In enterprise technology you don't always have the answers, but that should never stop you from knowing the right questions. With that in mind, let's ponder a few questions now that the first quarter is closed and the second quarter is just ramping up. These themes are likely to reappear in our news and analysis in the months ahead.
Here’s a look at the big questions for the second quarter.
What's the state of enterprise tech spending? The first quarter earnings calls and outlook for the second quarter and 2025 are about to get really interesting. The enterprises reporting results in the second half of March mostly pointed to either a slowdown or a pause in spending.
Geopolitics are a big reason why enterprises can't plan ahead. You can expect a lot of tech vendors talking about elongated selling cycles, more deliberation over deals and spending pauses.
- Enterprise vendors starting to feel economic, federal government uncertainty
- Accenture Q2 solid, but federal spending on pause and customers cautious
For a glimpse of how CEOs are on the struggle bus with geopolitical planning, check out Restoration Hardware CEO Gary Friedman, who was volleying with analysts about his supply chain right as President Trump was announcing tariffs. "Like we're just really well-positioned right now. I think housing is the headwind. I guess the stock went down based on some of the numbers we reported and then it got killed because of a--oh shit okay--I just looked at the screen. I hadn't looked at it," said Friedman, who was talking as Vietnam was hit with a big tariff. "It got hit when the tariff came out and everybody can see in our 10-K where we're sourcing from. It's not a secret and we're not trying to disguise it by putting everything in an Asia bucket."
There were a lot of Gary Friedmans this week. And those CxOs all buy enterprise technology.
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What projects will get funded in a recessionary/stagflation environment? Optimization has been an ongoing theme in enterprise technology whether it's via automation or artificial intelligence. Some enterprises will look to reload in a downturn for the rebound. For instance, Rocket bought Redfin and Mr. Cooper in a move to consolidate the mortgage industry. These acquisitions are notable since they are also about acquiring the first-party data to feed models.
The time is now to position for the next economic cycle. How many enterprises will be able to reload?
Will mergers and acquisitions be justified based on first-party data? Rocket's acquisition spree (Redfin and Mr. Cooper) is notable because it's focused on buying the first party data that can be used in its models. However, there's an additional thread to consider here. Rocket covered why the acquisitions made sense based on 30 petabytes of data, but there are also good business reasons to make the purchases beyond training AI models. Rocket's acquisitions are based on industry consolidation and feeding the sales funnel too.
Will agentic AI be a wait-and-see affair? We've had the vendor announcements. We've had the slideware talking about orchestration layers. We've even had vendors rolling out agents throughout their platforms just waiting for customers to use them under a consumption model.
However, CxOs in the Constellation Research network are taking a measured approach to AI agents. Yes, these enterprise leaders are bullish on AI agents and the promise. However, CxOs also realize that their AI agents will need to be cross-platform, have communication standards, and include a heavy dose of process knowledge and automation to really work.
- BT150 CxO zeitgeist: AI agents promising, but in transition period
- OpenAI's support puts MCP in pole position as agentic AI standard
- Enterprises will spend on agentic AI, but perhaps not yet
- Google Gemini vs. OpenAI, DeepSeek vs. Qwen: What we're learning from model wars
- The data wars are just starting and agentic AI may be a trigger
Add it up and it sounds like the agentic AI spending curve is going to be more of a second half of 2025 phenomenon. Also see Constellation Research’s report on AI trends for 2025 and beyond.
Will consumption models from SaaS vendors be welcome? Enterprises are starting to see their traditional SaaS contracts (seats and subscriptions) adding a consumption layer to account for agents? ServiceNow CEO Bill McDermott calls this hybrid monetization model a Goldilocks scenario. It's quite possible that consumption models will be a headache for IT budget forecasting.
- BT150 zeitgeist: CxOs weigh in on SaaS consumption models for genAI, agentic AI
- AI agents bring consumption models to SaaS: Goldilocks or headache?
Why can't vendors come up with something better than AI studio when it comes to product names? As vendors tout AI agent orchestration platforms the one common thread is the dreaded "AI Studio." Now it makes sense that these vendors need AI studios to design, manage and orchestrate AI agents, but a new name would be lovely.
Will quantum computing enterprise use cases go mainstream in 2025? The quantum computing announcements just keep coming with vendors claiming various breakthroughs and supremacy over classical computing.
So far, 2025 appears to be the year of quantum computing.
Is the AI infrastructure boom now a bubble? This question doesn't necessarily affect enterprises given that the AI infrastructure boom rides with a few companies you can count on two hands--Nvidia, OpenAI, Meta, Google Cloud, AWS and Microsoft Azure with funding from the likes of Blackrock and Softbank.
- AI infrastructure spending is upending enterprise financial modeling
- CoreWeave's IPO: What you need to know
- AI infrastructure becomes one big leveraged bet
- GenAI's 2025 disconnect: The buildout, business value, user adoption and CxOs
- AI data center building boom: Four themes to know
- Is AI data center buildout a case of irrational exuberance?
- The generative AI buildout, overcapacity and what history tells us
But the leverage, big plans and commoditization of models and potentially GPUs may point to turbulence ahead.
Do we need to start sketching out humanoid robotic projects? It’s clearly early, but the intersection of humanoid robotics and AI is going to be interesting.
Will mergers and acquisitions pick up? Google Cloud’s $32 billion purchase of Wiz indicates that the company thinks it can gain regulatory approval. Other acquisitions are more in the tuck-in variety. Nevertheless, the dealmaking appears to be picking up. Given that HPE still can’t get its Juniper acquisition across the finish line, I’d say the jury is still out on M&A activity.
