When Amazon opens a new store, it’s never just about adding another retail location. The company’s recent launch of a beauty and personal care store in Milan (Amazon Parafarmacia & Beauty store, opened on February 12, 2025) offers fascinating insights into Amazon’s evolving retail strategy and suggests ambitious plans for the European market.

Beyond Digital: Why Physical Beauty Retail Matters for Amazon

Amazon’s choice to open a beauty store is telling. Beauty products represent a unique challenge in eCommerce: customers often want to test, try, and receive personal recommendations before purchasing. By tackling this challenge, Amazon addresses a critical weakness in its digital-first approach to beauty retail.

The Strategic Playbook Revealed

In a recent IDC Link, we discussed how Amazon’s new store prioritizes customer experience and personalization. Our visit to the store reinforced our idea of what Amazon is thinking:

  • Rather than focusing on immediate sales through frictionless checkouts (like Amazon Fresh stores), this location prioritizes customer experience and brand building.
  • The integration of “Place & Learn Stations”, interactive screens through which shoppers can access detailed product information, and a “Derma-bar”, where shoppers receive bespoke skin analysis and expert recommendations, signals Amazon’s understanding that beauty retail requires education and personalization.
  • The carefully curated selection of premium brands suggests Amazon is positioning itself to compete with high-end beauty retailers, not just mass-market stores.

The Bigger Picture: European Market Expansion

The Milan store serves as a strategic launchpad for Amazon’s broader European beauty ambitions. By establishing a physical presence in one of Europe’s fashion capitals, Amazon is:

  • Building credibility as the go-to retailer for the premium beauty sector.
  • Creating a showroom for brands to expand their sales across its European online platforms.
  • Developing a model that could be replicated in other key European markets.

Strategic Implications

Amazon’s physical retail journey began with Amazon Go in Seattle in 2018 and has been one of constant experimentation. The Milan beauty store reveals several key aspects of Amazon’s evolving retail strategy:

1. The company is willing to take a long-term approach, prioritizing customer experience over immediate sales.
2. The company is using physical locations as brand-building tools, not just sales channels.
3. Amazon is tailoring its retail approach to specific product categories rather than applying a one-size-fits-all solution.

We recently mentioned in a LinkedIn post how Amazon strategically leverages physical stores to compete with retail giants like Walmart in the U.S. market (as well as how Walmart is taking new revenue generation approaches from Amazon’s book). This beauty store opening represents another calculated move in the company’s evolving retail playbook.

What This Means for the Retail Industry

For other retailers, Amazon’s beauty store strategy offers important insights. The future of retail isn’t about choosing between physical and digital — it’s about understanding when and how to use each channel effectively. Amazon’s investment in an experience-focused beauty store demonstrates that even a (predominantly) eCommerce pure-play retailer recognizes the value of physical retail when used strategically.

The Milan beauty store is a window into Amazon’s thinking about the future of retail. As the company continues to evolve its omni-channel strategy, this store could serve as a template for how digital giants can effectively blend physical and digital retail experiences in specialized product categories.

If you are interested in knowing more about IDC’s Retail research, visit our website here.

Filippo Battaini - Research Manager, IDC Retail Insights, Europe - IDC

Filippo Battaini is Research Manager at IDC Retail Insights, responsible for the IDC Retail Insights: Worldwide Retail Experiential Operations Strategies program. Filippo’s research centers on the impact of technology as an enabler of omnichannel retail, including the digitalization of physical stores, online-offline integration, and omnichannel commerce architectures. Before joining IDC, Filippo worked at the global research and advisory firm Coresight Research, advising prominent companies and emerging retail technology providers on the transformative impact of technology in the retail sector.

The rapid adoption of GenAI is reshaping cloud computing, offering transformative solutions while accelerating the achievement of sustainability goals. As cloud providers navigate regulatory complexity, escalating costs, and environmental pressures, GenAI is emerging as a critical enabler of innovation and efficiency.

This post explores how GenAI empowers cloud ecosystems to thrive in 2025 and beyond.

Navigating Regulatory Challenges in Cloud Sustainability

Navigating complex and ever-evolving regulatory landscapes remains a challenge for cloud technology vendors. Governments worldwide are implementing stringent regulations to curb carbon emissions and promote sustainable practices.

The EU’s Corporate Sustainability Reporting Directive (CSRD), for example, mandates comprehensive sustainability reporting. The European bloc’s Energy Efficiency Directive (EED) has introduced obligations, especially for datacenter operators, in terms of energy saving and energy efficiency. Noncompliance can lead to hefty fines and damage to a company’s reputation.

GenAI can potentially assist cloud vendors in ensuring compliance with regulations by automating the collection, analysis, and reporting of ESG data. AI can process vast amounts of data from various sources, identify relevant regulatory requirements, and generate accurate and comprehensive sustainability reports.

This not only reduces the administrative burden on cloud vendors but also ensures timely and accurate compliance with regulatory requirements.

Managing Cloud Energy Consumption and Carbon Footprint

According to IDC, global IT datacenter capacity will grow from 180GW in 2024 to 296GW in 2028, and electricity consumption will rise from 397TWh to 915TWh in 2028. Electricity is the largest ongoing expense to run a datacenter.

As the demand for cloud services continues to surge, so does the energy required to power datacenters. This presents a significant challenge for cloud vendors striving to reduce their carbon footprint.

To address this, vendors must invest in energy-efficient technologies and collaborate with energy providers to ensure a steady supply of green energy. An IDC survey found that while 31% of organizations are looking to deploy GenAI workloads in locations able to offer renewable or zero-carbon energy supplies, 31% also say that GenAI workloads are helping the company reduce its overall greenhouse emissions through business-level optimization and efficiency improvements.

AI models can optimize cloud datacenter operations by predicting and managing energy consumption more efficiently. AI-driven energy management solutions can analyze patterns in energy usage, predict peak demand periods, and optimize cooling systems to reduce energy consumption.

Cloud Vendors: Balancing Cost and Sustainability

Cloud vendors are increasingly adopting FinOps and GreenOps. These — along with advanced analytics, AI, and machine learning — will provide better data and insights and increase visibility into cloud resources, resulting in better optimization.

GenAI can analyze spending patterns and recommend cost-saving measures. AI-driven financial models can analyze the costs and benefits of various sustainability initiatives, helping cloud vendors make informed decisions that maximize both sustainability and profitability. For instance, AI might suggest moving non-critical workloads to less expensive storage options or shutting down underutilized instances automatically.

We predict that 60% of organizations will leverage GenAI for sustainable transformation by 2026, reflecting a significant shift toward data-driven decision-making in ESG initiatives.

Conclusion

As we move deeper into 2025, cloud technology vendors are facing a multitude of obstacles in their quest for sustainability. Navigating complex regulatory landscapes, managing energy consumption, ensuring supply chain sustainability, balancing costs, meeting customer expectations, and innovating and optimizing for sustainability are all critical challenges that vendors must address.

GenAI offers a powerful tool to help overcome these challenges and propel sustainability in the cloud tech industry. By leveraging AI, the cloud ecosystem can optimize operations, enhance supply chain sustainability, balance cost and sustainability, drive innovation, and contribute to a more sustainable future.

How IDC Can Help

IDC’s Custom Solutions portfolio can assist cloud ecosystem players in addressing sustainability challenges through tailored services and strategic guidance.

1. Research and Advisory Services: IDC provides in-depth research and expert advice on trends, regulations, and best practices specific to the cloud industry.
2. Custom Market Intelligence: Vendors can gain insights into market dynamics, competitive landscapes, and customer expectations.
3. Strategic Consulting: IDC consultants work with vendors to develop and implement comprehensive strategies, including on “where to play” and “how to win” in the marketplace.
4. Content Marketing Services: We can help create compelling content to communicate the value proposition and enhance brand reputation and customer engagement.
5. Sales Enablement: Equipping sales teams with knowledge, tools, and content helps to effectively communicate the value proposition to customers and stakeholders.

SAP’s new subscription offer, “SAP ERP, private edition, transition option,” expected to be available by 2Q25, will give SAP customers an additional three years to transform their ECC6-based legacy SAP systems.

Customers can subscribe to this new option from 2031 until 2033, as a natural extension of the current extended support period that runs to 2030, which also requires a premium. Mainstream support is set to end in 2027.

The offer is being introduced amid a tense environment for SAP customers. Many organizations have already migrated to SAP’s cloud options: One-third (34%) of European organizations currently use S4/HANA Private Cloud Edition. But many customers are still at the beginning of their transformation path.

According to an IDC study, 17% of European organizations currently have no migration plan, and 7% remain undecided. Another key point is that the RISE with SAP program has attracted only 7% of organizations planning to migrate to S/4HANA in the coming months.

In a blog post, SAP shared further details about the new offer:

• It applies only to ECC — not the entire Business Suite 7 — with SAP validating eligible systems.
• It targets large-scale, complex SAP implementations engaged in the RISE with SAP program.
• Adaptations will be required to subscribe to the new offer, including data transformation efforts and addressing dependencies on third-party technologies. The subscription will be limited to the HANA database.
• Eligible organizations are required to migrate to S4/HANA private edition before the end of the extended maintenance period in 2030.
• SAP emphasizes that this is not an extension of the maintenance period but a new subscription service.

Impacts on Service Providers

As highlighted in IDC MarketScape: European SAP Modernization Services 2024 Vendor Assessment (IDC, December 2024), service providers play a pivotal role in SAP migration and modernization strategies across Europe.

The dual focus of service providers is a key trend: enhancing the value proposition of RISE with SAP while positioning SAP modernization as a cornerstone of broader business transformation. Migration to S/4HANA is framed as a critical step in overall enterprise modernization.

The introduction of this transition option requires service providers to adjust their strategies and emphasize certain services.

Strengthening Assessment and Consulting Services

Developing robust consulting services is crucial for assessing legacy systems. This involves analyzing the current state of the code base, system dependencies, and architecture, and discovering business processes.

By offering in-depth assessments, providers can help orgs build tailored modernization road maps aligned with corporate strategies. Many service providers have enhanced their expertise in process mining, often using tools like Signavio (or Celonis or their own internal tools), and have established dedicated centers of excellence across Europe.

The new subscription offer reinforces the need for these assessments. We believe service providers should:
• Evaluate existing systems for compatibility with SAP HANA (the only supported database).
• Help clients manage third-party software dependencies.
• Develop extended road maps that fit both business objectives and operational constraints.

Additionally, providers will need to guide clients on cost analysis to weigh the benefits of the new offer, particularly in cases where completing the migration by 2030 may not be feasible, or what would be the cost of the transformation with RISE with SAP, including in the new subscription.

Build Long-Term Customer Relationships

The new subscription and extra period should push service providers to start creating long-term modernization plans that balance evolving business needs and IT budgets. This involves fostering deeper client relationships with SAP users targeted by the new subscription.

Integrate AI to Optimize Business Processes

The integration of AI will play a central role in business process transformation by 2025, according to SAP’s roadmap. Service providers can embrace a long-term vision and capitalize on this by offering AI-driven process optimization and further enhancing the value of RISE with SAP.

Providers will need to implement training programs for both developers and end users to ensure broad adoption of new models and systems. This requires repositioning key roles (e.g., SAP developers) to transition from managing highly customized code to supporting externalized, standardized processes under the RISE with SAP model.

Change management will be critical, particularly for organizations with complex processes. They will increasingly demand structured, gradual change management programs from their partners to ensure both technical and organizational readiness.

Enhance BTP and Integration Services

Expertise in SAP’s Business Technology Platform (BTP) has become a market differentiator. The new subscription option will likely push service providers to focus on deeper integration services, AI, and third-party cloud services to rebuild business processes on top of S/4HANA.

For large-scale projects, balancing a “clean core” of standardized processes and customized processes will be critical, making integration via BTP a must-have capability.

Modernize Data Models and Streamline Data Migration

Data modernization is a core component of the HANA migration process. Providers will need to help businesses redesign data models and develop tools and accelerators to streamline the transformation. Many providers are partnering with specialized vendors such as SNP. These efforts will be vital as organizations assess the feasibility and costs of migrating to HANA while leveraging SAP’s new subscription model.

IDC has published a number of documents designed to provide a better understanding of the SAP systems modernization market and the role played by service providers in this context.

These include:

The IDC MarketScape: European SAP Modernization Services 2024 Vendor Assessment (IDC, December 2024) analyzes the positioning of service providers in Europe and their service portfolios when it comes to SAP modernization.
SAP Modernization Services in Europe: Insights from IDC’s 2024 European Cloud Survey (IDC, December 2024) provides insights into organizations’ intentions on the transformation of their SAP systems, in particular the evolution of S4/HANA private edition and public edition implementations in Europe.

Cyrille Chausson - Research Manager, European Application Modernization Strategies - IDC

Cyrille Chausson is a research manager within IDC's European Cloud Innovation, Services and Skills research team. Based in Paris, Cyrille is responsible for IDC's European Application Modernization Strategies research program. In his role, he offers insights into trends, market dynamics, and strategic investments pertaining to application transformation, migration, development, and delivery. Cyrille's research primarily focuses on the opportunities and challenges that application modernization presents to service providers and IT buyers, as they transition to more digital-oriented organization and models.

Multilateralism and collaboration are surrendering to unilateralism, bilateralism, and competition in international relations. In this competitive and volatile geopolitical context, AI has become one of the most popular battlefields for nations competing for economic and security leadership.

Once upon a time, AI technologies were of interest primarily to researchers, tech firms, and specialized business and government teams that used them to help detect fraud, for example. The introduction of GenAI has changed all that, catapulting AI into the consciousness of regular employees and citizens.

Although our understanding of its real impact on business and our personal lives continues to fluctuate between hype and worrying ramifications, one thing is clear: AI is driving political agendas.

Nations are implementing digital sovereignty policies and strategies that encompass AI sovereignty as a bulwark of economic competitiveness and security. Two years after the release of ChatGPT, the world is reaching a climax of these AI sovereignty political power battles.

On January 13, the U.S. Department of Commerce’s Bureau of Industry and Security, still under the Biden administration, announced export controls on advanced computing chips and certain closed AI model weights, alongside new license exceptions and updates to the Data Center Validated End User (VEU) authorization.

The same day, the U.K. Secretary of State for Science, Innovation and Technology presented the AI Opportunities Action Plan, which sets the goal for the country “to provide global leadership in fairly and effectively seizing the opportunities of AI, as the U.K. have done on AI safety.”

One week later, under the new Trump administration, the Stargate Project, a $500 billion four-year initiative to build new AI infrastructure for OpenAI in the United States, was announced. A week after that, the DeepSeek frenzy disrupted financial markets. On February 11, the President of the European Commission announced a plan that aims to mobilize €200 billion for AI. Even emerging countries, like Kazakhstan, are making their own investments.

From an economic competitiveness perspective, political leaders want to promote the growth of the national AI innovation ecosystem and ensure the resilience of their AI supply chains. From a national security perspective, they consider AI a means to protect their countries from kinetic and non-kinetic threats.

In this fast-evolving landscape, three archetypes of AI sovereignty are emerging. Countries’ positioning across the range of archetypes indicates how policy and regulation will evolve and impact technology suppliers.

The Three Archetypes of AI Sovereignty Policy

A full analysis of AI sovereignty policies — and their theoretical foundations in geopolitical strategies or data protection — is beyond the scope of this blog post. However, it is possible to compare archetypes by observing key dimensions, including:

• The strategic posture of the country defines what the nation commits to in the long term.
• The approach to AI governance determines how policymakers make decisions.
• The programs a country puts in place determine how the long-term vision translates into execution.

Taking those dimensions into account, three AI sovereignty archetypes are emerging.

 

Figure 1 — AI Sovereignty Policy Archetypes

  •  Global AI Powerhouses: There are just two global powerhouses: the U.S. and China. They aim for dominance. They have the power to unilaterally make decisions and bilaterally influence partner countries. They prioritize being at the frontier of technology innovation over responsible AI innovation. They take different approaches, however: The U.S. allows the private sector choose whether and how to develop and use AI responsibly and ethically; in China, the national government applies more direct control over private sector practices. Both have the sheer critical mass for heavy investments across the AI value chain, from talent to the raw materials that go into chips manufacturing. They have such a big internal markets, both from the supply and demand perspectives, that they can afford to dictate a “made in …” approach to public procurement.

 

  • Aspirational AI Leaders: This cluster includes countries or regional blocs like the U.K., the EU, and Japan. It is important to note that within the EU, for example, there are nuances in terms of balance between EU multilateralism and partnerships with the U.S. or other countries. These countries aspire to leadership status but they simply do not have the critical mass on their own to dominate. They thus selectively invest in strategic areas, such as AI computing infrastructure for R&D, national security and defense, critical infrastructure protection, and public sector AI use cases. They keep their markets open for collaboration with non-domestic tech suppliers that comply with their regulations. The U.K.’s AI Opportunities Action Plan, for example, acknowledges that “Sovereign AI compute will almost certainly be the smallest component of the U.K.’s overall compute portfolio.” These countries are making a political and strategic commitment to responsible use and safe use of AI by fostering multilateral collaboration, and prioritizing investments in open source, such as the new European Commission plan. They apply a strict approach toward data protection risks. The strict approach to data protection and the ethical use of AI, which inspires policies and regulations like the EU’s GDPR and AI Act, can increase the cost of doing business for international tech suppliers. These countries are also investing in digital inclusion, for instance, by supporting the development of LLMs that cater to minorities.

 

  • Regional Dynamos: This cluster includes countries like Saudi Arabia, India, Türkiye, and Russia that aspire to become the kernel of regional AI economies, under their political influence, while establishing a foundation to influence the global AI market. Saudi Arabia’s National Strategy for AI, for example, aims to “Position KSA as the global hub where the best of Data & AI is made reality” and, by 2030, to compete on the international scene as a leading economy utilizing and exporting data and AI. Some, like Russia, are more aligned with one of the powerhouses. But most regional dynamos take an opportunistic approach to governance and international collaboration to accelerate their economic competitiveness. They are open to non-domestic tech suppliers because they need to fill AI supply chain, AI computing infrastructure, and talent gaps. However, they have set up regulatory and financial incentives to ensure that global tech suppliers commit to making local investments, hire local talent, and collaborate with local partners.

The Silver Lining for the Tech Industry

In a complex and competitive geopolitical environment, tech suppliers that need to make AI supply chain, computing infrastructure, product and solution, talent, marketing, and sales investments should carefully align their strategic choices to maximize the ROI they can realize in different countries and regions.

  • With respect to global AI powerhouses, tech suppliers should prioritize one of them in terms of AI supply chain and AI computing infrastructure. They should leverage closer alignment with that powerhouse as a door opener to strengthen their positioning in partner countries. But they should also continue to observe the evolution of AI innovations developed by opposing powerhouses. This is important to understand how their road map and ecosystem could benefit from those innovations. They should also consider selected reseller agreements to go to market with an opposing powerhouse.

 

  • With respect to aspirational AI leaders, tech suppliers should position the breadth of their AI solution portfolio to show business and government buyers in different countries how their solutions can provide speed of innovation, agility, and scalability. Suppliers can enhance their positioning in these countries by helping local ecosystem players get value out of government AI innovation programs. They should articulate how they can provide tools and practices to help assess the risks of AI and innovate responsibly, in line with ethical principles, security standards, and regulations.

 

  • With respect to regional dynamos, tech suppliers will have to selectively coinvest with local partners in AI computing infrastructure, open innovation hubs to collaborate with partners and customers, and train and hire local talent.

 

Tech suppliers that do not consider these AI sovereignty policies when making strategic decisions risk losing market share — or worse, they may face compliance actions by government regulators.

Massimiliano Claps - Research Director - IDC

Massimiliano (Max) Claps is the research director for the Worldwide National Government Platforms and Technologies research in IDC's Government Insights practice. In this role, Max provides research and advisory services to technology suppliers and national civilian government senior leaders in the US and globally. Specific areas of research include improving government digital experiences, data and data sharing, AI and automation, cloud-enabled system modernization, the future of government work, and data protection and digital sovereignty to drive social, economic, and environmental outcomes for agencies and the public.

The wave of GenAI-based innovations from contact center vendors is impressive, but these innovations will only succeed if customers adopt them. To achieve this, practical issues must be resolved — and the onus is on vendors to address them.

Clear communication about what GenAI entails and how it links to business outcomes is crucial, but this requires overcoming both hard and soft challenges. There is a gap in the market between vendors and the partner community, including service providers, telcos, and all those involved in taking solutions to end users. Many practical requirements can be addressed by partners.

Often, the focus is on deploying partners to sell solutions rather than helping with the foundational layer needed for the success of new technology — in this case, GenAI. Partners, with their long-standing relationships with customers, are well positioned to understand where customers are in their journey and what they need to implement GenAI successfully.

The following are several ways partners can help fill the gaps to make GenAI use a success.

Communicate What Implementing GenAI Entails

Last year, the hype around GenAI made it a priority for business leaders who were often driven by a fear of missing out. This created both a sense of urgency and of desperation. Insufficient time was given to understand the complexity of implementing GenAI, making it prone to failure.

GenAI’s scope is extensive and diverse, and it is a transformative force. It can drive efficiency in contact centers by automating complex functions that traditionally require human intervention.

GenAI-based virtual agents can deliver human-like experiences previously not possible with basic bots or even conversational AI. They can augment human agents by guiding them through their tasks.

Supervisor work can be simplified by automating forecasting, scheduling, and easing performance and quality management processes. Contact center leaders can gain data-based insights for strategic directions.

However, many ifs and buts must be addressed for GenAI to work — and it’s important for customers to understand this before jumping on the bandwagon.

Identify and Overcome Infrastructural/System Challenges

The efficacy of GenAI depends on the existing infrastructure/system, and partners can help identify specific use cases based on the supporting system. For example, some GenAI functions require an organized knowledge base, which is often not available. Therefore, initial use cases should be straightforward.

Some capabilities, such as summarization, do not need extensive data sources or a knowledge base and can be implemented easily, with benefits quickly visible, such as helping agents save time by automating post-call administrative tasks.

Finally, partners can play a crucial role in structuring and consolidating data sources. Where there are infrastructural/system gaps, partners can help fill these gaps as the first step by implementing the right solutions before exploring GenAI use cases.

Fill Skills Gaps

Apart from data sources and supporting infrastructure, having the right skills to drive GenAI is very important. Agents need to be comfortable using GenAI and should be supported with training.

A group of agents could be deployed as champions of GenAI to help colleagues make the best use of the tools and accelerate adoption. Human expertise is also needed to update and maintain the knowledge base, place security guardrails, and monitor results.

Partners can work with customers to identify skills gaps and develop a clear plan to fill them.

Address Human Concerns About GenAI

Use of GenAI does not depend solely on technical aspects. Human concerns about GenAI need to be addressed when contact centers consider such solutions. Partners can help manage this process.

There is persistent fear that GenAI will replace human workloads and agents will lose their jobs. This may lead to resistance and reluctance, which will impact adoption. GenAI is still in its infancy as a transformative technology to handle all customer engagements due to system limitations that pose many risks (e.g., leakage of confidential data or providing incorrect information).

There thus needs to be a clear classification of interactions that can be shifted to virtual agents and those that still need human intervention.

The next question is how will shifting calls to virtual agents impact human agents: Are they at risk of losing their jobs?

If so, these individuals could be placed in different roles. GenAI is creating new roles involving the development and management of AI-based interactions. Human agents can be trained to transition to these new roles, creating new opportunities for career growth and making the job more exciting.

The negative energy around GenAI could become positive.

Develop the Right ROI Accounting for Transformative Changes

ROI is the single most important consideration driving investment in new technologies, including GenAI. However, given GenAI’s transformative power and wide-reaching impact, ROI cannot be viewed conventionally.

There are many intricacies in measuring ROI, and partners can help redefine it for customers. ROI has traditionally focused on monetary benefits: higher revenue and lower costs for a better operating margin.

GenAI can help reduce costs by shifting some traffic to virtual agents, allowing contact centers to save by reducing the number of agents. However, this can be a short-sighted approach for something as transformative as GenAI.

It should not be seen as a tool to reduce overhead costs but to create more opportunities within contact centers. Transferring transactional calls to virtual agents means human agents can focus on calls that require critical thinking, making their jobs more interesting.

GenAI support will help human agents perform better, reducing stress and burnout, meaning they can stay in the role and enjoy it. Customers who receive quick resolutions through virtual agents and do not have to wait in long call queues are more likely to be happy and refer the brand for good customer support.

Customers served by happy agents and who receive personalized service will have an exceptional experience and may share it on social media. The ROI equation should extend to good/exceptional experiences for customers and employees instead of just monetary value.
Service that delivers a good experience will eventually lead to good results.

Change Management and Support with Culture Shift

Contact centers have reached a crossroads where they must shift from old to new ways of working due to changing demands. Partners can help communicate this message clearly, explain why it is important, and put together a concrete change management plan with guidelines.

Today’s customers have heightened expectations for exceptional service. They want personalized, quick, and convenient services, accessible through various channels — text, messaging, websites, social media, email, conventional voice calls—from any device (mobiles, PCs, laptops). Cloud platforms make it possible to consolidate customer data and unify front and back offices to provide integrated and coherent service.

However, none of this will work if contact centers do not prioritize customer experience and appreciate that employees are the driving force. This involves a massive culture shift.

The metrics used to evaluate contact center performance, particularly agents, need to evolve alongside a changing landscape. It is not just about the number of calls answered and their duration, but whether customers felt connected with the agents and had their issues resolved satisfactorily.

To achieve this, agents need to be supported with the right tools, including GenAI-based tools, incentivized through appropriate compensation packages and career growth opportunities, and managed flexibly.

Using GenAI should be part of this equation and driven as part of a culture that prioritizes happy customers.

Conclusion

GenAI is a disruptive force capable of transforming contact centers for the better — but its implementation is complex and needs to be well thought out, covering every aspect of operations. It is not something that can be rushed.

The starting point is realizing that there is a new wave, and the old ways are becoming obsolete. However, this transformation is not easy. Vendors need to explore the opportunity at the pace of their customers, but this may not be the best use of their time — they should focus on innovation. They can collaborate with partners to drive the transformation and lay the foundation, creating a win-win situation for all.

IDC’s contact center research — with its in-depth coverage of the market, including detailed regional views — supports both vendors and the partner community to help drive the adoption of GenAI-based solutions.

Oru Mohiuddin - Research Director - IDC

Oru Mohiuddin is a Research Director in the European Enterprise Communications and Collaboration team. Based in London, she is responsible for IDC’s coverage of Unified Communications and Collaboration in the region. Her work focuses on tracking the markets for premise-based and cloud solutions and new developments and trends, particularly in the light of changing work patterns impacting the traditional mode of enterprise communication. Prior to joining IDC, Oru worked for Euromonitor International, where she focused on Future of Work and technology in the SMB context. She also worked in New York and Bangladesh and speaks English and Bengali. Oru was awarded Chevening Scholarship by the British Foreign and Commonwealth Office to pursue her MSc in International Development from the University of Birmingham. In addition, Oru has a BA from Marymount Manhattan College in New York.

As automation reshapes the contemporary workplace, companies across Europe are facing both technical and cultural hurdles. While there is a strong emphasis on the potential job losses linked to automating routine tasks, it’s equally vital for organizations to re-evaluate their current roles, work methods, and traditional leadership models. This shift is essential for fully leveraging the benefits of AI and promoting long-term innovation, rather than just improving short-term business efficiency.

The following three trends show what the AI-driven work environment in Europe might look like in 2025 and beyond:

1. The need for new leadership models
2. The emergence of new jobs and skills
3. The evolution of work itself

Farewell to Command and Control

By 2026, European organizations that rely exclusively on command-and-control leadership models will see a 20% drop in profitability due to a lack of AI innovation and adaptability.

European leaders are significantly increasing their investments in artificial intelligence, with 88% actively involved in either rolling out or testing generative AI (GenAI) projects in 2024 (source: IDC’s Future Enterprise Resiliency & Spending Survey [Wave 10], October 2024). Successful organizations highlight the importance of providing their teams with AI training and opportunities for practical experience to enhance adoption rates. However, in 2024, 53% of European decision-makers reported that their employees are somewhat to extremely worried about potential job disruptions and losses due to a lack of AI skills (source: IDC’s Future Enterprise Resiliency & Spending Survey [Wave 11], November 2024).

To integrate AI into their business DNA, organizations need to cultivate a culture of innovation that invites input from every level of the workforce. A rigid top-down management approach will stifle creativity and leave employees feeling disconnected. Companies that are stuck in outdated command-and-control structures find it challenging to keep pace with rapid changes, resulting in isolated decision-making that can hinder effective collaboration across departments and potentially lead to a profit decline of about 20%.

Instead, to promote successful AI innovation, businesses must encourage experimentation and embrace new working methods for all staff, not just leadership. By adopting agile and inclusive strategies for AI implementation, companies can benefit from quicker development cycles, improved customer service, and better employee retention. Ideally, this can be achieved through a balanced approach that combines both bottom-up and top-down strategies for AI deployment.

New Skills and Roles

By 2030, due to evolving skills demand, 70% of new job roles in Europe will be directly enabled by AI.

And the transformation won’t stop at just leadership styles. The integration of AI is set to transform roles across all levels of the workforce, with 70% of new positions being directly influenced by AI technology. As highlighted in the IDC’s EMEA Employee Experience Survey, 2024, 63% of European workers anticipate that parts of their jobs will be automated in the next two years. This change will require the acquisition of new technical skills to leverage AI effectively, alongside the development of essential business and interpersonal skills.

For example, new graduates are now moving away from dull, low-skill jobs and instead expect to interact with AI technologies like assistants and advisors. For midcareer professionals and managers, using AI-enabled applications means collaborating more across different departments and overseeing employee skills and career development with a focus on the future of traditional roles. Meanwhile, top executives will benefit from precise and instant access to various performance data and predictive analytics.

Not Just a Tool, But a New Way of Working

By 2027, agentic workflows will reshape how tasks are delivered and performed, impacting at least 40% of knowledge work in European companies and doubling productivity.

However, AI should be viewed not just as a powerful productivity tool (doubling productivity for knowledge workers), but as a driving force for a completely transformed approach to work.

In 2025, companies will explore the world of AI agents and autonomous workflows to improve tasks that have traditionally depended on human skills. Key software and AI service providers will be essential in this shift by adding innovative AI features. The rise of low-code platforms aimed at creating AI agents and workflows will motivate IT leaders in different industries to adopt these advancements, collaborating with business process management (BPM) teams to identify processes that are ready for automation or enhancement.

To realize substantial gains in productivity, it’s vital to extend agentic workflows beyond standard business functions. This should encompass areas such as planning, research, decision-making, content creation, software development, IT setup, performance monitoring, and other specialized activities, as well as collaborative project work. As organizations in Europe navigate this transformation, a comprehensive evaluation of AI agents and agentic workflows will be essential. Achieving success will also hinge on addressing current cultural challenges while leveraging this technology to enhance human capabilities and streamline knowledge work across various sectors.

Wrap-Up

In conclusion, the three work culture trends highlight a shared focus on the relationship between technology and human behavior. While science fiction often portrays a bleak future dominated by AI, IDC presents a more optimistic viewpoint. However, it’s important to acknowledge that apprehensions surrounding emerging technologies like GenAI can greatly influence their acceptance, whether in a positive or negative light.

Organizational leaders must invest time and resources into thoughtfully planning the integration of AI and GenAI technologies, as well as the new roles and workflows they bring. This challenge goes beyond mere technical aspects such as computing, security, hardware, infrastructure, and integration. At its core, it is a challenge centered on people, necessitating a commitment to empowering employees through skill development and the establishment of innovative, redefined career paths.

To learn more about the impact of automation and AI on the future of work in Europe, please access the following resources:

• Webcast: Help Your Customers Deliver Human-First Experiences in the AI-Everywhere Future of Work

• Blog: 8 Future of Work Trends for 2024

Meike Escherich - Associate Research Director, European Future of Work - IDC

Meike Escherich is an associate research director with IDC's European Future of Work practice, based in the UK. In this role, she provides coverage of key technology trends across the Future of Work, specializing in how to enable and foster teamwork in a flexible work environment. Her research looks at how technologies influence workers' skills and behaviors, organizational culture, worker experience and how the workspace itself is enabling the future enterprise.

Survival of the Fittest

Sales is a game of survival. Without sales, a company won’t stick around very long.

What are tech vendors doing to ensure their salespeople are fit enough to survive in today’s red oceans? The simple answer is: Not nearly enough.

Let’s look at some of the biggest challenges in selling in today’s tech markets.

Buyers Are Smarter

Sellers are not as prepared and enabled as the buyers of today. Buyers are becoming increasingly sophisticated in their purchasing processes — and sellers are struggling to keep up. Buyers are better informed about their needs, more prepared to engage with sellers, and more adept at evaluating proposals. This has created an uneven playing field in which buyers hold more power than ever before.

Changing Expectations

Buyers operate with a lot more information than in the past. There was a time where, in B2B sales, much of the buyer’s education hinged on speaking to sellers and gathering insights and sales materials from salespersons. This practice continues in many industries, but it’s either been augmented or replaced by buyers’ own insights. Buyers can independently research and pre-qualify vendors before they ask sellers to demonstrate the value they can offer and provide clear solutions to their specific needs.

Governance and Accountability

With increased buyer expectations, solutions come with increased accountability. It’s not just about investing in products that will deliver a great return, but working with companies that share the same values, ethos, and reputation.

Team Spirit

Buying teams are growing and now include a wider range of stakeholders from across the business. This collaborative approach ensures that diverse perspectives are considered when evaluating new goods and services or renewing existing contracts. The downside is that buying decisions and the sales process are gradually becoming longer — in constrained economic times, even more so.

From Surviving to Thriving

Despite the challenges that salespersons face in today’s competitive marketplaces, it’s not all doom and gloom for those who want to move into sales or are moving into a new sales role in another industry or region. As salespeople mature in their careers, they will see that regardless of where and what they sell, there are few universal steppingstones to sales success.

Put the Human First

The goal of sales is to build relationships with customers, use past successes to build credibility, and work with the customer team to grow and entrench the partnership. Soft skills are often sought in the hiring process but wash out when the pressure mounts and becomes a numbers game. By putting the human first in sales, you can build stronger relationships with your customers and close more deals.

In today’s digital world, much is lost in daily working interactions. Digital tools have made it easier to connect buyers and sellers from all over the world — but they can also make it harder to build relationships like in the past, where much of our business practices of today were formed. In the age of AI, sellers should strive for face-to-face interactions, putting the human first.

Sellers Should be Artisans

Artisans are skilled people who excel at a particular trade or craft. The term is often used to describe those who work with their hands or in a physical environment — but it’s just as apt for what a salesperson should be.

Sales is a lot more practical than it’s made out to be. Sales teams need practical tools and skills that they can immediately apply to their accounts once they’re in the job. Tools can be anything that helps support their role and sales, such as a CRM. Skills encompasses everything from understanding how to do account plans to soft skills such as intercultural fluency, through to knowledge and understanding such as the specific regulations that are impacting the industry in which their customers operate.

Sellers will do well to realize that, when given charge of customers or accounts, it’s an opportunity to shape the future of the customer relationship, much like an artisan turns raw materials into beautiful creations.

Organizations need to provide their sales teams with better raw materials. Sales enablement is not sales training: It is a considered plan to improve performance through education and empowerment, providing sales teams with the right insights, tools, and frameworks to grow presence and success in their customer base.

The goal of sales enablement is to ensure that sales representatives have access to the right information at the right time to successfully interact with current and prospective customers and drive growth within the customer base.

Organizations should focus more on sales enablement and create a discrete function that can deliver sales resources at scale for teams. And salespersons need to be more open to adapting to new ways of doing business and working across and within technologies, industries, and markets.

How IDC Can Support Your Organization’s Sales Enablement

To capture today’s technology buyers, sales and marketing engagement strategies must be aligned. IDC’s Sales Enablement practice empowers organizations to sell more effectively and helps connect and align your marketing and sales efforts. We leverage our deep understanding of vertical, technology, and country markets to deliver programs designed around our clients’ specific enablement needs.

Connecting the Dots

IDC Sales Enablement delivers a considered plan to connect the dots linking your products and services with the right buyers.

IDC can help you:
• Educate sellers on markets, buyer personas, and business challenges
• Facilitate persuasive sales conversations with technology buyers and C-level executives
• Align digital marketing conversations with interpersonal sales conversations

Beyond Enablement

The role of sales enablement has transcended its supporting function to become an indispensable strategic driver of revenue growth. A well-structured sales enablement strategy, supported by purposeful tools, can align an organization’s sales and marketing efforts effectively, nurture customer engagement, and guide prospects through a seamless journey that culminates in higher conversions and enduring customer relationships.