With 2024 ending it’s worth checking in on everything we’ve learned from the CxOs, buyers and sellers of enterprise technology.

Here's everything we learned in 2024:

Some predictions don't quite work out. Yes, I went back into the archive to look at the trends to watch for 2024 published in January. Here's the breakdown:

  • Enterprises did refocus on data strategy to make generative AI work and there was a bit of disillusionment with genAI. Not that generative AI was a complete dud, but the reality is that it was a building block on the road to agentic AI. And transformation projects, which included a lot of AI, faced more scrutiny.
  • On the flip side of 2024 predictions, that hybrid model for genAI is still on the drawing board, but may appear in 2025. Customers were miffed about enterprise technology price increases, but few did anything about it. I also noted that the economy would be volatile in 2024, but the stock market and leading indicators chugged along for a goldilocks scenario. Tech mergers and IPO remained no shows even though I bet otherwise.My biggest flop was this one: "Enterprises embrace hybrid and remote work and start unloading commercial real estate." You can stop laughing as you read your return to office memos.

See: Constellation Research Presents the 2024 Enterprise Awards | Constellation Research's Connected Enterprise 2024: All the takeaways

Enterprise software is at a crossroads. Enterprise software disruption was a theme we returned to repeatedly in 2024. The seat-based business model isn’t going to fly when AI starts replacing people. Vendors are navigating the rise of marketplaces, models that can keep revenue growth going and balancing margins since genAI isn’t cheap. Most vendors want to be a platform, but we all know there are only a few. Enterprise buyers are pushing back on price increases because software vendors can’t keep gobbling up all the operating expenses.

What remains to be seen is whether enterprises buyers have any leverage. Broadcom’s acquisition of VMware caused a lot of complaints, but it’s hard to argue that the deal wasn’t a financial success.

Hyperscale cloud providers are only growing more powerful. Yes, cloud providers give enterprises more agility and save them money. But these hyperscalers hold a lot of power. AWS, Google Cloud and Microsoft Azure had banner years with annual run rates of $110 billion, $45.6 billion, and $156 billion, respectively* . Oracle Cloud Infrastructure did too. What remains to be seen is whether a new breed of cloud providers focused on AI—or even hybrid approaches—can check the market power. AI is a cloud workload—especially since the technology is developing so fast—and looking down the road quantum will be a cloud-first workload too. Whether you standardize on one cloud provider or mix and match infrastructure will be your most important enterprise decision.

*Microsoft doesn’t break out Azure revenue so the run rate is calculated on commercial cloud revenue.

AI has impacted industries well beyond technology. AI has become a hot topic on earnings calls beyond the technology sector. GenAI and automation have fueled expanding profit margins at companies such as Lowe’s, Exxon, Rocket and Equifax. Those examples are just a few. The productivity boom from AI has expanded to multiple sectors.

Agentic AI has staying power. Agentic AI pushed generative AI aside for buzzword of the year, but the idea goes beyond vendor marketing. GenAI was a start, but being able to string together models into a flow that automates and executes work is a game changer. There’s a lot of work ahead, but agentic AI is off to a good start.

Here’s the digital labor analogy that Salesforce outlined when it launched Agentforce 2.0 this week.

However, the spoils of the AI revolution largely stayed with the infrastructure layer. While AI is promising for multiple industries, the market cap expansion went to infrastructure players. We’re still in the picks and shovels stage of the AI revolution and that means Nvidia has been raking in cash. The big question is when the AI spoils will spread beyond infrastructure.

Business transformation is alive and well. The Constellation Research community of CxOs continually outlined projects that transform their businesses away from the fanfare. Business transformation is about continual improvement, change management and process. It’s difficult to synthesize all the conversations we’ve had, but here are a few.

2024 in Constellation Insights

 

Business Research Themes

Innovation and Product-led Growth, Data to Decisions

Roles

Chief Information Officer

Tags

#AI #artificialintelligence #machinelearning #ML #generativeAI