Digital transformation spend will grow from 9% of enterprise revenues to 11% by 2030; with AI and mobile connectivity the top areas for investment
25 November 2024, London: A new report from GSMA Intelligence (GSMAi) shows that enterprises are focusing more on improving cybersecurity and boosting revenue rather than cutting costs, as they speed up their digital transformation. The research, “The rise of digital industries: navigating enterprise needs, investments and supplier decisions” reveals that 60% of businesses prioritise revenue growth, customer experience, and competitive positioning over cost-related goals for their digital transformation.
Investment in digital technologies is projected to increase substantially over the next six years to meet business needs, with organisations surveyed planning to allocate 9% of enterprise revenue during 2024–2026, growing to 11% during 2027–2030.
Focus on 5G and AI
85% of enterprises see 5G networks and connectivity as important, with almost half marking them as extremely important, for their digital transformation success. Enterprises plan to spend 21% of their digital transformation budgets on connectivity and associated devices, 13% on mobile (including 5G), and 8% on fixed and Wi-Fi networks. Enhanced security (57%) and connectivity (52%) are the top 5G features they value most and investment in 5G between 2024 and 2030 is projected to be 2.5 times more than in 4G, especially in high mobility sectors such as automotive, transportation, logistics and warehousing.
AI is also a significant factor, making up 14% of enterprise technology expenditures, implemented to elevate customer experiences, strengthen security protocols and increase productivity among employees. Generative AI has swiftly gained importance in the digital strategy of companies, with 90% of them incorporating it, but only 33% are utilising it in advanced ways, indicating potential for further development.
IoT adoption is progressing, with businesses transitioning to more advanced use of IoT technology, including greater use of 5G. Moreover, enterprises show high interest in using eSIM for their IoT deployments, due to its scalability and enhanced security features. Enterprises expect eSIM to account for 42% of the total IoT cellular market by 2030.
Enterprise wants full stack suppliers
As enterprises accelerate their digital transformation journeys, they are opting to work with a broad range of suppliers to meet their technology needs. The research shows a preference for generalist suppliers – such as hyperscalers and telecoms network/equipment vendors – that offer nearly full-stack solutions.
Pablo Iacopino, Head of Research at GSMAi, said: “Enterprises of all sizes are eager to advance their digital transformation and are making the necessary investment. As a result, supplier competition is fierce. Telcos need to go beyond just providing network services since enterprises are increasingly looking for partners who can help them throughout their full digital transformation journeys, combining technologies such as 5G, AI, IoT and cloud to improve efficiency, security and drive revenues. The cost of implementation and complexity of tech integration are the top two deployment challenges faced by enterprises. This means the role of tech orchestrator will become even more important, and demanded in the future, which presents new opportunities for multi-service suppliers.”
Financial services leads in AI; automotive and mobility push 5G
The report highlights the vertical sectors driving digital transformation each with different priorities and technology investments:
- Financial services: 92% are already using generative AI technology, and they lead in both wider AI adoption (92%) and spending on digital transformation (10.4% of revenue).
- Media and entertainment: This sector leads in revenue growth as a top digital transformation objective, with 65% citing it as an extremely important objective. Also, 91% of media and entertainment enterprises are already using generative AI.
- Utilities and energy: 51% of utility and energy enterprises are making advanced use of cloud technology—the highest of all sectors. 37% are prioritising generative AI for their financial spending through 2026 and allocating 16% of their digital transformation budgets to AI in the longer term.
- Manufacturing and industrial: 33% of manufacturing enterprises identify a lack of internal expertise as a key challenge to AI deployment, the highest across all sectors. Manufacturing ranks high in its focus on cybersecurity, with 55% of enterprises making advanced use of these technologies.
- Transportation, logistics and warehousing: This sector shows strong engagement with AI, including working with MNOs for AI solutions in any forms. This sector also stands out for its focus on IoT, with 36% of enterprises making advanced use of IoT technologies.
- Healthcare: Healthcare enterprises allocate 14% of their digital transformation budgets to AI, and 41% of enterprises cite cybersecurity as one of their top five areas of financial spending over the next few years.
- Automotive and mobility: This sector leads in terms of its focus on 5G, with 54% of enterprises rating 5G as extremely important to digital transformation.
- Retail: 63% of retailers prioritise revenue growth as an extremely important digital transformation objective. They are also quickly adopting generative AI, with 87% using the technology and 34% making advanced use of it.
- Public sector: The public sector is investing heavily in digital transformation, allocating 10.1% of its revenues to these initiatives.
- Agriculture, forestry, and fishing: This sector shows the lowest digital transformation score overall, leaving potential for improvement in areas such as IoT, AI and 5G.
To explore the full findings and insights from the Global Digital Transformation Survey 2024, full access to the report and dashboard can be found here.
In addition, there is a GSMAi webinar on 3 December (10:30am – 11:30am GMT) where Pablo Iacopino and Christina Patsioura, IoT and Enterprise Research Lead Analyst from GSMAi, will explore the key findings and insights from the survey research, and their implications. Register here.
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