As we approach 2024, IT budgets continue to play a critical role in shaping the digital landscape, especially as businesses look to harness cutting-edge technologies like artificial intelligence (AI), advanced networking, and security solutions. Despite economic uncertainty and fluctuating market conditions, companies are showing a consistent commitment to increasing their IT expenditures. Two recent surveys—conducted by Avasant Research and Osterman Research—reveal key insights into how organizations across the U.S. and Canada are prioritizing IT investments, with a particular emphasis on AI, data analytics, networking, and security.
In this article, we explore how these spending trends are shaping the future of IT infrastructure, what drives the need for these investments, and the long-term implications for enterprises. The analysis is grounded in the survey data provided, backed by additional arguments and statistics that paint a fuller picture of the IT priorities businesses will focus on in 2024 and beyond.
IT Spending Priorities: AI Takes Center Stage
Artificial intelligence has emerged as a cornerstone of IT spending, with 68% of companies indicating plans to increase their investment in AI, according to Avasant Research’s 2024/2025 study on IT spending and staffing benchmarks. This statistic reflects a broader trend across industries as AI technologies evolve from experimental tools to essential components of daily operations. AI-driven systems can automate complex tasks, enhance decision-making through data-driven insights, and improve operational efficiency.
Companies are increasingly leveraging AI for a wide range of applications, including predictive analytics, process automation, customer service (via AI-powered chatbots), and even cybersecurity. The rapid adoption of AI technologies can be seen in industries such as healthcare, finance, and manufacturing, where AI is utilized to streamline operations, reduce errors, and drive revenue growth. According to a report by PwC, AI has the potential to contribute up to $15.7 trillion to the global economy by 2030, further fueling the urgency for businesses to invest in AI capabilities.
However, integrating AI into existing IT infrastructures requires significant investment in complementary technologies. Avasant’s survey highlights the critical role of networking and data analytics in powering AI systems. More than 68% of respondents also reported that they plan to increase spending in these areas, recognizing the importance of scalable, high-speed networks to support the data-intensive nature of AI workloads. AI applications, particularly in machine learning and large language models, require robust data processing capabilities and seamless connectivity across organizational systems to function optimally.
The Impact of Networking on AI and Cloud Adoption
Networking, often viewed as the unsung hero of IT infrastructure, is emerging as a key area of investment for businesses aiming to deploy AI solutions at scale. The survey by Osterman Research, commissioned by Open Systems, found that 70% of organizations plan to increase their network budgets in the coming year. This rise in networking expenditure is driven by the need to support AI, cloud computing, and an increasing number of Internet of Things (IoT) and Industrial Internet of Things (IIoT) devices within enterprise environments.
The reliance on cloud infrastructure for AI deployment is particularly significant. The same Osterman Research report notes that 79% of businesses are increasing their cloud infrastructure budgets, with a strong focus on ensuring that their network architectures can handle the demands of modern AI systems. Cloud computing offers the flexibility, scalability, and processing power necessary for AI applications, but it also places immense pressure on networks to deliver low-latency, high-bandwidth connections between data centers, cloud providers, and end-users.
Additionally, advanced networking solutions, such as Software-Defined Wide Area Networking (SD-WAN) and Secure Access Service Edge (SASE), are becoming essential tools for managing this complexity. SD-WAN helps optimize network performance by routing traffic through the most efficient paths, while SASE combines networking and security functions into a single cloud-based platform, ensuring that remote and hybrid workers have secure access to critical applications. These technologies not only improve network performance but also enhance security, a critical factor for businesses as they navigate an increasingly complex threat landscape.
The role of networking in AI and cloud adoption cannot be overstated. As companies continue to expand their use of cloud services and deploy AI across their operations, the need for reliable, high-performance networks will only grow. This trend is particularly evident in sectors such as retail, logistics, and telecommunications, where real-time data processing and low-latency connectivity are crucial for AI-driven decision-making and customer service optimization.
Security: A Top Priority for IT Budgets in 2024
Alongside AI and networking, security remains a top concern for organizations, with 70% of companies indicating plans to increase their security budgets, according to Osterman Research. The rise in cybersecurity threats, coupled with the growing regulatory landscape, has prompted businesses to invest heavily in protecting their digital assets and ensuring compliance with industry standards. As AI and cloud adoption accelerate, the complexity of security challenges also increases, necessitating robust security solutions that can protect sensitive data across distributed environments.
One of the key drivers of security investment is the proliferation of IoT and IIoT devices. Osterman Research reports that 90% of organizations are seeing an increase in these devices on their networks, further complicating their security posture. IoT devices, while providing significant operational benefits, are also a common target for cyberattacks due to their often-limited security features. As more devices are integrated into enterprise networks, businesses must adopt comprehensive security strategies that include endpoint protection, network segmentation, and continuous monitoring.
Regulatory compliance is another major factor driving security spending. According to the survey, 88% of companies are increasing their budgets to comply with evolving standards and regulations, such as the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the U.S. These regulations require organizations to implement strict data protection measures and ensure that they can quickly respond to security incidents.
In addition to compliance, businesses are investing in cybersecurity solutions to mitigate the risks posed by an increasing number of remote and hybrid workers. With 67% of companies reporting an increase in remote or hybrid work arrangements, securing access to corporate networks and data has become a top priority. Solutions such as Zero Trust Architecture (ZTA) and Multi-Factor Authentication (MFA) are being widely adopted to ensure that only authorized users can access sensitive systems and data.
As cybersecurity threats become more sophisticated, organizations must continue to invest in cutting-edge technologies to stay ahead of potential attackers. This includes leveraging AI and machine learning to detect anomalies and identify potential threats before they can cause significant damage. According to a report by Cybersecurity Ventures, the global cost of cybercrime is expected to reach $10.5 trillion annually by 2025, underscoring the need for ongoing investment in cybersecurity.
The Future of IT Investments: A Hybrid Approach
As organizations navigate the complexities of digital transformation, one thing is clear: IT budgets in 2024 will be driven by the need to balance innovation with security and performance. The surveys conducted by Avasant Research and Osterman Research highlight the interconnected nature of these priorities, with AI, networking, and security emerging as the top areas for investment. However, these investments are not being made in isolation. Instead, businesses are adopting a hybrid approach, integrating new technologies into their existing infrastructures to maximize efficiency and reduce costs.
This hybrid approach is particularly evident in the realm of AI and networking. Rather than replacing existing systems, companies are enhancing their IT infrastructures with advanced technologies such as neuromorphic computing, edge computing, and AI accelerators. These innovations enable businesses to scale their AI workloads more efficiently, while also reducing the energy consumption and latency associated with traditional cloud-based models. For example, edge computing allows AI models to be deployed closer to the source of data, reducing the need for constant communication with centralized data centers.
At the same time, businesses are continuing to invest in cloud infrastructure, recognizing its value for scaling AI and other data-intensive applications. As Osterman Research’s survey indicates, 93% of companies are increasing their budgets to support digital transformation initiatives, with cloud computing playing a central role in these efforts. However, this shift to the cloud requires organizations to rethink their network architectures, ensuring that they can support the increased demand for bandwidth and low-latency connections.
The future of IT investments is also being shaped by the need for greater flexibility and cost efficiency. With 87% of companies looking to reduce costs or increase efficiency, businesses are turning to technologies such as automation and AI to streamline operations and optimize resource allocation. Data center automation, for example, is a key area of focus for many organizations, as it allows them to reduce manual processes and improve the reliability of their IT infrastructures.
Conclusion:
The data from Avasant Research and Osterman Research paints a clear picture of the priorities driving IT budget increases in 2024. AI, networking, and security are at the forefront of these investments, with businesses recognizing the critical role these technologies play in driving digital transformation and maintaining a competitive edge. However, as companies look to expand their use of AI and cloud technologies, they must also invest in the supporting infrastructure—both in terms of networking and security—needed to ensure these systems operate efficiently and securely.
As the global economy continues to recover from the effects of the COVID-19 pandemic and geopolitical tensions, the need for resilient, scalable, and secure IT infrastructures will only grow. Organizations that invest strategically in AI, networking, and security today will be well-positioned to capitalize on the opportunities presented by digital transformation, while also protecting their assets in an increasingly complex threat landscape.
The hybrid approach to IT investment, combining cutting-edge technologies with existing systems, will be key to achieving these goals. By balancing innovation with security, companies can not only drive operational efficiency and reduce costs but also ensure that their IT infrastructures are future-proofed for the challenges and opportunities of the coming decade.
