The momentum for enterprise investment in emerging technologies remains robust with nearly half (47 per cent) of businesses investing in generative artificial intelligence (GenAI), compared with 43 per cent in 2024. Forty-three per cent of survey respondents are investing in internet of things (IoT) and 33 per cent is investing in 5G technology, reflecting an upward trend from 39 per cent and 27 per cent respectively in 2024. The latest EY Reimagining Industry Futures study emphasises the need for Information and Communications Technology (ICT) suppliers to adapt their strategies to effectively support businesses in achieving successful digital transformation.

At the same time, decision-making inside enterprises is diffusing more widely across the C-suite, with 49 per cent of CEO respondents now involved in emerging technology strategy, including choice of suppliers. The EY study finds that organisations where the CEO is a key decision-maker are further along the investment curve. Over half (51 per cent) of responding businesses with CEOs involved in new technology decisions are investing in GenAI, compared with 44 per cent of organisations where the CEO is less involved.

Businesses are struggling to convert technology trials into live deployments

Despite the encouraging upward trend in investment in emerging technologies, the research finds that too many organisations are still only in trialing mode. An example of this is investment in IoT, while this is rising year-on-year, the proportion of businesses with active IoT deployments is in decline, slipping to 16 per cent this year compared with 19 per cent in 2024. Active deployments of edge computing are also flat year-on-year at 22 per cent – while only 1 per cent of organisation responding have active deployments of GenAI.

Rob Atkinson, EY UK&I Technology, Media & Entertainment and Telecommunications Market Leader, commented: “As well as posing a challenge to unlocking long-term value, a failure to progress beyond the trial phase means businesses risk missing out on the combined impact of different technologies deployed together, an area where almost four in five (79 per cent) organisations are looking to achieve more. There could also be a danger that too many emerging technologies initiatives will be conducted in isolation, limiting the resulting business benefits.”

Awareness of suppliers is low, complicating vendor selection

Businesses are finding it challenging to make informed decisions about which ICT providers can best help them on their transformation journey. Seventy-three per cent of survey respondents say they need a better understanding of the changing supplier landscape, reflecting an environment where collaborative ecosystems, featuring alliances between different technology providers are becoming the norm. More than half (56 per cent) of survey respondents believe they lack awareness of their technology suppliers’ additional partners. In addition, less than a third of organisations have high awareness of new mobile technology capabilities such as network application programming interface (32 per cent) and network slicing (26 per cent).

Adrian Baschnonga, EY Global Technology, Media & Entertainment and Telecommunications (TMT) Lead Analyst, added: “Organisations view ecosystem collaboration as a route to access new skills and capabilities but lack understanding of changing supplier ecosystems. With many companies under pressure to consolidate vendors, suppliers should prioritise their ecosystem and alliance strategies by concentrating on key partners and adapting their operating models and go-to-market approaches accordingly. They should also identify and regularly reassess the verticals they aim to serve, working to ensure a clear distinction between sector-agnostic and vertical-specific capabilities.”

Enterprises favour suppliers that deliver business outcomes

A third (33 per cent) of survey respondents described their ideal vendor personas as having the ability to provide measurable business outcomes and ability to provide access to a robust partner ecosystem (33 per cent). The ability to scale and integrate different technologies is also important to one in four (25 per cent) of those surveyed. These attributes rank ahead of value-based pricing (10 per cent), signaling that organisations are looking well beyond cost advantages when evaluating suppliers.

Appetite for supplier consolidation means improving customer mindshare is critical

Enterprises’ challenges around supplier awareness could ultimately feed into decisions to consolidate their vendor base. More than one-third (35 per cent) of survey respondents across sectors are planning to reduce the number of ICT vendors they use in the coming 12 months, driven by efforts to improve security, lower overall expenditure and reduce technology complexity.

Atkinson concluded: “The intention to focus spending on a smaller number of key suppliers makes it even more important that ICT providers present themselves as effective ecosystem orchestrators, able to provide end-to-end solutions with the assistance of partners and intermediaries. As part of this, suppliers should take care to underline capabilities that extend beyond their core products. While enterprises remain committed to embracing leading-edge technologies like GenAI, IoT and 5G, they are facing challenges in translating their investments into real business value. Now is the time for IoT suppliers to reposition themselves as holistic partners to their business customers and help them realize the full benefits of their spending on digital transformation.”

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Categories: Articles, Equipment, IoT, Markets, Research

Tags: AI, EY, ICT, IOT