Looking ahead to 2025, leading technology architects see some glimmers of hope in the wider economy, leading to cautious optimism. Inflation has declined from record highs, and although cost pressures, economic volatility and geopolitical risks remain, leading technology companies plan to focus their investments on the technical infrastructure, software and data assets needed to realize the potential of AI and generative AI investments. To offset some of the financial and other impacts, such as increased carbon emissions, associated with the use of AI infrastructure and services, companies are taking a close look at how they can best leverage their investments to reap the benefits of AI while optimizing their spend.

Expand or defend: Cloud and AI

Overall, cloud and AI will be key areas of investment in 2025. Enterprises are investing even more heavily in the cloud, both for AI infrastructure and service support, and are migrating more of their workloads to the cloud. Into next year, technology architecture and delivery leaders will see a continued focus on AI, with some more specific recommended AI use cases requiring budget. With that in mind, technology leaders should increase or maintain their investments in these areas for 2025:

• Optimization methods for delivering workloads in the optimal cloud and at the optimal price
• TuringBots develop software faster, better and cheaper
• AI agents to increase employee efficiency and productivity
• VMware alternatives to mitigate massive cost increases
• Specialized Large Language Models (LLMs) and infrastructure for higher accuracy and lower costs
• API developer portals facilitate access to AI services

Reduce or avoid: Routine enterprise software apps

While technology budgets will increase in 2025, technology architects will only be able to free up enough budget for new investments and experimentation if they abandon certain investments that no longer make sense for their business. For many technology leaders, 2025 will see the abandonment of single-function enterprise applications or zombie applications resulting from long, unloved acquisitions of enterprise software mega-vendors. In particular, technology leaders should reduce or avoid investments in these areas:

• Single-function enterprise applications or zombie products
• Standalone hybrid cloud management solutions
• IT service desk without AI support

Important new technologies worth experimenting with

Technology leaders are closely monitoring new technologies that are still in the early stages of maturity but could positively change the business in the future. Many technology companies have learned some budgetary lessons from the rush to generative AI over the past two years. Even though economic conditions in 2025 are somewhat less constrained than in 2023 and 2024, technology leaders and CTOs should still closely examine the cost and budget impact of the new technologies they plan to test next year. In the upcoming budget cycle, technology leaders should consider evaluating these technologies (and allocating budgets to fund proof of concept) to determine organizational fit:

• AI PCs that can run LLMs locally
• AI cost management to control costs before they skyrocket
• Edge Intelligence to capture actionable insights from mobile and IoT devices

Learn more about these recommendations to optimize your budget with the 2025 budget planning guides. Here.

This article was written by Vice President and Chief Research Officer Paul McKay and originally appeared Here.