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Newsletter: Signs of the Tech Revolution #2

Welcome to the Signs of the Tech Revolution newsletter, where we bring you insights and developments in the world of business and tech.
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Published on
May 10, 2024
Last updated on
July 3, 2024

Hello and welcome to the Signs of the Tech Revolution newsletter. We bring you insights and developments in business and tech that will affect the way you do business now and in the years to come.

News #1: Skill gaps are putting pressure on existing IT staff, who are ultimately bearing the burden

According to a Pluralsight survey, organizations face significant skill gaps in cybersecurity, cloud computing, and software development, leading to increased workloads and abandoned projects. Challenges in upskilling include the lack of leadership support, time constraints, and financial limitations. 

Cybersecurity and cloud computing remain the top skill gaps, while software development sees growing demand. Upskilling offers a cost-effective solution, taking an average of 10 weeks compared to $23,000 to hire new talent. 

Despite the hype around emerging tech like AI, foundational skills are crucial. While AI talent gaps are low priorities, ongoing investment in upskilling is improving IT skills gaps for around three-quarters of organizations.

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News #2: Your employees want to use AI, whether you're ready or not

Generative AI has become integral to workplaces, with employees adopting it to alleviate job pressures independently of official approval. Microsoft's Work Trend Index highlights AI's role in democratizing expertise, although concerns remain about quantifying productivity gains. Employees, regardless of generation, integrate AI to combat job chaos and burnout.

AI competency is crucial for career advancement, with 66% of business leaders unwilling to hire candidates lacking AI skills. Power users report significant time savings and improved workload management.

Despite executive hesitance, fostering AI enthusiasm among employees is crucial for competitive advantages through agility and skill-building. Business leaders should identify specific problems for AI applications, adopt a top-down, bottom-up approach, and prioritize AI training for transformative results.

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News #3: IT services spending will reach $2 trillion by 2028

Forrester predicts the global IT services market will reach $2 trillion by 2028, driven by enterprises investing in cloud modernization. Despite near-term challenges like trade conflicts, the market is expected to grow 16% annually. Hyperscalers like AWS, Microsoft, and Google Cloud lead growth, with IaaS spending set to double in five years.

Infrastructure sets the stage for service-based technology procurement, particularly in cloud data and compute services. Forrester expects increased spending on advisory, implementation, and managed services, which are crucial for areas like cybersecurity and AI. Generative AI consulting is a growing field, with Accenture and Capgemini planning to expand their AI specialist teams.

Overall, generative AI has the potential to revolutionize IT service delivery, streamlining processes, reducing costs, and enabling further modernization efforts. Your organization can also leverage it.

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News #4: AI accelerates cloud revenue and investments

The growth rate in cloud services spending slowed a few years ago due to market competition, but recent quarters have seen accelerated spending, largely driven by the high costs of hosting AI workloads in the cloud. 

Forecasts suggest the global cloud services market will double in the next four years, with AWS maintaining a 31% market share, followed closely by Microsoft Azure at 25% and Google Cloud at 11%. The surge in AI-driven projects is fueling demand for hyperscale data centers, which are projected to double in capacity, driving substantial power consumption increases.

Despite the cloud market's expansion, challenges remain in accurately quantifying and forecasting spending growth. While AWS, Microsoft, and Google Cloud are experiencing revenue increases, profitability varies, with AWS leading in operating income. As the cloud landscape evolves, market dynamics and technological advancements will continue to shape its trajectory, potentially leading to more equitable market shares among major players.

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Other Resources

  • Citi, Morgan Stanley, Databricks, and Microsoft will help guide a FINOS initiative aimed at devising best practices for onboarding Artificial Intelligence - Learn more 
  • China Mobile, NTT DoCoMo, and SK Telecom are the telecom digital transformation leaders. They beat out nine other global operators - See the whole list
  • Google Deepmind unveiled the third major version of “Alpha,”ld”, designed to help scientists design drugs and target disease more effectively - Read the article
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