Artificial Intelligence
Growth vs. Profitability
Demand Landscape
The push to implement AI capabilities, especially generative AI (GenAI), is rooted in the widespread belief that it will be a game-changer—something with which we generally agree.
According to our survey, AI is seen as the top catalyst for the next generation of growth and future profitability gains. While only 22% of executives are raising growth targets this year due to AI-enabled products and features, 76% identify AI as a primary driver of their companies’ long-term growth.
However, each initiative demands considerable effort to secure investment. While tomorrow’s winners are likely being shaped today, these investments will take time to pay off and need to be coupled with structural changes to operating models.
AI requires a considerable investment. Despite limited near-term benefits, companies will continue funding initiatives or risk getting left behind.
Our survey this year found that over 70% of tech executives prioritize profitability levers over or equal to growth for 2024 and the next 12 months. This underscores that only 30% are in pure growth mode.
This profitability trend has remained steady year-over-year, which could reflect a new normal for the industry—one that favors sustainable growth over rapid expansion.
Growth at all costs looks to be gone for good. Instead, companies will emphasize sustained profitability to facilitate investment in future growth opportunities.
After a period of slow demand, largely due to declining IT budgets, 62% of respondents said they experienced a re-acceleration in demand levels during the past 12 months, whereas only 23% noticed a slowdown. However, some companies will benefit more than others as centralized purchasing decisions, vendor consolidation, and customers' AI-driven reprioritization of IT spend slow the sales cycle and pressure companies to invest in a new generation of products that require a completely different sales and operating model.
Shifting demand and market needs are forcing a rethink of product and go-to-market strategies.
Our survey this year found that over 70% of tech executives prioritize profitability levers over or equal to growth for 2024 and the next 12 months. This underscores that only 30% are in pure growth mode.
This profitability trend has remained steady year-over-year, which could reflect a new normal for the industry—one that favors sustainable growth over rapid expansion.
Growth at all costs looks to be gone for good. Instead, companies will emphasize sustained profitability to facilitate investment in future growth opportunities.
The push to implement AI capabilities, especially generative AI (GenAI), is rooted in the widespread belief that it will be a game-changer—something with which we generally agree.
According to our survey, AI is seen as the top catalyst for the next generation of growth and future profitability gains. While only 22% of executives are raising growth targets this year due to AI-enabled products and features, 76% identify AI as a primary driver of their companies’ long-term growth.
However, each initiative demands considerable effort to secure investment. While tomorrow’s winners are likely being shaped today, these investments will take time to pay off and need to be coupled with structural changes to operating models.
AI requires considerable investment. Despite limited near-term benefits, companies will continue funding initiatives or risk getting left behind.