Global IT spending is projected to reach its highest level in 30 years, driven primarily by investments in artificial intelligence (AI) and cloud services. According to a report from the International Data Corporation, spending on hardware, software, and IT services is expected to rise by 14%, marking the fastest growth rate since 1996. However, the benefits of this spending surge are not being realized by Managed Service Providers (MSPs), as hyperscalers dominate the market by building extensive AI infrastructure and integrated platforms. This shift in control raises questions about the future value proposition for MSPs, who may find themselves increasingly marginalized.
Small businesses are experiencing hiring challenges despite a reported increase in job growth plans. The National Federation of Independent Business Jobs report indicates that 33% of small business owners have unfilled job openings, with 19% planning to create new jobs in the next three months. However, 56% of these businesses attempted to hire in November, with half citing a lack of suitable candidates. Compounding this issue, federal statistical agencies are facing significant staffing and budget cuts, leading to a decline in the availability of reliable economic data. This erosion of data could hinder small businesses' ability to make informed hiring and investment decisions.
In a notable leadership change, Jim Siders has been appointed CEO of Shield Technology Partners, an IT services platform focused on integrating AI with operational expertise. Siders aims to enhance service delivery through AI innovations, positioning Shield as a vital resource for businesses in sectors like construction and healthcare. This move reflects a broader trend of IT services being restructured as AI-driven platforms rather than traditional roll-ups, emphasizing the importance of operational discipline and clean data in leveraging AI effectively.
The episode highlights a concerning trend in corporate spending on AI, where companies allocate 93% of their budgets to technology and only 7% to the people who will utilize it. This imbalance can lead to a decline in trust among employees and an increase in the use of unapproved AI tools, complicating compliance and operational efficiency. For MSPs and IT service leaders, the key takeaway is the necessity to shift focus from merely adopting technology to fostering a disciplined approach to AI integration, emphasizing governance, workflow redesign, and clear decision-making boundaries to ensure that clients can navigate the complexities of AI effectively.
Four things to know today
00:00 Global IT Spending Hits 30-Year High as AI and Cloud Investments Accelerate, IDC Reports
05:24 Small Businesses Plan More Hiring but Still Can’t Find Qualified Workers, NFIB Reports
11:19 Deloitte: Lopsided AI Spending, Declining Trust, and Shadow AI Signal a Growing Management Failure
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