The global technology industry is set for a monumental shift, with IT spending projected to reach $6.3 trillion by 2027 and expected to double to over $10 trillion by 2034, according to key predictions shared by Canalys during its 2024 Channel Forum events held in Berlin, Miami, and Bali.
The report outlines critical trends that will reshape the tech landscape over the next three years, driven by advancements in artificial intelligence (AI), cybersecurity, semiconductor restructuring, and regulatory oversight on data center energy consumption.
Global IT Spending to Cross $6.3 Trillion by 2027
The Canalys report projects a robust trajectory for global IT spending, set to hit $6.3 trillion by 2027, with growth further accelerating to surpass $10 trillion by 2034. This surge will be driven by a combination of AI advancements, cybersecurity investments, and infrastructure modernization. Businesses worldwide are expected to integrate AI-powered software across their operations, enhancing productivity, automating tasks, and extracting actionable insights from large datasets. Additionally, AI-capable PCs and enterprise hardware systems will play a significant role in boosting productivity and efficiency across industries.
Investment in cybersecurity solutions will also see substantial growth as organizations grapple with increasingly sophisticated cyber threats. Cloud infrastructure services, on the other hand, are expected to rebound strongly as companies shift focus to modernize their digital infrastructure to support Generative AI capabilities.
Managed IT services will remain integral, acting as enablers for enterprises to efficiently embed AI into their operations and long-term strategic planning. The forecast indicates that this investment surge is not merely operational but will also address strategic challenges, marking a profound shift in the way technology drives business growth globally.
Intel Poised for Structural Overhaul by 2027
The Canalys report predicts a significant structural transformation for Intel by 2027, potentially leading to the separation of its foundry business from core operations. This move would allow Intel’s foundry division to focus exclusively on manufacturing and competing with established giants like TSMC and Samsung. Despite notable deals such as AWS selecting Intel’s foundry services, the company faces trust deficits with major fabless chip companies that have traditionally viewed Intel as a competitor.
The foundry unit remains heavily dependent on U.S. government funding and strategic backing as part of larger initiatives to strengthen domestic semiconductor manufacturing capabilities. The appointment of David Zinsner and Michelle (MJ) Johnston Holthaus as co-CEOs signals Intel’s attempt to address its internal challenges and chart a sustainable path forward.
If Intel successfully separates its foundry operations, it could create an environment conducive to attracting new customers and regaining market confidence. This restructuring marks a pivotal moment for Intel, which will determine its ability to remain a relevant force in the global semiconductor industry.
Cybersecurity Consolidation: Four Leaders to Emerge by 2027
While cybersecurity remains fragmented, Canalys predicts that by 2027, four dominant cybersecurity platform vendors will emerge from a pool including Cisco, CrowdStrike, Google, Fortinet, Microsoft, Palo Alto Networks, SentinelOne, and Trend Micro. Despite years of speculation about market consolidation, the cybersecurity landscape continues to see the rise of new vendors as digital threats evolve rapidly.
The winners in this space will not necessarily offer an all-encompassing solution but will focus on building highly integrated, open platforms that allow seamless collaboration with third-party vendors and ISVs. Additionally, vendors with robust partner ecosystems—spanning financial services, insurance, and marketing—will have a competitive edge.
They must also adopt partner-centric strategies, rewarding contributions at every stage of the customer lifecycle, from initial engagement to long-term account management. Success in cybersecurity will hinge on these vendors’ ability to articulate clear value propositions for their partners and expand their ecosystems effectively.
Funding Challenges for 95% of Distributors in the AI Era
The AI revolution brings not only opportunities but also significant financial challenges for technology distributors. By 2027, 95% of distributors will struggle to secure funding as they adapt to the complexities of the AI-driven digital economy. Building marketplace platforms capable of supporting AI services is projected to require investments exceeding $1 billion per distributor, a financial burden many may find insurmountable.
Distributors are now expected to play a more active strategic role by participating directly in customer discussions and contributing to long-term digital strategies. This shift requires substantial investment in technology infrastructure, talent acquisition, and operational overhauls.
Without adequate funding, distributors risk falling behind in a competitive landscape where scalability and digital capabilities define market leadership. The Canalys report highlights the urgent need for distributors to explore new funding channels and form strategic alliances to weather the financial strain posed by AI integration.
EU to Cap Data Center Electricity Consumption at 5% by 2027
With the rapid rise of Generative AI workloads, data centers are consuming more power than ever before. The report predicts that by 2027, the European Union (EU) will introduce regulations capping total data center electricity consumption at 5% of national grid capacity. This move is driven by concerns over energy shortages, environmental sustainability, and increasing pressure on utility grids.
AI technologies, particularly those associated with Generative AI, are projected to account for 45% of data center energy consumption. As society’s reliance on AI and digital services grows, regulators face mounting pressure to strike a balance between innovation and energy sustainability. Instances such as widespread blackouts or disruptions in water supply caused by data center energy consumption could trigger a more reactive regulatory stance.
For data center operators, this impending cap underscores the importance of adopting energy-efficient technologies and sustainable operational practices to align with regulatory requirements.
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Conclusion
The Canalys predictions for 2027 offer a clear roadmap for the global technology industry. They highlight major growth drivers, structural changes, and regulatory challenges. With IT spending projected to surpass $6.3 trillion by 2027, investments in AI, cybersecurity, semiconductor manufacturing, and energy-efficient infrastructure will play crucial roles in shaping the industry’s future.
However, the journey ahead won’t be without hurdles. Distributors face mounting funding challenges, while cybersecurity vendors must focus on integration and ecosystem expansion. At the same time, data center operators will need to prepare for strict energy consumption regulations.
As the industry undergoes this transformation, success will hinge on collaboration, adaptability, and strategic investments. These elements will be critical for navigating the rapidly evolving technological landscape effectively.
