally, these parts must be delivered within a maximum of 10 working days, ensuring timely repairs and reducing consumer reliance on device replacements. The legislation also imposes new disassembly requirements, making it easier for professional repairers and, in some cases, consumers to replace damaged parts using basic tools. This prevents manufacturers from using proprietary designs or software locks that restrict third-party repairs—a common industry practice that has previously driven up repair costs and discouraged device longevity.

From a business perspective, these regulations introduce new revenue opportunities in the form of refurbished and certified pre-owned devices. As consumers gain access to affordable repairs and extended product lifecycles, demand for manufacturer-backed refurbishment programs and trade-in services is likely to grow. IDC forecasts that trade-in used smartphone sales will grow on average 6.7% between 2023 and 2028 to reach $94 billion by 2028.

Although PCs are not yet part of this legislation, last year at the Mobile World Congress, I witnessed brands moving beyond the traditional approach of simply incorporating recycled materials and reducing carbon footprints to a more strategic approach of repairability by design (Read more here).

Software upgrades are another crucial area. The ESPR mandates that operating system updates must be available for at least five years after a device is discontinued. This prevents premature obsolescence, addressing one of the most common reasons for smartphone replacements. However, it also presents challenges for manufacturers, particularly those dependent on frequent hardware-software upgrade cycles to drive sales. Companies will need to balance regulatory compliance with revenue strategies. While most brands already provide five-year upgrades on their flagship and premium devices, extending this to mid-range handsets will be particularly challenging for many smaller brands. The six-figure cost reported by some brands will make it impossible to continue offering mid to low-end devices long-term. This will compel them to reduce the number of devices in their portfolios and weaken their position against more prominent brands.

Strategic Implications for the Industry

The ESPR represents a fundamental shift in how the smartphone industry must approach product lifecycle management. Companies that fail to adapt will risk fines, supply chain disruptions, and reputational damage. However, those who proactively integrate sustainability into their core strategies can benefit in several ways.

Early adopters of the regulation can establish themselves as leaders in sustainability, gaining an advantage in a market increasingly influenced by environmental consciousness. With consumers becoming more selective about the sustainability credentials of their purchases, companies that highlight durability, repairability, and eco-friendly design can create strong differentiation.

Furthermore, regulatory alignment is crucial for market access. The EU remains one of the world’s largest and most lucrative consumer electronics markets. Brands that do not meet these new requirements could face import restrictions, compliance-related delays, or reputational setbacks, ultimately losing market share to more forward-thinking competitors.

Supply chain optimization will also become a priority. The emphasis on repairability and spare parts availability encourages a shift from a linear economy model (produce, sell, discard) to a circular economy model, where devices are repaired, reused, and resold. This could lead to new revenue streams in refurbished devices, leasing models, and extended warranty programs. It also means manufacturers must rethink their supplier relationships, ensuring consistent access to high-quality components over a longer period.

The Consumer and Sustainability Perspective

For consumers, the ESPR brings several significant benefits. By ensuring smartphones last longer and can be easily repaired, the regulation reduces the financial burden of frequent device replacements. This is particularly relevant in an era of rising electronic prices, where consumers are looking for greater value from their purchases.

Beyond cost savings, the regulation addresses the growing e-waste crisis. The smartphone industry generates millions of discarded devices each year, with only a fraction being properly recycled. By mandating longer-lasting products, the ESPR directly contributes to waste reduction, minimizing the environmental footprint of smartphone production and disposal. This shift aligns with growing consumer demand for ethical and sustainable technology choices.

Transparency is another key aspect. The introduction of standardized energy labels and repairability scores will allow consumers to make more informed decisions. By having clear, accessible information on battery longevity, durability, and repair costs, buyers can prioritize products that align with their sustainability values and long-term needs.

Conclusion: A Pivotal Moment for the Smartphone Industry

The EU Ecodesign for Sustainable Products Regulation is not just a regulatory challenge—it is a defining moment for the smartphone industry. While compliance will require significant adjustments, the regulation also opens doors for manufacturers to rethink their approach to design, customer engagement, and business sustainability. Manufacturers should view this legislation as an opportunity to innovate and create new business models. This could include offering extended warranties, repair subscriptions, or trade-in programs that incentivize responsible disposal and recycling.

Companies that embrace these changes can build stronger, longer-lasting relationships with their customers while reinforcing their commitment to environmental responsibility. As sustainability continues to shape consumer preferences and regulatory landscapes worldwide, proactive adaptation to the ESPR can serve as a blueprint for future-proofing business models and maintaining a competitive edge in an evolving market.

The Asia/Pacific region, which serves as the world’s largest manufacturing and consumer hub, is expected to continue growing despite challenges such as a sluggish global economy, higher interest rates, material cost inflation, and protectionist trade policies.

Governments across the region, including those of China, India, South Korea, Taiwan, Singapore, Malaysia, and Thailand, are actively supporting the manufacturing sector. They are rolling out initiatives to accelerate digital transformation, improve connectivity infrastructure, and promote green economy practices, opening new opportunities for both manufacturers and technology vendors.

Looking at these market dynamics and technology adoption trends in the region, IDC published its FutureScape Worldwide Manufacturing 2025 Predictions – Asia/Pacific (excluding Japan) Implications report to provide organization decision-makers with an actionable investment plan with respect to technologies as viable enablers.

Each prediction is presented based on timeline projection, complexity assessment, and organizational impact. It also includes insights into regional use cases and examples, as well as the regional outlook for manufacturing over the next five years.

The following are some of the key predictions for Manufacturing in Asia/Pacific (excluding Japan):

AI and Automation: Unleashing Next Level Production Efficiency

Supply chain complexity and competition in Asia are intensifying as manufacturers face mounting cost pressures. The cost of raw materials continues to rise, driven by factors such as global supply constraints, fluctuating commodity prices, and regional demand surges. Shifting customer preferences are leading to shorter lead times and fluctuating order volumes, adding further complexity to an already intricate supply chain.

To overcome these challenges, manufacturers must prioritize flexibility and productivity efficiency to achieve operational excellence and boost their perfect order (PO) rate, a critical metric for fulfilment success.

This sparks a renewed interest in adopting technology solutions to integrate production process with supply chain management. According to IDC’s Manufacturing Industry Core Survey, July 2024; 30% of APAC manufacturers responded that advanced planning and scheduling (APS) solutions significantly contribute to helping their organizations achieve operational KPIs. AI/GenAI, can significantly enhance performance and integration between different systems and processes.  

As a result, IDC predicts that by 2027, resiliency pressures and AI opportunities will drive more than 30% of Asia-based Top 2000 (A2000) manufacturers to invest in new advanced planning & scheduling deployments, leading to PO rates of above 95%.

The Intersection of Complexity and Quality in Modern Manufacturing

Ensuring impeccable product quality is a constant pursuit for manufacturers, demanding constant vigilance and adaptation. The growing complexity of manufacturing processes and materials has resulted in the emergence of a new set of challenges. The rapidly growing variety of potential defects, coupled with limitations of real-world testing data, can impede the effectiveness of conventional inspection systems. These limitations can lead to missed defects, ultimately impacting product quality, consumer trust and may cause the potential risk of regulatory violation.

GenAI can improve quality initiatives in multiple ways. GenAI can significantly streamline data management by efficiently collecting, organizing, and summarizing vast amounts of structured and unstructured data from diverse sources, including design, manufacturing, supply chain, distribution, customer feedback, and service support. This centralized data repository enables AI-powered analysis to identify potential risks, inform decision-making, and optimize processes.

Additionally, through synthetic data augmentation, GenAI can facilitate comprehensive and accurate simulations, aligning product development with stringent requirements and customer preferences simultaneously saving time and resources. As a result, IDC also predicts that by 2028, 40% of APeJ manufacturers will be leveraging GenAI to automate product quality management and improve development time/cost by 10%.

For example, Bosch, a renowned industry leader, has already successfully implemented AI-powered image recognition for quality control. However, given their already high manufacturing standards, acquiring sufficient data on product defects to train their AI system proved challenging. To overcome this limitation, Bosch turned to GenAI, which enabled them to create a vast dataset of synthetic defect images from a relatively small number of real-world examples. This innovative approach accelerated the training of their automated optical inspection systems, allowing for earlier detection of potential issues in the production process.

Leveraging Ecosystem Alliances for Sustainable Growth

Fluctuating market demands and geopolitical tensions, has led to significant disruptions in raw material supply chains. Rising logistics costs and workforce shortage further cause costs and productivity challenges. Manufacturers across the region are compelled to re-evaluate and adapt their supply chain strategies to ensure business continuity. In this context, supply chain reliability has emerged as a critical competitive differentiator, particularly for industries reliant on timely service parts delivery.

Customers today demand high levels of uptime and efficient support, as outlined in their Service Level Agreements (SLAs). Delays in procuring necessary parts can lead to costly operational disruptions. To meet these stringent expectations, manufacturers are expanding their spare parts ecosystems. By ensuring a ready supply of critical components, manufacturers can expedite repairs, minimize downtime, and ultimately enhance customer satisfaction. Customers now seek proactive service, not just reactive repairs. They desire assurance that their equipment will be serviced promptly, enabling continuous operations and reducing risks.

As a result, IDC predicts that, because manufacturers are unable to meet global repair SLAs, by 2028, 40% of A2000 manufacturers will expand its spare parts ecosystem partners across the supply chain to confidently deliver resolution and customer outcomes.

For example, Samsung Electronics has launched an online Supplier Portal to attract potential new suppliers, aiming to strengthen its supply chain and mitigate associated risks. Samsung’s dedicated internal team, the International Procurement Center, operates as the central procurement hub, tasked with identifying top-tier suppliers in strategically important regions across the globe.

Expanding the spare parts ecosystem provides opportunities for revenue growth, as companies can offer premium support packages with prioritized service levels, attracting customers who value reliability. This approach strengthens customer relationships, builds loyalty, and differentiates the manufacturer from competitors by ensuring high standards of service and reduced equipment downtime.

Call for Actions:

Conduct a thorough assessment of business and operational points and develop a phased automation strategy that aligns GenAI/AI investments with business priorities for maximum impact.
Organizations need to evaluate their existing technology infrastructure and identify connectivity gaps to build connected ecosystems to increase process visibility and ensure interoperability and compatibility for successful deployment. It is important to choose the right architecture (on-premises or cloud-based) and data platform that aligns with their specific requirements and have scalability in mind.
Establish a cross-functional data governance team to define data quality standards, implement automated data cleaning pipelines, and enforce strict validation checkpoints at data entry, integration, and model input stages, ensuring AI and GenAI models consistently receive high-integrity data for optimal decision accuracy.
Strategized and establish a robust data governance framework. Consider implementing a centralized data management platform with strict access controls and data privacy policies. Periodically conduct regular data quality checks and audits to review performance and monitor benefits and outcomes from the initiative.

To learn more about IDC’s top 10 predictions for the Asia/Pacific (excluding Japan) Manufacturing Industry, click here. For specific recommendations for tech vendor sales and marketing leaders to understand clients’ priorities and enhance their storytelling and go to market plans, click here.

Get a better understanding of the foundations for advanced AI-driven capabilities to build a future-ready supply chain, attend this on-demand webinar.

Every year certain technology trends stand out. Few bring about as much change across both technology and business operations as much as AI has in 2024. AI has altered the way organizations consider cloud, driving new business and cloud requirements and introducing new use cases. The hype around AI has also created a sense of agency around change.

IDC’s quarterly Cloud Pulse survey (which surveys up to 1,700 cloud buyers each quarter) and the Cloud Adoption Trends and Strategies programs at IDC have been carefully tracking the maturation of cloud. Through surveys and industry conversations, our teams have been gauging the shifts in requirements of cloud buyers. These are the ten standout cloud trends from 2024 that vendors need to be aware of as they look to meet cloud buyer needs in 2025.

Cloud Transformation

With so many organizations looking to modernize and change their cloud, services around cloud migration, integration, and assessment were in high demand. Equally high was the focus on cloud transformation initiatives (many of which come bundled under broader IT transformation projects).

Around 60% of cloud buyers told IDC’s 3Q24 Cloud Pulse Survey October 2024 that their business’ IT or digital infrastructure currently requires major transformation, and 82% said their cloud also required modernization. Hence, 2024 has been a pivotal year for identifying where cloud strategies need to mature or change. The introduction of new AI requirements has added time pressures to the job at hand.

Business Goals Are Now Technology Goals

Cloud transformation may have been an initiative desired by cloud teams in 2023, but it became a driver of the business in 2024 as organizations pivoted to become more digitally – and AI – enabled. Organizations are now thinking like digital businesses, and this is rapidly changing what they require of technology and how they measure tech success.

In 2024, for the first time ever, when asked what their business’ goals were, Cloud Pulse respondents said overwhelmingly the top goals were focused on AI: using AI to drive better analytics; to improve customer experience and to drive better sales. AI is being introduced across most businesses today, and its introduction and close tie to business success means the business is now starting to measure AI and technical projects based on business key performance indicators. Line of Business has also started to have more of a say over cloud adoption decisions. This focus on business performance means that IT teams now need to be ready to pivot themselves as the business environments and requirements change and must have easily understandable reporting tools.

Automate To Overcome Management and Skills Challenges

Cloud is complex. Cloud management is even more complex as organizations adopt hybrid and multicloud strategies. The challenge to fill much-needed roles and retain staff in a highly competitive technology market is another challenge (not unique to cloud). As organizations seek to modernize cloud architectures and adopt AI, they are requiring better cloud management and new skills. This adds load onto already squeezed teams and budgets.

The skills that are most lacking right now (FinOps, containers, and serverless) cover areas that are being addressed in cloud transformation initiatives. Other areas where skills will impact cloud transformation include network automation and cloud orchestration. Many organizations are addressing skills gaps with educational projects (often with a focus on cross training and enhancing DevOps) or turning to professional services. Teams are also being trained in automation, which can drive efficiencies by removing repetitive manual tasks from operations and other teams to free up human resources and reduce costs.

Hybrid and Multicloud Capabilities Are Now Expected

Most cloud buyers will be working with more than one provider, and many are already combining the use of different cloud platforms. In Q3, 2024, 88% of cloud buyers told IDC Cloud Pulse they are deploying a hybrid cloud or are in the process of operating one and 79% are already using multiple cloud providers (this increases to 90% for those most familiar with cloud).

The challenge for many of these organizations is not one of desire to operate across environments and providers but finding vendors that offer true hybrid and multicloud capabilities. Organizations struggle still with interoperability and connectivity. This includes not only the network and challenges such as egress fees but also open APIs, thus requiring contracts that enable the right levels of flexibility. Vendors are starting to address these needs, and the outcome in 2024 has been more dynamic movement of applications or workloads between environments with organizations considering what is the best location for performance and cost.

Advancements in real-time management and monitoring tools will enable more dynamic use across platforms and lead to an increasing focus on edge computing needs. The good news is that hybrid cloud buyers are seen to have very clear advantages over those that have not adopted hybrid cloud: better ROI and faster adoption of new technologies to name a few.

Application Migration (And Repatriation) Becomes More Dynamic

This trend could have also been labelled ‘the resurgence of on-premises environments’ if we only considered the headlines around dedicated cloud use for GenAI requirements. This is not only about GenAI. Organizations are taking more of a right-fit approach to where applications/workloads and data needs to reside, and at varying parts of the application lifecycle. This is especially the case for AI workloads. Dedicated cloud is an important part of this equation for many cloud buyers, but requirements for application migration are as dynamic and diverse as application migration trends.

The biggest migration taking place in 2024 is the shift from traditional environments to cloud. The reasons for migration have shifted as well; in 2024, sustainability and GenAI were new influencers impacting migration trends, on top of efficiency, cost and performance (three reasons for migration in 2023). These migration trends are increasing the requirement for hybrid capabilities. The reasons for selecting a provider for GenAI tells a story around that application’s requirements. The number one consideration when selecting a provider for GenAI is performance and latency, the second is privacy and data protection requirements, and then data access capabilities.

Data Sovereignty Requirements Continue To Drive Dedicated Cloud Interest

The top workloads residing in dedicated cloud in 2024 are CRM, ERM and human capital which tend to deal with sensitive personal data and information. The most added workload in the next two years will be AI lifecycle platforms. It is not just workloads. Of cloud buyers’ data today, 30% is centralized in a data center, 24% is in a remote office/ branch environment and 20% is at the edge (some of this is public cloud but some is in a dedicated environment). 

Dedicated cloud is also now a favored environment for workload backups – especially for business and data management applications. Across every region, between 50% and 70% of cloud buyers want the ability to control where their data resides and increasingly their digital infrastructure as well. This is driving continued interest in dedicated cloud environments and again, placing hybrid high on the agenda with organizations realizing that dedicated cloud comes with a financial, skills, and management burden and does not deliver as fast a path to innovation and scale as public cloud options.

Risk Reduction Becomes Most Important With Disaster Recovery, Resiliency and Security

Security has always been a major concern for organizations doing cloud but with cloud underpinning so much business transformation, resiliency is becoming a more-encompassing area of concern (resiliency includes risk mitigation efforts, security and disaster recovery). When asked what is most important for their cloud investments in 2024, the ability to recover from an event – disaster recovery and backup – was the most important consideration followed by risk management and comprehensive security. This is not all about increasing business reliance upon cloud; uptime of critical environments is increasingly becoming a requirement of industry bodies, regulators, and customers. And outages and security events are now much more public.

Partners and Ecosystems Equal Innovation

The ability to provide ecosystems and partnerships is now a requirement for many organizations deploying or transforming a cloud. Ecosystems cover hyperscale ecosystems, managed service providers, and even industry ecosystems (more organizations now want their providers or their provider’s partners to offer industry and business-specific expertise). It is not only about the breadth of technologies and services offered. It is also about the ability to provide in-country solutions (think of the rise in sovereignty requirements). Cloud is also becoming more complex, and cloud buyers want to offload some of their services burden by working with primary cloud vendors that can ensure their partners across a wide variety of services are highly qualified, experienced and certified. Increasingly they want them to also vet the AI capabilities of those partners. Organizations want assurance that a provider’s partners are not biased to a single platform or provider.

Sales Support and Customer Success Engagements Matter

Through 2024, cloud buyers started to hold more value in customer services and support and they started to demand more from cloud vendor sales teams. The number of engagements with both teams have been up. Around three quarters of cloud buyers engaged their sales and account management representatives at primary providers in 2024 (not surprising given the focus on cloud transformation and the introduction of AI into the business).

Sixty-six percent of cloud buyers also engaged their customer services teams (a figure that was at 53% in 2023) and 84% now have customer services and support bundled into their contracts. Cloud buyers want these teams to be accessible and easy to reach, and they must display technical knowledge and expertise and a strong understanding of the customer’s business. Sales teams will do well if they can also be proactive and offer quick solutions to cloud challenges.

AI Will Happen in and Across Clouds

AI underpins many of the trends seen in cloud throughout 2024. We know vendors are focused on delivering AI solutions, but we still often get asked where buyers are with adoption. By the end of last year, 49% of cloud buyers had deployed predictive AI, 46% interpretive AI and 51% GenAI. Around a quarter planned across each category to deploy in 2025. When asked then who was best positioned to help them to deploy AI, 36% said their primary cloud provider followed by 21% their primary technology and infrastructure vendor (which also offers on-ramps to cloud or their own cloud services).

For training requirements, 23% preferred a dedicated hosted cloud, 23% SaaS platform and 17% public cloud and the same said a dedicated on-premises cloud and edge. The focus remained on dedicated hosted cloud for tuning followed by SaaS and public cloud and a similar trend was seen for inferencing. While hosted dedicated cloud options are favored, public cloud is still being used by about a fifth of respondents across all areas. Most vendors offer flavors of public cloud or access to public cloud and dedicated cloud today – those that do (think of the leading cloud providers) are also ahead with GenAI adoption rates.