AI-mediated discovery is changing how buyers find information, form opinions and build trust. For marketing leaders, this shift raises new questions about visibility, credibility and influence long before engagement begins.

For a long time, digital discovery felt predictable. Search engines, keywords, SEO and funnels shaped how buyers found information. If content was optimised well enough and distributed widely enough, it would eventually be discovered. That assumption no longer holds. 

In an AI-first economy, discovery is increasingly mediated by intelligent systems that interpret intent, assemble knowledge and prioritise answers across fragmented sources. This shift is subtle but profound. It changes not only how buyers find information, but also when relevance is established and where influence is formed. By the time buyers engage directly, their understanding of the problem space, the category and the credible players is often already shaped. 

IDC research shows that discovery is evolving from a tactical marketing activity into a strategic capability. Visibility, credibility and authority are formed earlier, indirectly and through systems that organisations do not own or control. 

From finding information to making sense of it 

Traditional discovery models are reactive. They respond to explicit queries and rely on static indexing and keyword logic. In practice, they answer what users ask, not why they are asking. 

Agentic AI introduces a different logic. Instead of retrieving information once, these systems reason about intent, refine discovery paths, validate relevance and adapt outcomes over time. Discovery becomes a continuous sense-making process rather than a single interaction. This distinction matters because most discovery is not transactional. Buyers are trying to understand problems, compare approaches and frame internal conversations long before any commercial intent becomes visible. By the time evaluation begins, discovery has already shaped expectations, trust and default assumptions. 

In this context, relevance is no longer defined by ranking alone. What matters is whether perspectives, knowledge and data can be interpreted by AI systems as credible, useful and meaningful in answering real buyer questions. 

Why discovery has become a brand issue

As AI systems increasingly summarise, synthesise and prioritise information, they also shape perception. Every generated answer reflects a series of decisions about which sources are trusted, which viewpoints are included and which providers are referenced or excluded. Over time, these decisions influence how markets understand categories, solutions and leadership. Discovery therefore becomes the new front line of authority. Even when buyers are not ready to engage commercially, early informational moments shape narratives and build trust long before demand materialises. Organisations that fail to appear in these moments risk becoming invisible, regardless of innovation or execution quality. 

At the same time, many discussions about discovery still rely on outdated assumptions. Discovery is often equated with visibility, SEO or personalisation. In reality, these are outcomes, not the system itself. Agentic discovery does not replace human judgement, nor does it automate buying decisions end to end. It reshapes how relevance is constructed, combining machine reasoning with human context in a continuous feedback loop that begins well before any buying process formally starts. This shift challenges go-to-market models that assume discovery can be compressed into campaigns, launches or early funnel stages. 

The European dimension: trust and responsibility

In Europe, discovery carries additional weight. Trust, transparency and data privacy are not only regulatory requirements, but strategic differentiators. As agentic AI matures, organisations that embed governance, GDPR compliance and transparency into how their knowledge is structured and surfaced are better positioned to build long-term credibility. 

In this environment, relevance is shaped not only by technological capability, but also by responsibility. Discovery becomes both a performance challenge and a trust challenge. 

What this means for marketing leaders

Marketing is not becoming obsolete. It is being redefined.

In an AI-first economy, discovery rewards organisations that invest in structured, machine-readable knowledge, align content with buyer intent rather than campaign logic, and connect content, data and orchestration more deliberately. Linear funnels and campaign-led journeys struggle to reflect how buyers actually navigate information today. The challenge for marketing leaders is no longer how to push content more efficiently, but how to remain relevant inside AI-mediated discovery processes they do not fully control. 

These shifts raise practical questions many teams are only beginning to confront. How do AI systems decide which sources to trust? What makes content discoverable in agent-driven environments? And how should go-to-market strategies adapt when discovery happens long before engagement? 

Ornella Urso - Research Director, IDC Retail Insights - IDC

Ornella Urso is Head of IDC's Retail Insights team and leads the Customer Experience research group in Europe. Urso conducts market research, industry analysis, and proactively contributes to the definition of thought-leadership at the intersection of businesses priorities and technology innovation in B2C and D2C strategy companies. In her role, she is responsible for the delivery of research reports, custom projects and offers strategic direction and advice to both technology providers and IT and business executives of global brands.

In January, Carla Arend, Rahiel Nasir and Luis Fernandes presented IDC’s predictions for cloud in 2026 and beyond. Below is a summary of the main points that were made in the webcast.

The need for digital resilience has never been more crucial

  • Tariffs, supply chain glitches, regulations, skills shortages… digital organisations are being assaulted from all sides.
  • For the majority of EMEA organisations, maintaining operational resilience and cyber security is the top priority.
  • To survive, organisations need to ensure their tech stack is robust and assess the strengths of their tech partner ecosystem. Adaptability and financial stability will also be key weapons to add to the armoury.

Digital sovereignty could help

  • Around half of organisations in EMEA have increased interest in implementing digital sovereignty solutions due to all the geopolitical uncertainties, such as trade tensions, regional conflicts, and regulatory shifts, witnessed in 2025.
  • Digital sovereignty solutions offer data owners complete control and autonomy over their digital assets – maintaining operational resilience is a key tenet of sovereignty.
  • Governance, risk and compliance solutions will be the key focus for organisations looking for sovereign cloud providers, especially for their AI. This will help them reassess their cloud provider options, determine the right IT venue for their workloads, and help to create a more robust tech stack.

The right venue for AI workloads

  • Enterprises are shifting to specialized AI providers and edge infrastructure to maximize performance and efficiency.
  • By 2028, physical AI use cases will experience explosive growth with cloud providers powering the bulk of these deployments at the edge with industry-specific AI agents and high-performance edge infrastructure.
  • By the end of this decade, at least 30% of advanced GPU needs will be met by specialised AI cloud providers offering true cloud features, flexible pricing, APIs, and software services (unlike GPU-only providers).

 AI and cloud modernisation

  • Cloud modernisation continues while legacy systems are re-platformed for AI, using autonomous agents to automate operations and orchestration.
  • Over the next two years, more than half of enterprise apps will leverage SaaS platforms to orchestrate predefined app functions and AI agents for real-time workflows, enabling modular and interoperable solutions.
  • By 2030, 45% will use cloud AI-infused tools to assess cost and performance metrics to optimise workload placement. Furthermore, a fifth will use AI agents to automate workload orchestration.

 Recommendations for cloud users

  • With geopolitical turmoil continuing into 2026 (and probably beyond), organisations are advised to take a risk-based approach to their cloud and AI strategies.
  • Choose the most appropriate venue for your workload. This should be supported by a hybrid and multicloud ecosystem of partners who offer services tailored to your needs.
  • The time to modernise your cloud estate to get ready for AI is now.

Watch the European cloud predictions webcast here:

For the EMEA FutureScape predictions webcast, click here.

If you would like more information on any of the above, please drop your details in here.

Rahiel Nasir - Research Director, European Cloud Practice, Lead Analyst, Digital Sovereignty - IDC

Rahiel Nasir is responsible for leading and contributing to IDC's European cloud and cloud data management research programs, as well as supporting associated consulting projects. In addition, he leads IDC's worldwide Digital Sovereignty research program. Nasir has been watching technology markets and writing about them throughout his professional life.

Work in 2026 is being rewired around human-AI teams, where people who learn to collaborate with intelligent systems are gaining a clear edge in productivity, creativity, and career growth. IDC’s latest FutureScape and Future of Work insights show that this is no longer a distant trend but the operating reality for leading organisations worldwide.

The new shape of work

According our 2026 Futurescape for the AI-enabled Future of Work around 40% of roles in the G2000 will involve direct engagement with AI agents by 2026, fundamentally reshaping how entry, mid-level, and senior jobs are designed. In Europe specifically, we expect around 70% of new positions to be directly influenced by AI, blending technical fluency with human-centred capabilities like problem solving, empathy, and domain expertise.

AI is simultaneously and subtly absorbing much of the background work. Our analysis suggests AI tools can save workers over 40% of their typical workday, with IT workers gaining up to 45% of their time back as routine tasks are automated. Instead of spending hours on status reports, basic analysis, or rote documentation, employees can focus more on designing solutions, making decisions, and collaborating with customers and colleagues.

Agents as instruments, not co-workers

One of our most important messages though is that AI agents should be treated as instruments that extend human capability, not as synthetic co-workers to be managed like people. When AI is framed as a powerful tool in a human-led process, organisations are less likely to over-automate and more likely to invest in skills, governance, and thoughtful workflow redesign.

This mindset shift is already visible in how leaders talk about AI “co-pilots” across development, operations, and knowledge work. We predict  that as agentic AI matures, organisations that focus on measuring and improving AI–human collaboration, rather than just raw productivity, will see margin gains of up to 15% by the end of the decade.

The skills crunch: $5.5 trillion on the line

The biggest drag on this transformation is no longer the technology but the skills to use it well. Our data shows that over 90% of global enterprises will face critical skills shortages by 2026, with AI-related gaps alone putting up to $5.5 trillion of economic value at risk through delays, missed revenue, and quality issues. Yet in our Global Future of Work Decision Maker only about a third of organisations say they are fully ready for AI-driven ways of working, and just a similar share of employees report receiving any AI training in the past year.

This imbalance is already reshaping labour markets. The 2025 IDC Employee Experience survey shows that that 66% of enterprises are reducing entry-level hiring as they deploy AI, and 91% report roles being changed or partially automated. Routine-heavy junior tasks are disappearing fastest, while demand grows for roles that can design, supervise, and continuously improve AI-infused workflows.

How to ride, not resist, the wave

For leaders and professionals, the 2026 question is not “Will AI take my job?” but “How quickly can my organisation and my skills adapt to human–AI collaboration?”. Our research into AI, automation, and Future of Work points to a few practical priorities that separate frontrunners from the rest.

  • Build AI literacy for everyone, not just specialists: core skills now include prompt design, interpreting AI output, and knowing when to override or escalate decisions.
  • Redesign roles around human strengths: shift job descriptions toward judgment, creativity, relationship-building, and cross-domain problem solving, with AI handling repeatable analysis and orchestration.
  • Invest in trustworthy data and governance: companies that neglect high-quality, AI-ready data will see productivity fall behind as they struggle to scale agentic solutions.
  • Measure collaboration, not just output: by 2029, organisations that track and optimise human–AI collaboration are projected to enjoy up to 15% higher margins than those that chase automation alone.

Work has been rewired, but the most valuable node in the system is still the human at the centre of an intelligent network of tools, agents, and collaborators. In 2026, the winners will be those who treat AI not as a threat or a crutch, but as a force multiplier for distinctly human ambition.

To watch our EMEA FutureScape predictions presentation, click here.

If you have any questions, please drop them in this form.

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.

AI will continue to shape the enterprise communications landscape in 2026, with organisations seeking practical value while navigating cost, governance, and deployment constraints. Interest in AI is high, but companies still face gaps around affordability, readiness, and real-world use cases. As a result, the market will progress through grounded, incremental steps, supported by stronger data foundations, evolving pricing models, and greater collaboration across ecosystems and service partners.

1. AI Adoption Will Remain Pragmatic and Focused on Clear ROI

AI will continue to gain momentum, but organisations will prioritise capabilities that deliver immediate, measurable value, such as summarisation, transcription, call insights, and automated follow-ups.

While interest in agentic AI grows, mainstream adoption will be limited by cost and narrow use-case readiness. Vendors will increasingly focus on making agentic capabilities more affordable, modular, and easier to deploy.

2. Data Foundations Will Become the Enabler for Context and Automation

As organisations look into value extraction, data quality and connectivity become essential. AI will need access to contextual, structured, and cross-functional data to deliver accurate outcomes and automate workflows.

To meet these needs, vendors will open their ecosystems, deepen integrations with CRM, ERP, and workflow tools, and begin supporting agent-to-agent orchestration (A2A/MCP) across front-, mid-, and back-office processes.

3. Pricing Models Will Evolve to Reflect AI Consumption Patterns

As AI features become more widely used, traditional subscription pricing will feel less aligned with the way organisations actually consume AI. Vendors will gradually introduce usage-based or metered models, allowing customers to scale AI adoption at their own pace.

To ensure reliability, AI will increasingly blend generative and deterministic approaches, supported by stronger AI observability to maintain accuracy and trust.

4. Verticalisation and Professional Services Will Help Close the Adoption Gap

AI adoption challenges vary significantly by industry. In 2026, more vendors will develop vertical-specific UC&C solutions that reflect distinct workflows in sectors such as healthcare, retail, financial services, and manufacturing.

Because the gap between vendor innovation and customer adoption persists, vendors will collaborate more closely with professional services providers who can translate innovation into practical transformation through guided deployment and workflow redesign.

5. Europe Prioritises Hybrid Deployment and Democratized AI for SMBs

In Europe, concerns around data sovereignty and transparency will continue to influence technology decisions, prompting sustained interest in private cloud and selective retention of on-premises components. Most organisations will move toward hybrid models that offer both innovation and control.

At the same time, European vendors will intensify their focus on SMBs, which represent the bulk of the region’s economy. 2026 will see continued efforts to democratise AI, offering simpler, lighter-weight solutions—such as AI receptionists—as well as modular capabilities that make AI adoption accessible to smaller businesses via partner-led delivery.

Conclusion

In 2026, enterprise communications will move forward through practical AI adoption, deeper data integration, flexible pricing, verticalised innovation, and hybrid deployment models. Markets like Europe will emphasise sovereignty and SMB accessibility, but globally, success will depend on vendors balancing innovation with pragmatism—offering AI that is trustworthy, affordable, and genuinely transformative for how people and organisations communicate and work.

For more information, drop your question in here.

For more predictions, watch IDC’s EMEA FutureScape predictions webcast here.

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.

Graham Fruin - Senior Research Analyst, European Enterprise Communications and Collaboration - IDC

Graham Fruin is a senior research analyst in IDC's European Enterprise Communications and Collaboration team. Based in the U.K., his primary focus is on the voice and data connectivity markets. His work has a particular emphasis on the migration from legacy voice solutions to IP-based platforms and the way they are used in conjunction with unified communications. In addition, he analyzes the evolution of the internet access market, which includes the rapid proliferation of Fiber to the Premises (FttP) across Europe.

In December 2024, one year ago, Microsoft CEO Satya Nadella declared on the BG2 podcast that “SaaS is dead.” The comment set off a shockwave across the technology industry and many felt provoked. After all, software-as-a-service (SaaS) has defined enterprise computing for nearly two decades, representing a massive share (over 10% according IDC’s Black Book) of IT spending in 2024 and forming the backbone of digital transformation strategies worldwide.

Yet, when we cast a cold IDC analytical eye beyond the provocative statement, a crucial truth emerges: SaaS, as we know it, is being disrupted, not by decline but by evolution.

The Status Quo: SaaS at Its Peak

Today, most of the world’s leading software vendors are, in some form, SaaS companies. Among the ten most valuable software players, including Microsoft, Salesforce, Oracle, SAP, and Shopify, SaaS delivery models dominate. Enterprises have grown dependent on the SaaS ecosystem, licensing countless applications to manage HR, payroll, CRM, expenses, and vertical industry workflows.

However, the sheer sprawl of SaaS adoption has created complexity for business users. Employees navigate dozens of interfaces daily, shifting context between multiple systems that rarely communicate smoothly. Despite efforts to simplify workflows through integrations and APIs, SaaS remains a patchwork of interfaces and data silos, forcing users to adapt to the software rather than the other way around.

The Complexity Problem and the AI Opportunity

This complexity is the Achilles’ heel of the SaaS model. Each SaaS application demands its own learning curve and user interface, often used sporadically and inefficiently. In this environment, AI offers a compelling remedy.

Instead of navigating multiple dashboards, users could interact with agent-driven, conversational interfaces that perform tasks across systems. Imagine instructing an AI agent to “approve last week’s expense reports” or “generate next quarter’s sales forecast” and having the agent orchestrate workflows across HR, finance, and CRM systems behind the scenes.

This agentic, “flow-of-work” user experience could replace much of today’s direct interaction with SaaS applications. The result? AI as the new interface layer, which is one that abstracts away complexity, automates repetitive processes, and redefines how enterprises consume software.

The Disruption: From Seats to Outcomes

Such a shift has profound implications for how SaaS is bought and sold. The traditional per-user, per-month licensing model becomes increasingly obsolete as digital labor replaces manual interaction. IDC predicts that by 2028, pure seat-based pricing will be obsolete, with 70% of software vendors refactoring their pricing strategies around new value metrics, such as consumption, outcomes, or organizational capability (please see IDC FutureScape: Worldwide Agentic Artificial Intelligence 2026 Predictions, IDC #US53860925, October 2025).

This agentic IT disruption will impact IDC’s existing forecasts for the various levels in the IT stack differently as shown below. Also, the impact will change over time, as for examples SaaS Applications and IT Services will feel a negative impact in the short term, while recovering if we look five years out to 2030.

For infrastructure hardware, IDC sees a different impact with a short term boost, followed by headwinds as inference costs drop exponentially.

Source: Charting the Agentic Future: 10 Vision Statements for 2030 (IDC #US53909225, November 2025)

Inside the enterprises, this evolution changes the economics of enterprise software. Companies optimizing AI agent development to reduce licensing costs will need to revisit their roadmaps as vendors adjust to these emerging pricing paradigms. Meanwhile, process owners may gain more flexibility, designing application-neutral operational efficiencies that transcend the limitations of current SaaS systems.

Business and IT Implications

The rise of AI agents doesn’t just alter pricing, it transforms how technology functions within organizations.

From a business perspective, enterprises may initially lose the tactical benefit of reduced software costs but gain strategic control over innovation and process optimization. Process teams will design workflows around end-to-end outcomes rather than application silos, supported by a new breed of “headless” software modules accessible via APIs and marketplaces.

From an IT standpoint, this means a fundamental re-architecture of the enterprise tech stack. Where today’s stack is built around SaaS interfaces, tomorrow’s will revolve around AI agents that interact with modular backend services. Data lakes and live data connections become critical enablers, while vendor relationships evolve from UI-centric engagement to agentic enablement partnerships.

Guidance for Technology Buyers

For IT and procurement leaders, this transformation demands foresight and experimentation. Buyers should assume that software vendors will increasingly position their offerings to accommodate or counteract the impact of digital labor.

Before adopting agentic systems, IDC advises enterprises to:

  • Build proofs of concept (POCs) and define clear ROI metrics around cycle time, productivity, and revenue improvements.
  • Evaluate end-to-end process efficiency, not just individual task automation.
  • Explore packaged AI agents offered by existing SaaS vendors, integrating them as part of broader operational redesigns.

In other words, the transition to AI-driven enterprise software should be intentional, data-backed, and aligned with measurable business outcomes.

The Road to 2030: SaaS Reimagined

By the end of this decade, the enterprise technology landscape will look radically different. The AI agent will become a new enterprise SKU, purchased via marketplaces and powered by modular backend capabilities rather than monolithic SaaS platforms. User interfaces will still be critical to productivity but so will orchestration of more-or-less autonomous workflows.

SaaS is not dead, but it is metamorphosing. The software industry is entering a new chapter defined by AI, automation, and outcome-based economics. For vendors, it’s a challenge to reinvent their business models. For buyers, it’s an invitation to rethink how software delivers value.

Either way, the next generation of enterprise technology will be less about screens and more about agents.

Got a question? Drop it in here.

You may be interested in listening to IDC EMEA’s predictions for 2026 and beyond.

Bo Lykkegaard - Associate VP for Software Research Europe - IDC

Bo Lykkegaard is associate vice president for the enterprise-software-related expertise centers in Europe. His team focuses on the $172 billion European software market, specifically on business applications, customer experience, business analytics, and artificial intelligence. Specific research areas include market analysis, competitive analysis, end-user case studies and surveys, thought leadership, and custom market models.

As we approach 2026, enterprise networking in Europe, the Middle East, and Africa (EMEA) is at a pivotal moment. The findings from IDC’s 2025 EMEA Enterprise Networking and Life-Cycle Services Survey reveal a landscape shaped by rapid technological change, evolving security threats, and a complex macroeconomic environment. Here’s what organizations, partners, and technology suppliers need to know about the strategies and priorities shaping the future of enterprise networking in the region.

Investment Priorities: Security, AI, and Wi-Fi 7

Security remains the undisputed top priority for EMEA enterprises. With the rise of sophisticated cyberattacks and new regulatory frameworks such as NIS2 and DORA, organizations are doubling down on network security investments. This focus is not just about compliance, it’s about ensuring business continuity and resilience in an unpredictable world.

A notable shift in 2025 is the surge in networking investments to support AI workloads. For the first time, “networking for AI” has become the second-highest investment priority, reflecting the growing adoption of AI-driven applications and the need for robust, high-throughput, and low-latency infrastructure. While many organizations are still defining their AI use cases, there is broad consensus that network architectures must evolve to support these new demands, particularly in datacenters and cloud environments.

Wi-Fi 7 is also gaining momentum, with many enterprises planning to leapfrog Wi-Fi 6/6E and move directly to the latest standard. The promise of higher speeds, improved device density, and enhanced security is driving aggressive deployment targets, especially in Western Europe and the Middle East & Africa.

The Macro Environment: Growth Amid Uncertainty

Despite ongoing geopolitical tensions, inflationary pressures, and energy cost volatility, the outlook for networking investments in EMEA is positive. IDC’s survey shows that nearly 60% of enterprises expect to increase their networking budgets in 2025, with the strongest growth among large organizations and in verticals such as manufacturing and business services. However, budget scrutiny remains high, and organizations are seeking to optimize costs while modernizing their infrastructure.

The Role of Automation and Services

Automation and AI-driven operations are increasingly seen as essential for managing network complexity and addressing skills shortages. Yet, the survey reveals that most organizations are still early in their automation journey, balancing manual processes with emerging automation tools. The appetite for “self-driving” networks is growing, but cultural and technical barriers persist.

This is where life-cycle services and managed services come into play. Enterprises are relying on integration, deployment, and support services to bridge skills gaps and accelerate technology adoption. The use of cloud-managed platforms is expanding, valued for their ability to improve visibility, user experience, and security.

SD-WAN, SASE, and the Convergence of Networking and Security

SD-WAN adoption continues to rise, but many organizations are re-evaluating their technology vendors, seeking better AI capabilities, security features, and cost optimization. The convergence of networking and security is accelerating, with Secure Access Service Edge (SASE) models gaining traction, especially where networking and security teams are closely integrated.

Looking Ahead

The EMEA enterprise networking market is forecast to grow steadily through 2029, driven by AI, cloud, and the ongoing refresh of campus and datacenter infrastructure. Success in this environment will require agility, a focus on security and compliance, and a willingness to embrace new technologies and service models.

IDC’s EMEA Networking and Life-Cycle Services research program continues to track these trends, providing actionable insights for enterprises, partners, and technology suppliers navigating this dynamic landscape.

If you have any questions, drop them in this form.

Len Padilla - Senior Research Director, European Networking and Life-Cycle Services - IDC

Len Padilla is a senior research director for IDC's European Networking and Life-Cycle Services program, focusing on the enterprise and telecom segments. Before joining IDC in 2022 he spent 21 years on the service provider side of networking at NTT, from operations to engineering to portfolio marketing. He built and operated multidatacenter networks across Europe and a global content delivery network, and he was early to cloud computing with a 14-site public cloud infrastructure that spanned 10 countries. Most recently he was part of a portfolio marketing team that oversaw the integration of 28 companies, service lines, and brands.

As AI systems grow more capable, their ability to interact with and automate the physical world depends on real-time, granular data — like knowing the exact location and condition of every item in a warehouse, or tool on a factory floor. Ambient Internet of Things (IoT) could unlock that capability.

This shift toward real-world sensing demands a new class of IoT devices — affordable, scalable, and battery-free. Traditional IoT devices are too costly and complex for pervasive automation. That’s where Ambient IoT enters the picture — not just as a new device class, but as a foundational layer for sensing the physical world.

Ambient IoT can sense the physical world

Ambient IoT is a key part of 5G-Advanced, the next phase of 5G evolution. Release 19 of the 3GPP standards, expected to be finalized by the end of 2025, formally introduces Ambient IoT as a new device class, enabling ultra-low-power, battery-less communication.

Whereas many mobile standards are pushing for higher bandwidths and more advanced capabilities, Ambient IoT is aiming for the simplest mobile-connected devices possible. The vision for Ambient IoT is for extremely cheap, printed tags to be used on virtually everything. Ambient IoT tags use so little energy that they don’t need batteries, drawing power from ambient sources. Similar to radio frequency identification (RFID), a small printed tag can be attached to an item, enabling it to receive power from ambient radio waves and transmit its location and conditions, such as temperature or humidity.

How low can the costs go?

The economics of Ambient IoT are what make it truly transformative. If tags could be produced cheaply enough, Ambient IoT tags could be placed on every item moving through a supply chain, every product in retail, and every asset, person, safety device, and tool in a factory. Huawei Wireless believes volume prices of the tags could be as low as $0.50 each in 2027, and down to $0.10 each a couple of years later, making widespread tagging feasible.

What makes Ambient IoT revolutionary compared to RFID?

While Ambient IoT shares RFID’s ultra-cheap and battery-less features, the standard aims for superior capabilities:

  • Real-time visibility: Continuous data streams versus point-in-time scans
  • Extended range: More than 100 meters range versus less than 10 meters
  • Higher accuracy: Over 99.99% inventory accuracy versus 90%
  • Positioning: 5-7 meters, with expectations to improve over time

Small devices, huge impact

These features are compelling for tracking individual items, but at a systemic level — tracking billions of items — Ambient IoT takes on larger meaning. It can provide real-time visibility for location, conditions and motion of everything in a facility, and eventually across the wider mobile network. That data can power digital twins, enabling real-time monitoring, management, optimization, and eventually automation of complex systems.

Addressable market

The market for Ambient IoT is potentially enormous. Tags may start on valuable objects like pallets and forklifts, then move to item-level tagging. There are hundreds of billions of packages, tools, and assets that might be tagged, and eventually trillions of consumer goods.

Key use cases

Ambient IoT will bring major benefits across diverse use cases:

  • Supply chains: Real-time management and automation to ensure inventory is in the right place at the right time.
  • Warehouses and retailers: Continuous, high-accuracy inventory.
  • Food tracing and pharmaceuticals: Cold chain monitoring and item traceability for safety and compliance.
  • Hospitals: Tracking patients, assets, and staff to boost utilization and reduce delays.

When will Ambient IoT be ready?

The  industry expects Ambient IoT to be quick out of the gate. The standards will be published within weeks, and much of the ecosystem is ready. Additionally, tags are available, there are mobile indoor base stations that can support it, and already Chinese operators have shown that connectivity management platforms can support it.

Telcos should explore Ambient IoT

While 5G-A brings many advanced capabilities, mobile operators shouldn’t overlook Ambient IoT. Telcos can support it with little new cost. They will need to develop new pricing models for supporting low-cost tags, but the aggregate benefits for enterprises are enormous. Operators should explore the potential of this new technology.

Conclusion

Ambient IoT isn’t just a technical innovation — it’s a strategic enabler for the next wave of automation and intelligence. As 5G-Advanced evolves, Ambient IoT could become the invisible infrastructure powering real-time visibility, operational efficiency, and AI-driven decision-making across industries. The time to move is now.

If you have a question about anything, please fill in this form. 

John Gole - Director, European IoT and Mobility - IDC

John Gole leads IDC's European Internet of Things (IoT) research as well as researching the mobile industry growth opportunities. He provides research and consulting on these topics to suppliers and enterprise technology users. Prior to this role, John managed IDC’s telecommunications, IoT, and mobility businesses for Central and Eastern Europe, the Middle East, and Africa. John is a frequent speaker at industry events. He also mentors start-ups on Prague’s start-up scene.