Accenture CEO Julie Sweet said enterprises aren't increasing IT budgets for generative AI, but are looking to save money on technology and reallocate spending toward genAI and data projects.
Speaking on Accenture's fourth quarter earnings call, Sweet said IT budgets for 2025 are likely to be more of the same as enterprises are forming spending plans. She said:
"What we are seeing is the continued trend of trying to save money on IT to free up the spending on areas of GenAI. We haven't seen a change in overall spending. We'll see what the budgets come in January and February, but we're not expecting a big change. But what we also are seeing is that as they're saving money, they want to invest it in things like GenAI and data."
Sweet said the IT spending environment remains cautious and discretionary spending isn't likely to move higher.
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Accenture ended the fourth quarter with $3 billion in genAI bookings for the fiscal year and expects another healthy increase in 2025. "We know there's clear demand. We're starting to see more of our clients move from proof-of-concept to larger implementations," said Sweet. "We're also continuing to see data pull-through."
In a nutshell, Sweet said that genAI and AI will be a lot like digital efforts in enterprises. At some point, AI will touch every unit, use case and operation in an enterprise. Sweet said Accenture generative AI deals were averaging around $1 million, but have moved to larger deals of $10 million or more.
She said:
"Like digital, AI is both the technology and a new way of working, and the full value will only come from strategies built on both productivity and growth. And it will be used in every part of the enterprise. We believe the introduction of GenAI signifies a transformative era that is set to drive growth for us and our clients over the next decade much like digital technology has in the last decade and continues to do so."
Accenture is also adopting genAI for productivity gains and to hone its services.
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Q4, fiscal 2024 results
Accenture reported better-than-expected fourth quarter earnings of $2.66 a share on revenue of $16.4 billion, up 3% from a year ago. Non-GAAP earnings were $2.79 a share.
Generative AI new bookings for the fourth quarter were $1 billion.
For fiscal 2024, Accenture reported earnings of $11.44 a share on revenue of $64.9 billion, up 1% from a year ago.
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As for the outlook, Accenture projected fiscal 2025 revenue growth of 3% to 6% in local currency and earnings of $12.55 a share to $12.91 a share.
Accenture has 774,000 employees.
