AI drives a 30% increase in IT modernization investment, but companies are not ready.

Couchbase, Inc. (NASDAQ: BASE), the cloud database platform company, has released the results of its seventh annual survey targeting IT leaders worldwide. The study, which involved 500 top IT decision-makers, shows that investment in IT modernization will increase by 27% in 2024, as companies look to leverage new technologies such as artificial intelligence (AI) and edge computing, while facing increasing productivity demands.

The survey reveals that companies plan to spend an average of $35.5 million on IT modernization in 2024. Over a third of this investment will be allocated to AI, with an average spend of over $21 million on technology during 2023-2024 and $6.7 million specifically on generative artificial intelligence (GenAI). This focus on AI is driven by the need to prototype and test new ideas quickly, make employees more efficient, and identify and capitalize on new business trends.

Couchbase’s study also highlights that 59% of companies are concerned about their ability to manage data in the face of GenAI demands without significant investment. Matt McDonough, Senior Vice President of Product and Partners at Couchbase, emphasized the importance of a robust data architecture: “Companies must ensure that their data architecture can support the demands of GenAI, as without fast access to accurate and well-managed data, this technology can lead to erroneous decisions.”

Despite the increase in modernization investment, reliance on legacy technologies is hindering progress. The survey indicates that the use of outdated technologies that cannot meet new digital requirements is causing projects to fail, suffer delays, or be cut short, resulting in an average annual investment loss of $4 million and an 18-week delay in strategic projects.

Companies are ramping up their investments in AI tools to help developers work more effectively and create new GenAI applications more quickly. 73% of respondents plan to increase investment in AI tools, and 65% believe edge computing will be crucial in enabling new AI applications by reducing latency and bringing data and computing power together.

However, 64% of respondents believe that most organizations have rushed to adopt GenAI without understanding what is necessary to use it effectively and securely. This haste has led to 26% of companies diverting funds from other areas, mainly security and technical support.

60% of respondents are concerned about whether their organization has enough computing power and data center infrastructure to support GenAI, and 61% indicate that their social and environmental responsibilities limit the adoption of GenAI unless based on more efficient infrastructures. Additionally, 66% believe they would need to invest in multiple databases to obtain all the necessary capabilities to support GenAI, despite the existence of solutions that cover all multipurpose access needs.

Companies are under pressure to continuously improve end user experiences. 61% of respondents mentioned that their applications face an expectation gap in an average of 19 months for consumer-oriented applications and 20 months for internal applications. To counter this, 45% believe adaptability will be the most essential feature for applications, allowing the application to change what it offers the user as needed.

Matt McDonough concluded: “Investing in data management and the right infrastructure architecture will help unlock the transformative potential of GenAI. Vast and complex applications are not needed to enhance productivity and meet expectations; an adaptive application that uses GenAI to improve the end user experience will be equally effective with a much faster time to market.”

Source: CouchBase (https://www.couchbase.com/press-releases/ai-fueling-it-modernization-spend/)

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