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.

As organizations navigate an era defined by economic uncertainty, geopolitical shifts, and relentless technological change, one truth stands out: the future belongs to those who can harness AI, automation, and sovereignty to build resilience, drive innovation, and unlock growth. The theme of this year’s IDC EMEA FutureScape predictions  webcast – The Agentic Business Future – is about technology; but also readiness, governance, and a human-centered approach that transforms ambition into measurable business value. 

IDC defines the Agentic Business Future as a fundamental transformation of enterprise operations, customer experiences, and business models driven by the widespread adoption of AI agents and agentic workflows. Agentic workflows are processes involving AI agents capable of planning, using tools, perceiving their environment, and remembering past interactions to improve performance. These agents autonomously execute complex tasks, make decisions, and interact in human-like ways, enhancing operational efficiency and decision-making. Unlike traditional AI, agentic AI can collaborate, trigger actions, and adapt dynamically, underpinning new operating models and real-time orchestration across the enterprise. 

Our IDC European CIO Xchange Survey (2025) reveals that 85% of EMEA CIOs are already exploring agentic use cases or piloting intelligent agents within isolated departments. The challenge now is to move beyond pilots. Scaling AI means modernizing architectures, consolidating fragmented systems, and enabling data to flow freely – securely and responsibly – across hybrid and sovereign clouds. 

Why This Future Matters

IDC’s latest CEO survey reveals what’s keeping leaders awake at night: digital business execution gaps, economic pressures, and geopolitical risks. For EMEA CEOs, driving digital initiatives and leveraging AI for competitive advantage are top priorities. In fact, 50% believe AI will reinvent their business model within the next 3–5 years. Yet ambition alone isn’t enough. Without foundational readiness and robust governance, organizations risk falling short of ROI targets: by 2026, we expect that half of AI-fueled digital use cases will fail to meet ROI expectations. 

Five Imperatives for the Agentic Future

  1. Reimagining Digital Value 
    Economic headwinds and global instability are forcing organizations to rethink business models and redefine digital business value. Competitive advantage will increasingly hinge on how effectively companies integrate AI into their core strategies – not as a bolt-on, but as a driver of transformation. 
  2. Architecting for Scale 
    Scaling AI requires more than enthusiasm; it demands modernization and hybrid architectures that overcome tech debt and fragmentation. IDC research shows EMEA IT spending grew 13% in 2025, signaling strong investment momentum. But without a clear architectural vision, these investments risk becoming sunk costs. 
  3. Building Trust Everywhere 
    Trust is non-negotiable. Governance frameworks, responsible AI, and sovereignty are critical for compliance and risk management. Recent geopolitical shifts have accelerated this trend, with 61% of EMEA organizations favoring sovereign clouds for AI workloads. This isn’t just about regulation — it’s about ensuring resilience in a volatile world. 
  4. Leading Through Change 
    Technology alone doesn’t deliver transformation; leadership culture and organizational agility do. The AI pivot requires leaders who can embed innovation into the DNA of their organizations, fostering adaptability and collaboration across every layer. 
  5. Empowering the Workforce 
    The future of work isn’t just automation — it’s augmentation. Three out of four EMEA employees expect their jobs to be impacted by AI by 2026, underscoring the urgency of talent development. Organizations that invest in upskilling and human-machine collaboration will be best positioned for sustainable success. 

Find out more

The Agentic Business Future is not a distant vision; it’s unfolding now. But success requires moving beyond hype to measurable outcomes. The organizations that thrive will be those that combine technological ambition with governance, trust, and human-centric leadership.  

Join IDC’s senior regional analyst team for FutureScape 2026 webcast on December 3, where we will unpack these imperatives — backed by data, case studies, and practical guidance to help digital leaders design for resilience, agility, and growth in an increasingly complex environment. Register now here.  

If you have a question, you can submit that in our form here.  

Below are a couple of related eBooks:  

Artificial Intelligence has officially reached the “you can do anything with it” stage of technological hype. Judging just by AI vendor narratives, and by some of the media, it’s the golden key to productivity, efficiency, optimization and innovation. And if you add agents? They will think, write, negotiate, design, respond, validate automate, and probably brew your coffee and pick your tie, if you wear one. All you need to do is… well, everything else. And clients are trying, with 59% of organizations in Europe declaring they are using Agentic AI. 

Because while vendors keep promising moving mountains with a few lines of AI code, clients are still trying to figure out how to move their own data out of legacy systems and into AI. 

The Vendor: Here’s your AI, you can do anything with it! 

Two years into generative AI world, and still, you walk into any tech conference, and you can hear the same verse of a song we all know: “With (our) AI, you can/must/need/should/want to transform your business!”. 
And it does sound wonderful until you realize that behind the shiny demos and glossy ppt decks, there’s a subtle assumption that it is the client, who will have to make it happen. 

The vendor provides the vision; the client does the homework. 
And let’s not be fooled, it is not just a little homework. We’re talking about a full school year project, that, if you’ve ever done it, you’re dreading; from data preparation, to process standardization, to employee training, to infrastructure modernization. Let’s not forget we also need to build convincing business cases for the board. The same board that may also add to the noise with inflated expectations, like parents tricked by the school with a promise of great grades and a ticket to the best university, if only your child works hard enough. 

The Client: We’d love to, if only we had time… 

When you talk to most enterprises, you’ll probably hear a slightly different tone than that of vendors. Clients are not rejecting AI; they are overwhelmed and exhausted by it: 80% of clients in Europe say they manage to move beyond the PoC stage, but only half of those projects bring measurable outcomes. They’re juggling existing priorities often squeezed by budgets (even if AI spending seems to be relatively immune to budget cost, as we see in IDC research). And they are asked to lead AI transformation projects as if they had a spare team of data scientists and engineers hiding somewhere. 

And most painfully, vendors are often seen as teachers not that willing to help. As one manufacturing executive put it: “They come excited, but when asked for business cases or scenarios we can use, there’s silence”. 

That silence speaks volumes. Clients know that AI isn’t plug-and-play, it is much more complex and time-consuming.  You need to clean, prep, build, deploy, test and hope it scales. They understand that before you even dream of “autonomous decision making,” (though the sheer promise of autonomy can also scare some clients!) you need data consolidation, process standardization or cross-department alignment. Without that backbone connecting all stakeholders, no model will do magic. And oh, yes, change management, anyone? This needs to be planned and taken care of, too. Plus, once you have done all the work, you realize, this work continues: 49% of companies today focus also on making existing AI projects work better.  

But that’s rarely what the vendor pitch slides say. 

Only we are not at school anymore… 

Let’s agree, for many clients this feels like school all over again. Vendors show up as enthusiastic teachers, armed with the latest learning materials (“Look, a new LLM!” or “How about a fresh set of agents?”), and clients are expected to do the homework: research, structure, and present working examples at the next review. 

The difference? In school, a good teacher stays after class to help you understand the assignment. In AI world, too many vendors drop the textbook on a client’s desk, or a presentation into their mailbox, and head to the next classroom, I mean, to the next client… 

What is really needed is a different educational approach. Good teachers, like good business partners, guide, not grade. They adapt to the student’s (or client’s) level, pace, and context. They explain the “why” before demanding the “how”. That’s what’s so painfully missing in much of today’s vendor-client dynamic: tutorship instead of lectures. 

The missing link between a vision presented and the value expected  

The truth is, you cannot “do AI” without doing groundwork, in that sense, homework is needed. You are as good at math as the number of math problems you solved. And sure enough, that groundwork is not glamorous. 
And this much needed AI readiness isn’t about another platform or toolset; it’s about structure, sense, and support. The real hard work happens behind the scenes: making data talk to each other, mapping or streamlining processes, and, most importantly, preparing people to trust and use new systems. It’s less about technology as such, and much more about maturity: operational, organizational, and yes, managerial. 

To achieve that, what companies need most are partners who understand their business language as well as their data models. As one CIO put it: “We need partners, but we must drive the strategy, not follow vendors”. 

And that’s precisely where the conversation must change. We, or the market, desperately need to shift from unrealistic ambition – AI for all! to very realistic accountability – AI that fits. 

Going forward less pitching, more partnering, please… 

For vendors, this gap should be more than a talking point – it’s a wake-up call. The distance between what’s promised and what’s practical keeps growing, and clients are losing patience and hope. We’ve all heard the same speeches about collaboration, co-innovation and customer-centricity and yet too often, the market still gets more promise than substance. 

Clients aren’t lazy students skipping their homework. They’re professionals keeping production lines running, supply chains stable, and customers satisfied and all while being told they’re not “AI-ready” enough.  

If vendors want to stay relevant, they need to move from selling solutions to solving problems. That means stepping off the stage, where they are fighting with competitors and into the trenches to fight for clients, learning the nuances of each industry and individual organization’s needs. It also means realizing that success isn’t measured in the number of features added, dashboards set up or models deployed, but in business outcomes that actually matter. 

This may sound like a cliché but still true: at the end of the day, clients don’t buy AI (or any other technology for that matter); they buy results.  

We all need less hype and more help 

The promise of (well executed) AI is real. But so is the fatigue with AI at this point. It’s time to close the gap between “you can do anything” and ” but you need to do everything yourself”. 

If vendors truly want clients to embrace AI, they must act less like teachers assigning homework – think Bismarck-style education, and more like tutors walking beside their students – think Socrates before he drank a hemlock infusion. It’s this moment, when we realize, unlike at school, there’s no final exam in business, only continuous learning. 

And I would bet those who help their clients learn with them, not for them, will be the ones still standing when the hype cycle fades. 

You will hear more about AI and agents in IDC EMEA’s FutureScape Predictions webcast this December. You can register here,  

You may also be interested in a webcast Ewa is presenting on AI Sovereignty. You can register for that one here.  

For an overall look at AI in EMEA, you can download this eBook.  

To learn more about how International Data Corporation (IDC) can support your technology market data needs, please contact us.

Ewa Zborowska - Research Director, AI, Europe - IDC

Ewa Zborowska is an experienced technology professional with 25 years of expertise in the European IT industry. Since 2003, she has been a member of the IDC team, based in Warsaw, researching IT services markets. In 2018, she joined the European team with a specific emphasis on cloud and AI. Ewa is currently the lead analyst for IDC’s European Artificial Intelligence Innovations and Strategies CIS.

Across the technology ecosystem, a persistent, and increasingly problematic, obsession with top-line revenue continues to dominate the conversation. It’s a legacy mindset, rooted in traditional channel models where volume, rebates, and resell margins defined success. But in today’s world of cloud platforms, marketplaces, SaaS solutions, and interconnected services, that mindset is not just outdated — it’s actively distorting how vendors engage with partners. 
 
The reality is simple: value drives profit margin. Revenue is secondary. 
 
Smart partners already know this. They prioritize profitability, customer outcomes, and solution relevance. They understand that a $20 million partner business with 10% profit margin is far more sustainable than a $100 million partner business scraping by on 1% profit margin. Yet many vendors continue to celebrate inflated revenue optics, often without empathy or understanding of the complex financial mechanics that underpin those numbers. 

The danger of revenue aggregation 

In an ecosystem model, a single customer spend of $X might touch: 

  • A services-led partner or MSP
  • A cloud marketplace
  • An ISV
  • A distributor
  • A hyperscaler platform
  • A subcontractor or specialist integrator 

Each entity may report revenue from that same transaction. The result? Massive inflation of ecosystem revenue totals — with no deduplication. The same dollar is counted multiple times across the ecosystem. It’s a mirage of scale that masks the real question: who is delivering value, and who is capturing margin? 
 
Those who glamourize big numbers through aggregation — without acknowledging the complexity of transaction flows, margin splits, and service overlays — risk misleading the market. Worse, they risk misguiding their own partner strategies. In an increasingly AI-, cloud-, and marketplace-centric landscape, understanding how revenue is earned, shared, and sustained is far more important than how much is reported. 

Who are partners really working for? 

Revenue matters – especially to vendors. A partner that drives increased consumption and revenue from a customer is doing exactly what vendors want. And that’s fine – as long as it’s in the best interests of the customer. 
 
But every partner must strike a balance. Are they working for the benefit of the vendors in their portfolio, or for the customers they serve? That’s a tightrope. And not everyone has the balance right. 
 
Partners who prioritize vendor incentives over customer outcomes risk losing trust, relevance, and long-term opportunity. The most successful partners are those who align vendor goals with customer value, not the other way around. 

What vendors should do differently 

Vendors must evolve how they measure and support partner success. That means: 

  • Moving beyond transactional metrics to focus on customer success, lifecycle engagement, and solution impact 
  • Recognizing services-led and IP-driven partners as strategic influencers, not just resellers 
  • Understanding profit margin mechanics across the ecosystem — and designing programs that reward value creation, not just volume 
  • Avoiding one-size-fits-all partner models that fail to reflect the diversity of partner roles in AI, cloud, and vertical solutions 

What partners should do differently 

Partners must also rethink how they define success and where they focus their energy. That means: 

  • Prioritizing profitability over volume — chasing real profit margin, not just top-line growth 
  • Investing in services, integration, and vertical expertise to stay relevant in complex solution environments 
  • Building trust with customers by aligning technology choices to business outcomes, not vendor incentives 
  • Understanding their role in the ecosystem — not just as resellers, but as orchestrators of value across multiple partners and entities 

The partners who thrive in this environment are those who: 

  • Lead with customer success and lifecycle engagement 
  • Build vertical-specific solutions with real-world impact 
  • Understand how to navigate and influence multi-vendor, multi-platform ecosystems 
  • Know when to say no — to deals, incentives, or programs that don’t serve their long-term strategy 

IDC’s ecosystem lens 

IDC’s ecosystem research focuses on value creation, margin capture, and strategic influence. We analyze how partners orchestrate outcomes, how they align with customer buying journeys, and how they evolve their business models to stay relevant. You can find more information here.  

Stuart and Andreas recently presented a webcast, The New Partner Playbook: Ecosystem-Led Growth in EMEA, which you can find here.  

If you have any further questions, drop them in the form here.  

 

Stuart Wilson - Senior Research Director, EMEA Partnering Ecosystems - IDC

Stuart Wilson is senior research director for IDC’s Europe, Middle East & Africa (EMEA) Partnering Ecosystems program. With over two decades of global experience, Stuart focuses on the rise of complex, connected ecosystems and how platform models are reshaping routes to market and partner engagement frameworks.

Andreas Storz - Senior Research Manager, EMEA Partnering Ecosystems - IDC

Andreas Storz is senior research manager for IDC’s Europe, Middle East & Africa (EMEA) Partnering Ecosystems program. Based in the US, Andreas focuses on the evolution of go-to-market models, new digital value chains and the wider impact on partner ecosystems, exploring how current and future trends will impact the vendor, distributor, and partner landscape.

Beyond revenue: why telecom’s future depends on profitability, not just revenue

On 24 September 2025, I moderated a panel at Connected Britain titled “Monetising Your Network for a Better Tomorrow” — or, as Carlos Bock aptly put it, “Monetising Your Network for a Better Today.” The panel brought together influential voices from across the telecom ecosystem — Ronan Kelly (Managing Director, AllPoints Fibre), Stefan Stanislawski (CEO, Lightning Fibre), Carlos Bock (Executive Chairman, F&W Networks), Will Rhodes (Carrier Managed Service Consultant, Ciena), and Dan Bloch (Senior VP Global Solution, Calix) — to tackle one of the industry’s most urgent challenges: how to unlock new value in a market that’s saturated, commoditised, and fiercely competitive.

The answer, it turns out, isn’t about chasing revenue growth. It’s about profitability.

From ARPU to AMPU: a necessary shift in focus

For more than a decade, telecom operators have measured success by one metric above all others: average revenue per user (ARPU). But as competition intensifies and price wars continue to drive down returns, ARPU alone tells an incomplete story. Carlos Bock noted, customers today are getting a “Ferrari for the price of a Honda.” Ultra-fast, highly reliable connectivity is priced like a commodity — and operators have been complicit in that race to the bottom.

It’s time to shift the industry’s focus from ARPU to AMPU (Average Margin Per User). Understanding what customers pay is no longer enough — telcos must grasp what each user contributes to profitability. During the panel, Ronan Kelly posed a simple yet revealing question: “Who here knows their AMPU?” Out of more than 200 attendees, only two raised their hands. This striking moment underscored a critical gap — most operators lack visibility into per-user margin data, even though it’s essential for informed strategic decisions.

Ultimately, telcos are valued not by the size of their top-line revenue, but by their EBITDA margin — the efficiency with which they generate earnings, as measured by metrics like Discounted Cash Flow (DCF) and EBITDA multiples.

Beyond connectivity: monetisation through value creation

Connectivity will always be the bedrock of telecom. But as bandwidth becomes abundant and undifferentiated, telcos must move beyond selling “pipes” and start selling outcomes.

That means evolving from a product-centric mindset — faster speeds, bigger data packages — to a customer-centric value proposition that focuses on enterprises language and outcomes e.g., visibility, reliability, security, and predictability.

Monetisation isn’t just about launching new services; it’s also about repackaging and optimising what already exists. Whether that’s offering connectivity-as-a-service, bundling security capabilities, or embedding network insights into enterprise workflows, the goal is the same: deliver differentiated value that customers are willing to pay a premium for.

One example came from Stefan Stanislawski, highlighted how telcos can unlock profitability by embedding themselves in their communities. By supporting initiatives like the Heathfield Agricultural Show and enabling smart farming through real-time data transmission, remote monitoring, and IoT connectivity, Lightning Fibre is not just selling broadband — it’s solving real challenges for rural customers. This approach transforms the telco from a utility provider into a trusted local brand. As Stefan put it, “We want to build a community, we want to build a local brand, we want to connect to our customers in these rural areas, understand their challenges, and solve their problems.”

AI as a catalyst for profit growth

Emerging technologies — especially AI, GenAI and Agentic AI — will be the defining factor separating the winners from the laggards.

Ronan Kelly captured this shift bluntly: “there are two types of telcos — those that leverage AI, and those that don’t. The latter, are on a path to bankruptcy.” The industry is already bifurcating into two camps: those integrating AI deeply into operations and customer offerings, and those resisting it. The former will see margins expand, the latter risk irrelevance.

But AI adoption isn’t just a technology challenge — it’s a people challenge. Ronan highlighted the fear many employees feel about AI changing their roles (and how they feel as if they were cheating), Ronan linked this to the early days of Excel: “Did the person who switched from paper to spreadsheets feel like they were cheating?”

AI and automation have real impact on operational efficiency (driving down costs) and revenue enablement (enhancing targeting, personalising offerings, and uncovering new revenue streams). Operators that use AI to intelligently segment customers, tailor marketing, and optimise service delivery will achieve higher margins and stronger competitive positioning.

Dan Bloch added that AI’s real power lies in precision — enabling targeted marketing, customer segmentation, and focused sales strategies. Instead of casting a wide net, “Telcos can use AI to deliver the right message to the right customer at the right time, driving both relevance and profitability.

Profit through partnerships and ecosystems

The B2B telecom ecosystem is undergoing significant disruption. Hyperscalers, system integrators, multicloud providers, and other non-traditional players are increasingly offering communication services — often with greater agility and deeper enterprise integration. This shift is intensifying competition and pressuring telcos in their core markets.

The result is a fragmented landscape where traditional telcos can no longer rely solely on infrastructure ownership or legacy relationships. Instead, they must rethink their role in the value chain — moving from isolated service providers to collaborative ecosystem partners. Sustainable monetisation will depend on telcos’ ability to co-create value with these emerging players, rather than compete against them in a zero-sum game.

Will Rhodes stressed that “no single operator can capture the full value chain alone. Sustainable monetisation will depend on ecosystem collaboration — where each player understands its value contribution and shares in the resulting margins.”

Whether it’s partnering with cloud hyperscalers for edge services, security vendors for managed offerings, or local organisations to build community-focused solutions, the future of telecom monetisation will be built on shared value creation rather than isolated competition.

What “good” looks like 

In this new era, successful telecom operators will:

  • Know their profitability at a granular level, including per-user margins.
  • Shift from network providers to value enablers, delivering capabilities and outcomes rather than just connectivity.
  • Use AI strategically to boost both efficiency and revenue.
  • Build ecosystems that expand value creation and customer relevance.

The operators that fail to evolve will continue competing on price — and in doing so, erode the very margins they need to survive.

Final thoughts

Telecom’s future growth story isn’t about adding more zeros to the revenue line. It’s about building a business that’s profitable, resilient, and indispensable. That requires a mindset shift — from chasing scale to maximising value, from ARPU to AMPU, and from selling bandwidth to selling outcomes.

To close the session, I asked each panellist to leave the audience with one word that captures their vision for the future of telecom:

  • CarlosOptimise
  • StefanRelationship
  • DanPersonalise
  • RonanDifferentiate
  • WillPartner

As the Connected Britain panel made clear, the telcos that embrace this transformation will not only monetise their networks for a better tomorrow — they’ll secure their profitability today.

AI in EMEA 2025, a recent eBook, features a section on telco. You can download it here.

For more information on AI, join our 2026 tech predictions webcast on Dec 3rd. The Agentic Business Future: Driving Resilience, Sovereignty, and Innovation in EMEA, IDC’s Tech Predictions for 2026 and Beyond.

Masarra Mohamad - Senior Research Analyst, European 5G Enterprise Strategies - IDC

Masarra Mohamed is a senior research analyst specializing in analysing the connectivity and communications services markets, focusing on the changing networking requirements, trends, and competitive dynamics that support enterprises in their digital transformation. She explores how enterprise network strategies evolve to enable cloud, AI, and security.

In today’s crowded tech market, features don’t sell. Value does. And yet, far too many sales teams are still stuck pushing product specs while their competitors walk away with the contracts. 

The truth? If your team can’t lead with business value, you’re already behind. 

High-performance sales teams are not created by chance. It’s not about having the loudest pitch or the biggest pipeline. It’s about building teams that can step into the boardroom as trusted advisors. Teams who can link your technology to measurable outcomes that your clients can’t ignore. 

And here’s the catch: most organisations think they’re doing this. Almost none are. 

What Does “Business Value” Really Mean in Sales? 

So, what does it really take to transform a standard sales team into a high-performing one? One that consistently sells business value as an outcome? 

In today’s technology landscape, having an innovative product is just the starting point. What truly sets successful tech vendors apart is their ability to demonstrate clear, measurable business value and return on investment (ROI) to their customers. 

To get there, marketing, sales, and sales enablement leadership must work together to build strong messaging, market insights, and client success stories that can be leveraged in customer interactions. Leading the discussion on what the company can do for the customer and then quantifying the value of that partnership, builds trust and sets a high-performance benchmark. 

How to Equip Sales Teams to Lead with Value 

Not all enterprises can align every salesperson to a consistent value message for each product or service. Salespeople bring a range of individual styles into their relationships, but what unites them is the focus on building trust and instilling confidence in their solutions.  

Despite this need, many organisations lack the experience to develop value-based messaging, collateral, and enablement programs that bring this confidence to life. Creating alignment across teams requires structure, expertise, and the right insights. 

How IDC Helps Sales Teams Sell on Business Value 

At IDC, we work with technology vendors worldwide to strengthen their ability to sell based on business value and tangible outcomes. Our analysts and consultants deliver market insights, benchmarks, and customer validation that empower marketing, sales, and enablement leaders to align around proven value delivery. 

Through tailored sales enablement workshops, value-based messaging frameworks, and analyst-led collateral, IDC equips teams to engage customers with confidence and demonstrate measurable ROI. Get in touch to learn more. 

 

Nathan Budd - Senior Director, Custom Solutions - IDC

Nathan Budd is a consulting director, working across strategic, market intelligence and go-to-market solutions. With experience across a spectrum of ICT projects and clients, he delivers a breadth of knowledge and insight to the IDC European consulting team. Over the years, Nathan has worked with CEOs, industry forums, executives and sales teams, to define market strategy, positioning and sources of revenue growth. He is an experienced speaker, project lead and facilitator, bringing energy and perspective, while maintaining the connect between strategic-level thinking and grass-roots action.