AI and cloud transformation dominate IT investment priorities for 2024: Rackspace Technology 

  • 65% of regional firms intend to boost IT investments in the next 12 months
  • In a year, 62% of firms have integrated generative AI into some or all processes

AI and cloud transformation dominate IT investment priorities for 2024: Rackspace Technology 

New research by Rackspace Technology, a leading end-to-end, hybrid multi cloud technology solutions company, in association with Dell and VMware, finds that despite ongoing economic uncertainty, businesses in the Asia Pacific and Japan (APJ) region are committed to prioritising their IT investments in 2024, particularly in transformative technologies such as artificial intelligence (AI) and cloud transformation.  

According to the 2024 IT Outlook Report, which surveyed 1,420 global IT professionals, 65% of organisations in the region plan to increase their IT investments over the next 12 months given the current economic climate. Moreover, AI dominates as the top priority, with 59% of APJ respondents identifying pervasive artificial intelligence as the technology that will have the most significant positive impact on their organisation over the next 12 months. 

AI and cloud transformation dominate IT investment priorities for 2024: Rackspace Technology The survey also underscores the continued adoption of the cloud. When asked about the makeup of their organisation’s IT infrastructure and how it will evolve over the next 12 months, edge computing, private cloud, and public cloud increased as a percentage of workloads, while data centers, colocation facilities, and mainframes declined.  

Srini Koushik (pic), president of Technology and Sustainability at Rackspace Technology said, these results highlight a decisive shift in artificial intelligence from the technical curiosity and pilot programmes in 2023 to accelerating business outcomes through the industrialisation of Responsible AI solutions in 2024. “In the cloud arena, the increased focus on the edge and private cloud indicate that organisations are simultaneously migrating more of their critical workloads while adopting a more sophisticated workload-aware aAI and cloud transformation dominate IT investment priorities for 2024: Rackspace Technology pproach to their overall cloud infrastructure,” he added.  

In 2024, the evolutionary impact of generative AI cannot be overlooked in the region. Specific to Malaysia, the National Artificial Intelligence Roadmap 2021-2025 signifies a pivotal stride towards technological advancement. 

“Embracing AI and cloud solutions aligns with our commitment to driving innovation, empowering businesses to leverage transformative technologies for sustainable growth. The survey's insights reinforce the importance of responsible AI integration and showcase the evolving landscape where AI evolves from pilot programmes to driving tangible business outcomes in 2024,” Sandeep Bhargava, SVP, Global Services and Solutions, Public Cloud Business Unit at Rackspace Technology said. 

AI Evolution  

As generative AI continues to mature and grow in importance, 33% of organisations say they have either completed prototypes and are taking projects into production or already have projects underway and plan to expand them, while another 65% of respondents are either currently ideating on the use of generative AI or plan to do so. 

AI and cloud transformation dominate IT investment priorities for 2024: Rackspace Technology Just 2% of respondents have no plans to use generative AI. Moreover, 62% of those surveyed say they will have generative AI either integrated into some processes or fully integrated into all processes in 12 months. 

While many organisations are using AI primarily for “table stakes” tasks such as sentiment analysis and code development, the use cases where respondents see the greatest expected benefit include security (54%), new product development (51%), increased productivity (46%) and enhanced speed and efficiency in existing work processes (41%) and increasing revenue streams (41%). 

At the same time, organisations report challenges in implementing AI programmes. 40% of survey participants acknowledge demonstrating the value of AI as a hurdle, while insufficient technological infrastructure support for AI was noted by 41%, followed by a shortage of skilled IT talent, at 30%. 

Organisations also continue to grapple with data governance policies and strategies in response to AI. Less than half (44%) of organisations have policies or strategies in place to address privacy concerns, and only 40% say they have addressed data bias.  

“While some organisations have already implemented AI-powered solutions, many are still in the early stages, grappling with the considerations and challenges associated with AI adoption,”

Koushik said. He added that the organisations are not just contemplating but actively addressing the issues associated with the widespread integration of AI into their business processes and operations, marking a crucial phase in their transformative journey. AI and cloud transformation dominate IT investment priorities for 2024: Rackspace Technology 

Cloud and Edge Trends Ascending 

The survey highlights an ongoing trend in terms of technology adoption. Edge computing is also becoming a priority, with 30% of organisations saying it will be part of their IT infrastructure makeup in 12 months, compared to 26% today. 75% of respondents say they are employing a hybrid cloud strategy today. 

More than half (56%) of organisations in APJ indicated that they are facing significant challenges for the workloads that they have migrated to the cloud. Survey participants identified security/compliance risks as their primary challenges in transitioning to the cloud, at 37%. This was followed by concerns such as resource shortage (35%) cost overruns (34%), resistance to change (30%), and a lack of stakeholder buy-in (23%). 

The Talent Search Dilemma     

As companies prioritise AI and cloud, securing and retaining talent remains a challenge, with 77% of respondents identifying a shortage of skilled workers as their leading concern. 42% of respondents in APJ also see paying more to fill critical roles, with the rapid pace of technology advancement cited as the leading cause for higher IT labor costs. 

Key roles that organisations in the region are struggling to hire include:  

1) 5G Specialists (55%) 

2) Data Engineers (45%) 

3) Cybersecurity Experts (43%) 

4) Data Scientists (41%) 

“The sustained pace and magnitude of technology advancements in AI, Cloud, Security, and other technologies demand an adaptable workforce that embraces lifelong learning. This challenge underscores the need for a different workforce strategy that prioritises adaptability, problem-solving, and continuous learning in addition to the latest technical skills to keep pace and drive innovation forward,” Koushik said.  


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