Expectations for GenAI Deployment in IT Services in 2024

Current State of GenAI Deployment

Generative AI (GenAI) has been unavoidable, but the early 2023 hype has now been tempered by concerns around cost, technology challenges and ethics. To keep clients interested, IT services vendors and consultancies have pivoted from art-of-the-possible to business-backed use cases.

 

Persistent challenges around deploying actual GenAI-enabled solutions at scale have not abated, even as IT services vendors, consultancies and their clients have become more familiar with AI’s potential and limitations.

Watch 2024 Professional Services Predictions session – GenAI Hype in 2024: A Deep Dive into IT Services Industry Predictions

GenAI Adoption in 2024

Early investments by technology companies in hardware and software, by IT services vendors and consultancies in skills and business cases, and by clients in trying to understand how GenAI will change their business created a foundation for sustained opportunities around GenAI.

 

However, accelerated adoption will not happen until costs come down and data management improves. Concurrent with efforts to address early challenges, TBR anticipates a shift by IT services vendors and consultancies from selling use cases to selling outcomes, an approach more aligned with the evolving IT services and consulting value proposition.

 

As GenAI hype becomes a reality in 2024, outcome-based pricing as a preferred — and not occasional — commercial arrangement will accelerate. Vendors and their clients will expect AI, automation and analytics to provide greater transparency, which is always the most significant hurdle in outcome-based pricing arrangements.

Conclusion

At its core, GenAI depends on good data. Numerous surveys, including TBR’s Digital Transformation: Voice of the Customer Research, indicate that only a small percentage of enterprises sufficiently collect, manage and understand their internal data. Efforts to adopt GenAI-enhanced solutions will persistently run into data issues, opening the door for consultancies and consulting-led IT services vendors to assist with data orchestration. Cleaner data will allow for greater transparency around enterprises’ IT needs and the business results of GenAI-enabled digital transformations.

 

With greater transparency will come increased pressure — especially from C-Suite leaders sold on the promise of GenAI — for outcome-based pricing arrangements. Those IT services vendors and consultancies that are nimble enough with their business models and financially stable enough to take on risks will begin setting the standard, gradually — and then rapidly — replacing time and materials with an outcome-based pricing model.

 

To learn more about TBR’s predictions for IT services and consulting markets in 2024, download your free copy of Top Professional Services Predictions for 2024, featuring a look at GenAI pressures and talent challenges in the markets in the new year.

6G Transition: Preparing for Next-Gen Networks

Current State of 6G

As the development cycle of the 5G era reaches the halfway mark (Check out this infographic!), the telecom industry has begun positioning for the commencement of the 6G era. The first set of 6G specifications is expected to be established in 2028 as part of the 3GPP (3rd Generation Partnership Project) Release 21 and initial commercial 6G network deployments are expected by 2030.

 

The telecom industry and global government entities have begun preparing for the 6G era via initiatives including determining criteria for standards development, establishing research consortiums and other strategic partnerships, identifying probable spectrum bands to support 6G, and exploring potential 6G use cases.

Telecom Industry and Government Entities Have Begun Preparing for 6G

Government Initiatives

Numerous countries and regions have begun pursuing initiatives to be at the forefront of 6G development. For example, in the U.S. the Federal Communications Commission’s (FCC) Technology Advisory Council established a 6G Working Group to provide recommendations to the FCC for 6G development. The Biden administration also recently announced the National Spectrum Strategy, which identifies potential future spectrum to support 6G (and 5G).

 

Other examples include South Korea launching a $325 million 6G commercialization and standardization R&D strategy; India establishing its Bharat 6G Vision, which aims for the country to launch 6G services by the end of 2030; and the European Union funding the Hexa-X research consortium, which includes leading vendors and operators. China has also begun embarking on research initiatives and experimentations to launch 6G by its target of the end of 2030.

Identifying 6G Spectrum

The clearance of additional spectrum in global markets will be essential in supporting escalating data traffic long-term as 6G is projected to support a 10x increase in usage on networks. Spectrum in the upper midband range (7GHz-24GHz) is being targeted as prime spectrum to support 6G as it is expected to provide an ideal balance of speed, propagation, coverage range and capacity.

 

Additional spectrum being considered for 6G includes lower-band spectrum (below 7GHz) due to its more widespread coverage range as well as millimeter wave spectrum due to its high bandwidth and capacity and low latency. Sub-terahertz spectrum (90GHz-300GHz) is also being explored for 6G, which would be able to support extremely high data rates though deployments would likely be limited to specific localized use cases, such as supporting holographic communications in a hospital or factory.

Use Case Exploration

6G is expected to support various use cases in areas including holographic communications, digital twins, AR/VR and autonomous robotics. Many of these types of use cases will have initially released to market during the 5G era but will gain greater adoption during the 6G era due to evolved network capabilities as well as supporting players such as device vendors providing more advanced accompanying solutions.

 

Network as a sensor is also being targeted, which will enable 6G networks to sense their surroundings to support a variety of use cases including public safety, healthcare and security. 6G will also enable operators to more cost-effectively support escalating data traffic on their networks as 6G provides advanced AI/machine learning (ML) capabilities and is more energy efficient than 5G.
 

Watch the Video Below to Learn How to Navigate the Telecom Industry as a Whole in 2024

Primary Driver for CSPs to Deploy 6G

Members of the telecom industry are cautiously optimistic about 6G due to its expected network efficiencies, ability to support escalating data traffic and potential 6G use cases. However, they are also voicing uncertainty and reservations around 6G, which is largely due to the high investment costs and limited monetization opportunities communication service providers (CSPs) have experienced in the 5G era.

 

Though 6G technical specifications and expected use cases are still in the developmental stages, TBR believes operators will be more calculated and tactical in investing in 6G compared to 5G, with a deeper emphasis on ensuring a clear line of sight to ROI before significant spending occurs.

 

The telecom industry has begun exploring 6G use cases, though the time frame for commercial readiness and the willingness of customers to pay for these solutions remain unknown. AR/VR use cases are a targeted area for 6G, including the metaverse and real-world simulations to provide training for users such as military personnel and first responders. Use cases around autonomous vehicles, advanced robotics, drones and 8K video are also key solutions being explored.

 

TBR expects the most beneficial use cases for 6G will involve the provisioning of advanced technologies that will enable operators to more cost-efficiently support rising traffic on their networks. For instance, deeper implementation of AI and ML technologies will enable operators to enhance self-optimizing network (SON) capabilities to realize cost efficiencies.

 

6G is also expected to result in deeper implementation of digital twins, which will help operators better anticipate potential outcomes to their networks and optimize their operations in areas including site management and field operations. Additionally, 6G is expected to be significantly more energy efficient compared to 5G, which will enable operators to improve cost efficiencies while helping to support corporate sustainability goals.

Conclusion

The telecom industry is on the cusp of the 6G era, with the first set of specifications expected to be established in 2028 and initial commercial deployments projected by 2030. Governments and industry players are actively preparing for this transition, with initiatives ranging from spectrum identification to use case exploration.

 

While there is cautious optimism about the potential of 6G, there are also concerns about the high investment costs and limited monetization opportunities that characterized the 5G era. However, with advancements in AI/ML capabilities, energy efficiency and the promise of transformative use cases, 6G is expected to offer significant benefits, including cost efficiencies and improved network performance.

 

As the industry continues to evolve, it will be crucial for stakeholders to carefully assess the ROI and strategic value of 6G investments.

 

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AI Impact on IT Infrastructure in 2024

Expectations for AI and IT Infrastructure

2023 was a challenging year for server and storage OEMs, marked by weak demand across enterprise and SMB customers. The market recovery at large will be a slow one in 2024, partially accelerated by the boom in demand for AI-enabled compute and, to a lesser extent, customers’ desire to rebalance their portfolios with less reliance on costly public cloud services.

Watch TBR Principal Analyst Angela Lambert Discuss Expectations for AI’s Impact on IT Infrastructure in 2024

Predictions for the IT Infrastructure Industry in 2024

Prediction: AI-enabled infrastructure will create opportunities for new solutions

Enterprises will rush to acquire as much AI-capable hardware as possible, opening doors for a new portfolio of consulting, design, implementation and managed services.

Prediction: Cloud customers are looking for ways to decrease IT complexity and cost

As public cloud rates continues to rise, enterprises will continue to reevaluate workload placement to optimize performance and cost.

Prediction: Coopetition will continue to bring true multicloud environments closer to reality

Vendors are increasing investments with the top three cloud providers to expand their presence in cloud marketplaces and revamp hybrid cloud solutions with new levels of automation and integration.

 

TBR’s IT Infrastructure market and competitive intelligence research covers the financial performance and product and partner strategies of the world’s leading infrastructure vendors across server, storage, networking and hyperconverged markets. Specific topics include infrastructure vendor benchmarking, infrastructure strategy customer research, hyperconverged platforms customer research and infrastructure consumption services. Additionally, we publish individual analysis on Dell Technologies, Hewlett Packard Enterprise, IBM and Lenovo Group.

 

To learn more about TBR’s predictions for the IT infrastructure industry in 2024, check out our recent interview with TBR Principal Analyst and Infrastructure Practice Lead Angela Lambert.

Strategic Insight: Navigating the IT Services Market Using Competitive Intel

Understanding Current IT Services Market Dynamics

Overall IT services revenue growth decelerated in 2023 as the market outlook remained uncertain, clients tightened budgets, and IT services vendors re-evaluated talent strategies in areas including hiring, composition and training. The majority of clients focused spending on run-the-business managed services as well as the integration of AI and digital solutions that provide more efficient ways of working, reducing overall expenses.

 

Additionally, cloud migrations and transformation-led activities helped clients reduce tech debt and consolidate cloud and application environments. According to TBR’s 3Q23 IT Services Vendor Benchmark, published on Jan. 16, “Enterprises are looking to establish strong and secure digital cores, paving the way for vendors to continue capitalizing on the need for cloud migration, applications modernization and data transformation services as well as cybersecurity opportunities. Vendors continue to experience profitability pressures due largely to rising labor and SG&A costs.”

 

In 2024, the needs emerging out of limited client budgets and centered on AI and efficiency will continue to guide IT services vendors’ portfolio expansion and talent development.

The Crucial Role of Competitive Intelligence in the IT Services Sector

To ensure business segments and portfolios are aligned with client needs, IT services vendors forge partnerships, such as with the hyperscalers, to create the ability to work within and across clients’ multicloud environments. For example, forging large-scale partnerships with Google Cloud, Amazon Web Services, Microsoft, Oracle and SAP equips vendors to deliver at scale across client needs and more easily support transformation projects even in a mature IT environment. With clients being more cost conscious, vendors that can seamlessly take over peer-driven transformations will be more successful in capturing new client engagements.

 

Acquisitions have proved to be a vital way for vendors to quickly add in-demand services and solutions as well as talent to better deliver on clients’ emerging needs. While overall acquisition activity slowed for most vendors during 2023, purchases that were finalized brought in specific capabilities that complemented existing strengths while also infusing new portfolio offerings. More specifically, vendors looked to deepen their capabilities and presence around cloud, security and AI, a trend we expect to continue — and possibly gain speed — in 2024.

 

Lastly, taking note of peers’ talent strategies and overall organizations enables vendors to effectively develop internal abilities and practices and strengthen client relationships. According to TBR’s special report IT services and consulting in 2024: Traversing GenAI pressures, talent challenges, and regulatory waves, “To battle employee attrition and take back control, employers ramped up training and other retention-enabling investments. While many tech companies made news by shedding headcount, most global systems integrators (SIs) and consultancies have sought to keep trained and experienced talent, minimize turnover, and prepare for renewed growth from late 2023 into 2024. … The 2023 focus on reskilling and training will pay off in accelerated revenues in 2024 as IT services vendors will have the trained and certified professionals to staff what TBR expects will be growing IT services demand.”

 

While most vendors look to certify employees on partner technologies, keeping pace with peers’ skills and certifications will enable vendors to better pursue software-driven projects. Additionally, efforts to reduce turnover remain similar across vendors, with a focus on training, culture and workplace flexibility. Vendors with more aggressive workplace practices and return-to-office policies may experience higher turnover than their peers. Across the IT services market, talent remains the key asset — vendors must keep in mind their peers’ strategies, investments and composition to successfully deliver client projects.

The Outlook for Competitive Intelligence in the IT Services Market

As uncertainty remains the common thread across market conditions as well as client and ecosystem company activities, vendors need to re-evaluate client retention strategies to ensure service quality standards are met. A focus on client management and success will enable vendors to effectively preserve market share by matching or exceeding peers’ client relationship efforts.

 

Limited budgets require more than communication, pushing vendors to ensure they can deliver on technology-driven transformation that infuses AI and automation capabilities as well as digital workplace services to drive operational efficiency and cost reduction for clients. Ensuring the right talent is in place to support innovation activities and maintain client relationships will be vital for vendors to secure positioning and remain ahead of peers.

 

Internal transformation projects to align business segments more closely with emerging technologies and services, including restructuring talent and spinning out or separating business units, will help vendors reposition and better compete for new opportunities. Additionally, offshoring and nearshoring will support vendors’ ability to deliver more cost-competitive contracts while also improving vendors’ profitability.

Conclusion

Competitive intelligence provides ongoing and context-specific guidance in the face of changing client needs and peers’ strengths and strategies. Keeping track of peer investments continues to increase in strategic importance to help vendors retain market share and capture projects with new clients.. Ensuring talent, business composition and positioning, and partner ecosystems are competitive with peers’ will further improve vendors’ stability by adding services capabilities and expertise, which will facilitate discussions and improve market leverage.

 

Maintaining a broader portfolio of services that address a wider range of digital, AI and cloud needs while also having partner expertise across a variety of IT environments will dictate vendors’ ability to compete effectively, expand presence and preserve existing client relationships.

 

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Unlocking Competitive Insights: Beginner’s Guide

What Is Competitive Intelligence?

As the term implies, “competitive intelligence” is a set of practices that make your organization more competitive. What competitors are doing is one piece of this intelligence, but not the entirety. The perceptions and behavior of end customers are other important components of competitive intelligence. Since customers are ultimately what drives opportunities and revenue, understanding how your organization and competitors are perceived in the market is necessary to improve competitive positions.

 

Another facet of competitive intelligence is ecosystem intelligence, which includes partnerships. No business in any industry can operate in a silo, making partnerships an integral part of how value is conveyed to customers and the market.

 

Lastly, to truly be effective, competitive intelligence across competitors, customers and partners needs to be wrapped in the context of an organization’s current business situation. This final layer takes a collection of facts and observations and turns it into intelligence that can improve an organization’s competitive position, otherwise known as “competitive intelligence.”

Understanding Competitive Intelligence for Businesses

Importance of Competitive Intelligence for Businesses

Competitive intelligence can provide a number of benefits:

  • Apples-to-apples comparisons: Operating a business on a day-to-day basis can provide a lot of insight and information on competitors, but oftentimes the volume of information can be more challenging to fully understand and put into a useful context. Competitive intelligence that uses a standardized set of criteria, often with financial performance as the comparative metric, gives more rigor and confidence when drawing conclusions about your business’s performance versus competitors’.
  • Strategy development: Mimicking or copying competitors’ business practices is not always a good idea, but understanding what is taking place in the market can be a good way to generate some potential options your business should consider. An awareness of where competitors are investing and what forms those investments are taking can be a sound starting place for evaluating your own strategy.
  • Investment validation: In a similar vein to the benefits of strategy development, understanding how much competitors are investing in certain areas and in which forms can provide support and validation when making investments. This intelligence does not guarantee success or failure but at least provides an external point of reference that confirms other businesses are behaving in a similar fashion.

Key Objectives of Competitive Intelligence

  • Identify a key question or objective for the intelligence: Trying to learn everything about a competitor is not a realistic or feasible objective for intelligence. Breaking down the decisions your organization is trying to make so the intelligence can be targeted is the first step to make competitive intelligence valuable.
  • Identify the right competitors: This will partially be based on the first step above, but it’s a good second step to ensure the intelligence aligns to the outcome. Based on the key premise, understanding which competitors are more valuable than others helps focus the intelligence and research. This is where data points collected during business operations can help guide the decision making: Are there things being heard by the sales team or in customer conversations that warrant a deeper understanding?
  • Connect intelligence to the business operations and planning: Aligning to business strategies and outcomes is how competitive intelligence actually delivers value, so it’s best to have that coordinated early. Competitive intelligence should not be stored in a library but tied into ongoing business improvement and change.

The Process of Collecting and Analyzing Competitive Intelligence

Design and Standardization

Everything about operating in the information technology market is complex, including the offerings themselves, the web of partnerships and alliances involved in solution development and distribution, and finally the customer environments into which these solutions are deployed. For this reason, the boundaries, parameters and definitions of competitive intelligence are important to define upfront.

Research Methodology

After parameters and definitions for the study are defined, it’s important to next outline the methodology to be used for the research. Most times, a thorough secondary research effort provides a baseline for the intelligence. Nowadays, there is a wealth of sources available, including government financial filings, investor presentations, social media content and news outlets, that can provide quite a bit of competitive information.

Beyond those tactics, the broad realm of primary research can be used to dive deeper into specific questions. The target and method for that primary research vary quite a bit, however. If statistical feedback on customer behavior and perceptions is needed, then a survey is the best methodology. For more emerging topics, qualitative interviews can be the best medium. For more competitive studies, understanding key executives’ strategy and logic around taking certain approaches can be invaluable to connect the dots and provide actionable intelligence from the research.

Relevance for Your Business

For every competitive intelligence study, tying the key findings back to your own business is a critical step. No two companies are the same, so learning from competitors’ strategies and investments is helpful but not always directly applicable. To translate research into intelligence that is actionable, you need to take into account the nuances of your organization’s current state in the market, including strengths and weaknesses and existing perception among customers. No changes should be made without considering all the peripheral factors and existing stakeholders. The best way to make intelligence relevant is to include your own organization within the context of the study.

Implementing Competitive Intelligence in Your Business

A well-conducted competitive intelligence study is designed from the outset to be implemented into your business:

  • Definitions and parameters are clear upfront to make sure the findings are relevant to your business, markets and customers.
  • The methodology chosen is best suited to the types of intended actions and outcomes.
  • All internal stakeholders have been informed and included throughout the process to avoid surprises and minimize resistance to new changes and strategies.
  • The findings of the study have been framed within the context of your existing business.

Conclusion

When used effectively, competitive intelligence can be a powerful tool for your business. Operating in a competitive market, there can be a lot of uncertainty. Is your strategy aligned to what customers want? Are you overspending on certain initiatives? Are you missing potential opportunities to earn more revenue or reduce expenses?

 

For all of these fundamental questions, competitive intelligence can provide more certainty when making business decisions and ultimately increase your alignment to prevailing trends in the market. However, for competitive intelligence to deliver that benefit to organizations, the design and context of the intelligence are critical.

 

Narrowing in on key areas of research, with parameters and definitions clearly identified at the onset, is a best practice for getting started with competitive intelligence. On the back end, wrapping those pieces of intelligence in a final layer of context is the most effective way to realize the value from competitive intelligence efforts.

 

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How to Gain Cloud Market Share in 2024

Current Cloud Market Landscape

The cloud market has been on a more than 15-year growth trajectory that rewarded leaders for establishing scale above all else. Early-to-market vendors, such as Amazon Web Services in infrastructure and Salesforce in SaaS, capitalized on the consistent market expansion to establish themselves as not only some of the largest cloud providers but also the largest vendors in their market segments across all delivery methods.

 

However, those firms also experienced some of the most dramatic slowdowns in revenue growth as the market softened in 2023. Part of that slowdown is undoubtedly the “law of large numbers,” meaning growth slows as size increases, but it also reflects a broader market shift toward growth created by new features, capabilities, and go-to-market programs.

Watch 2024 Cloud Predictions session: GenAI and the Cloud Revolution of 2024

Strategies to Gain Cloud Market Share in 2024

In 2024 we expect vendors that successfully implement the following strategies will become growth leaders in the cloud market:

Effectively Monetize Next-gen Features for AI-led Growth

While the market for GenAI and AI solutions more broadly is still developing, the investments from end customers appear to be very real and meaningful. Despite the intent to invest and spend, there are many hurdles for vendors to clear before they can start recognizing the revenue opportunity.

 

These hurdles include identifying and articulating use cases, measuring benefits and returns, implementing pricing models that work for both vendors and customers, and developing an ecosystem to support all these tactics. Vendors that make progress tackling these challenges stand the best chance of realizing AI-led growth in 2024.

Expand Addressable Markets

The benefits of an ecosystem have been clear for decades, but for many IT and cloud vendors, the changes to their business models have been too significant to overcome. However, in an environment where cloud vendors are experiencing slower growth and still trying to control expense levels, the ecosystem model is even more impactful.

 

Proficiency in orchestrating service partners, ISVs, resellers, and joint solution alliances around core offerings will be another growth driver for vendors in 2024.

Orchestrate Multivendor Partnerships

Managing a customer base that spans traditional legacy solutions and cloud-delivered ones has been a challenging task. To date, it has been simpler and easier for born-on-the-cloud providers to use a disruptive model to sell a simplified set of offerings to establish their position in the market.

 

However, there is now an advantage for multimode providers in controlling the transition to new solutions and delivery methods in a slower-growth environment. In the clearest example of this advantage, SAP has been able to sustain growth in 2023 even as its more cloud-dependent peers have experienced the impacts of the market slowdown.

 

The maturation of AI opportunities will also play a role in this advantage, as customers may end up with data models stored in a variety of places within their IT landscape, based on performance and security requirements.

Conclusion

In 2024 the cloud landscape will become segmented between vendors that can sustain high rates of growth and expansion and those that cannot. Simply providing cloud services at scale is no longer enough for vendors to gain cloud market share. More complex strategies will define the cloud leaderboard in 2024. Additionally, delivering AI-enabled next-generation capabilities and nurturing ecosystems will garner investment despite the slower market growth and macroeconomic uncertainty.

 

To learn more about TBR’s predictions for the cloud market in 2024, download your free copy of Top Cloud Predictions for 2024, featuring a look at GenAI and cloud evolution in 2024 and beyond.

MWC24: AI, Private Networks, Cloud, Network APIs and More

Mobile World Congress (MWC) is widely regarded as the world’s most important event for the telecom ecosystem. The annual event sets the tone for the industry in key trends and market developments. Indicators suggest MWC24 will highlight some of the ways the telecom industry is leveraging and planning to leverage key technologies and concepts (e.g., AI, 5G-Advanced, 6G, private networks, edge computing, cloud-native networks, and network APIs) to achieve business objectives and outcomes.
 

Join Principal Analyst Chris Antlitz and Senior Analyst Mike Soper Thursday, March 14, 2024, for an exclusive deep dive into their top takeaways from MWC24, including their thoughts on how the aforementioned technologies are likely to drive technology and business model disruption and impact markets.
 

In This FREE TBR Insights Live Session on Top Takeaways From Mobile World Congress 2024 You’ll Learn:

  • How the telecom industry intends to derive value from AI
  • How enterprises are progressing in their digital transformations and incorporating private networks
  • How the telecom industry is progressing on its journey to cloudified, AI-driven, next-generation networks

 

TBR webinars are held typically on Thursdays at 1 p.m. ET and include a 15-minute Q&A session following the main presentation. Previous webinars can be viewed anytime on TBR’s Webinar Portal.
For additional information or to arrange a briefing with our analysts, please contact TBR at [email protected].

Open RAN Adoption in 2024

The open RAN market is developing slowly due to technological complexity and relatively high cost compared to classic RAN. These factors mean the open RAN market is unlikely to scale to mainstream adoption in 2024.

Current Trend in Open RAN

Despite heavy (and sometimes excessive) marketing by vendors and hope among communication service providers (CSPs) around open RAN, the reality is that the technology remains immature.

 

Open RAN gear has been implemented successfully and is running live traffic in a few commercial networks (mostly in greenfield environments) in various parts of the world, but significant gaps still need to be closed in feature parity, performance parity and implementation cost parity with traditional RAN before open RAN can truly replace or augment traditional RAN.

 

This inflection point remains at least another year away, and until this occurs, open RAN will likely remain a very small portion of the overall RAN market.

Watch 2024 Telecom Predictions session – 2024 Telecom Industry Outlook: Navigating Macroeconomic and Industry-specific Turbulence

Open RAN Outlook for 2024

CSPs that have been clamoring for open RAN remain committed to the technology, but there is increasing acceptance that open RAN is not ready to be commercially deployed at scale (especially not in areas of the macro layer that are heavily trafficked) as a viable alternative to traditional, purpose-built RAN — and may not be viewed as ready at least through 2024. As such, open RAN will continue to have a limited impact on the RAN market in 2024.

 

Graph: CSP 5G Spend Forecast by Ran Architecture 2022-2027E

Conclusion

CSP urgency to stay competitive from a time-to-market perspective in some markets has prompted many CSPs to continue down the traditional RAN architecture path, at least for their initial 5G deployments because this architecture is proved, ready and currently able to be scaled faster than open RAN and/or vRAN.
 
Significant hurdles (e.g., feature parity, performance parity and implementation cost parity gaps relative to traditional RAN) still need to be overcome for open RAN to commercialize, mature and scale, especially within brownfield network environments. Thus far, open RAN deployments have been primarily limited to greenfield networks, such as DISH Network and Rakuten Mobile, where the technology is easier to roll out.

 

vRAN, on the other hand, has been commercialized and is gaining traction in the broader RAN market, with key CSPs like Verizon deploying the technology at scale. TBR estimates more than 60% of the open RAN and vRAN segment will be vRAN through the forecast period.

 

Ultimately, CSPs will rally around an open vRAN architecture because it promises a range of benefits, including agility and greater cost efficiencies compared to the traditional RAN architecture (open vRAN is theoretically able to provide cost savings in excess of 50% versus traditional RAN, representing a major incentive for CSPs that are trying to mitigate cost pressures amid the inexorable rise in data traffic on their networks).

 

To learn more about TBR’s predictions for the telecom market in 2024, download your free copy of Top Predictions for Telecom in 2024, featuring a look at the telecom industry response to macroeconomic and industry-specific challenges.

Expectations for AI PCs in 2024

What Is an AI PC?

AI PCs have created significant buzz in an otherwise commoditized industry where demand has plunged since the accelerated pandemic buying cycle of 2020 and 2021. The definition of AI PC varies by PC OEM and silicon provider, but there is consensus that at its core AI PCs are purpose-built machines meant to enable accelerated AI workloads by leveraging specialized hardware that can include a neural processing unit (NPU).

 

However, in this current phase of AI PC, hardware is well ahead of software development. With Intel starting shipments of its Meteor Lake processors in December 2023, PCs with NPUs are beginning to come to market in volume albeit applications that require specialized AI PCs to run are few and far between.

 

Understanding that despite the bright future of AI PC, near-term commercial PC refreshes could potentially be delayed as organizations await the development of the first “killer application” that markedly differentiates performance between these new AI-optimized machines and PCs that are presently deployed.

Watch TBR Senior Analyst Ben Carbonneau Discuss Predictions for the AI PC, and the Devices Market as a Whole, in 2024

Predictions for the Devices Industry in 2024

Prediction: PC OEMs continue to await the ramping of the post-pandemic PC refresh cycle, anticipating low-single-digit market growth in 2024.

Prediction: The introduction of AI PCs will impact the rate of commercial PC refresh in 2024.

Prediction: Windows on ARM will gradually gain momentum in the near- to long-term as ARM-native Windows applications are developed and as Microsoft works to mitigate issues associated with backward compatibility.

 

TBR’s Devices market and competitive intelligence research covers the interrelated ecosystems of device vendors, platform providers, supplier and technology partners across consumer and commercial spaces. Each quarter we publish competitor and market benchmarking as well as market sizing, vendor positioning, strategies and customer adoption trends for the market as a whole. Additionally, we publish individual analysis on Apple, Dell Technologies, HP Inc. and Lenovo Group.

 

To learn more about TBR’s predictions for the devices industry in 2024, check out our recent interview with Senior Analyst Ben Carbonneau.

GenAI Expectations for Enterprise Buyers in 2024

GenAI and Enterprise Buyers

In 2023 we wrote: “Automation will lower costs and AI will transform businesses.” A year later, this trend is even more pronounced, largely accelerated by the advent of generative AI (GenAI).

 

GenAI is new and exciting, but buyers’ realities and priorities did not change just because GenAI came along, which will force vendors to cite tangible use cases that minimize disruption and maximize ROI.

 

We did not see GenAI disrupting the technology and services market to the extent it did in 2023, and we do not recall a single conversation with vendors and enterprise buyers prior to November 2022 in which the term GenAI was even mentioned. However, the increase in macroeconomic headwinds is forcing market participants to rethink how to best position their portfolios, go-to-market strategies and commercial models.

Watch 2024 Digital Transformation Predictions session: Navigating GenAI in Digital Transformation in 2024

2024 GenAI Outlook for Enterprise Buyers

The GenAI hype has raised buyers’ expectations that the implications of the technology have become more clear, increasing pressure on technology and services vendors to deliver value — starting with use cases and rapidly pivoting toward outcomes.

 

Of course, for any of these aspirations to happen at scale, one must take a closer look at how well prepared enterprise buyers are in their data architectures, IT stacks and, most importantly, their people. Buyers are somewhat conditioned that their third-party services and technology providers will constantly try to nudge them and introduce new technologies. The current environment is no different, but what makes GenAI more special is the hype that GenAI can optimize costs while driving new growth areas.

 

However, simply adding GenAI to IT modernization and/or cloud migration projects does not serve everyone well and really just prepares them for the long play. And it is certainly a long play, especially as less than 10% of global enterprises have a defined data strategy, according to industry reports.

 

But vendors must act now, as discretionary spending has stalled and enterprise buyers are spending only on projects that have greater organizational impact — if at all — rather than testing new frameworks or experimenting with proof-of-concept innovation-wrapped discussions. So, the most immediate opportunity for GenAI to make an impact is for vendors developing function- and/or department-specific models.

 

Developing large language models (LLMs) is not cheap, and organizational data typically lives in silos — departmental or functional. We see vendors starting to dabble with the idea of introducing “narrow” language models that are built off the same departmental data that for decades vendors and enterprises have aspired to make interoperable. It is possible that GenAI could force enterprises to raise their organizational walls even taller, which would necessitate different commercial and partner models.

Conclusion

Vendors must act now. Establishing more defined use cases around function- and/or department-aligned data will pave the way for the technology as vendors seek to scale adoption across industries. Even if adoption cannot be scaled in the near term, being entrenched early in a client’s GenAI journey should lead to long-tail revenue.

 

To learn more about TBR’s predictions for digital transformation in 2024, download your free copy of Top Predictions for Digital Transformation in 2024, featuring a look at the path to GenAI-enabled growth in this new year.