E-Business
Non-Techie Businesses IT Budget to Exceed IT Organization- Report
A new update to the Worldwide Semiannual IT Spending Guide: Line of Business from the International Data Corporation (IDC) forecasts worldwide corporate IT spending funded by non-IT business units will reach $609 billion in 2017, an increase of 5.9% over 2016.
The Spending Guide, which quantifies the purchasing power of line of business (LoB) technology buyers by providing a detailed examination of where the funding for a variety of IT purchases originates, also forecasts LoB spending to achieve a compound annual growth rate (CAGR) of 5.9% over the 2015-2020 forecast period.
In comparison, technology spending by IT buyers is forecast to have a five-year CAGR of 2.3%. By 2020, IDC expects LoB technology spending to be nearly equal to that of the IT organization.
“Companies’ adaptation of Innovation Accelerators, such as Internet of Things, Cognitive/AI systems, and 3D Printing, together with the four Pillar technologies of the 3rd Platform, to both new product and service developments and day-to-day business operations has fundamentally increased Line of Business spending on IT,” said Naoko Iwamoto, senior market analyst with the IDC Japan IT Spending Group.
“The Innovation Accelerators have put the line of business units in the frontline of the digital transformation and have forced them to work either alone with the ecosystem outside of the IT organization as ‘shadow IT’ or in closer collaboration with the IT department than ever before.”
IDC’s Line of Business taxonomy identifies two major types of technology spending – purchases funded by the IT organization and purchases funded by technology buyers outside of IT. Joint purchases can be funded by either IT or the functional business unit while “shadow IT” projects are funded from the functional area budget without the knowledge, involvement, or support of the IT department.
Although some technology categories are dominated by IT spending, most involve outlays from both IT and the business units. For example, worldwide IT spending on servers, storage, and network equipment is forecast to total $114.1 billion this year, while LoB spending on these items will total $52.9 billion.
However, IT is not the primary source of funding for all hardware purchases. Business unit spending on PCs, monitors, mobile phones, printers, and tablets will total $83.8 billion worldwide this year compared to $76.2 billion spent by the IT department. And line of business buyers will spend more on software applications in 2017 ($150.7 billion) than IT buyers ($64.7 billion).
The technology categories that will see the most spending from LoB buyers in 2017 will be applications ($150.7 billion), project-oriented services ($120.3 billion), and outsourcing ($70.3 billion).
The categories that will receive the most spending from IT buyers this year will be outsourcing ($149.2 billion), project-oriented services ($82.2 billion), and support and training ($79.8 billion).
Combined IT-LoB purchases of outsourcing and project-oriented services ($422 billion) will represent nearly one third of all technology spending worldwide in 2017. The technology categories that will see the fastest growth in spending over the 2015-2020 forecast period are tablets (16.2% CAGR for IT and LoB purchases combined) and midrange enterprise servers (14.7% combined CAGR).
LoB buyers will also continue to invest aggressively in applications and application development and deployment (8.5% and 9.3% CAGRs, respectively).
In 2017, IDC expects LoB technology spending to be larger than IT organization spending in five industries: discrete manufacturing, healthcare, media, personal and consumer services, and securities and investment services.
By 2020, this number is forecast to grow to nine as the insurance, process manufacturing, professional services, and retail industries see LoB purchases move ahead of IT purchases. The industries with the fastest growth in LoB spending are professional services (6.9% CAGR), healthcare (6.6%), and banking (6.5%).
However, LoB technology spending is forecast to grow faster than that of the IT organization in all 16 industries covered in the spending guide.
On a geographic basis, the IT organization will be the largest source of technology spending throughout the forecast in all but four countries: the United States, Canada, Saudi Arabia, and the United Arab Emirates.
And like the industry trend, LoB spending is forecast to grow at a faster rate than IT-led technology spending in nearly every country.
The countries that will experience the fastest LoB spending growth include Indonesia and the Philippines (each with a 12.2% CAGR), Argentina (11.1% CAGR), Peru (8.7% CAGR), and India (8.4% CAGR).
“Explosive cloud and other 3rd Platform technology adoption is enabling U.S. lines of businesses to rely less on enterprise IT than any other country to fund their technology purchases,” said Eileen Smith, program director, Customer Insights and Analysis.
“On average, U.S. line of business will fund 62% of their technology purchases in 2017. Looking to increase productivity and reduce organizational costs, IDC expects supply chain, human resources, and sales executives will fund the largest share of their companies’ technology purchases over the forecast period.”
“While the LoB-funded IT spending shows steady growth of 3.1% CAGR in the forecast period in Japan, almost 70% of technology spending comes from IT with a 1.3% CAGR,” said Iwamoto.
“As the competition escalates in the worldwide marketplace as well as with the disruptors from different industry segments, Japanese companies are trying to hold their position by employing a globally standardized IT and business processes initiated at the headquarters. The reinforcement of the IT governance among Japanese large enterprises will keep the higher ratio of IT funded.”
The IDC Worldwide Semiannual IT Spending Guide: Line of Business quantifies the purchasing power of the non-IT department technology buyer by detailing enterprise IT spending for 20 technologies and 12 corporate functional areas across 16 enterprise industries in eight regions and 53 countries.
This IDC Spending Guide provides a granular view of the market for IT spending from a geographic, industry, functional (LoB), and technology perspective. Unlike any other research in the industry, the LoB Spending Guide was designed to help business and IT decision makers to better understand the scope and direction of corporate technology spending over the next five years.
E-Business
NDPC @ 2025 Data Privacy Day, Calls for Collaboration on Awareness
Nigeria Data Protection Commission (NDPC) has called for increased collaboration to raise awareness and foster data privacy and protection across Nigeria.
The call was made by Dr. Vincent Olatunji, national commissioner, NDPC, during an event marking the 2025 World Data Privacy Day in Lagos.
World Data Privacy Day, observed globally on January 28 every year, serves to highlight the importance of data privacy.
The theme for this year’s observance was “Respecting Privacy, Safeguarding Data, and Enabling Trust.”
Olatunji, who joined the event virtually, stressed that collective action was required to prioritise data privacy in order to attract foreign direct investment into Nigeria.
In his speech, Olatunji outlined the importance of protecting personal data, emphasising that everyone must understand how to safeguard their personal information.
“We need to know how to protect our personal information and data and make sure that we do not share personal information anyhow,” he said.
He also urged data controllers and processors to ensure the protection of data under their care.
Olatunji further discussed the necessity of developing a robust digital economy in the country, which depends on a comprehensive approach to data management, policies, and strategies.
“We all need to work together to make it happen,” he added.
Highlighting the Commission’s progress, Olatunji noted that over 10,000 people had been trained, to create 500,000 jobs in the Nigerian economy through data protection initiatives.
Mr. Tokunbo Smith, president, Data Knowledge Information Privacy Protection Initiative (DKIPPI), also spoke at the event, urging Nigerians to make full use of the Nigeria Data Protection Law, which was passed in June 2023.
Smith praised President Bola Tinubu for signing the law into effect, calling it a “day of freedom for Nigerians.”
He highlighted the law’s provision that empowers individuals to take legal action against anyone who misuses their personal data.
Smith also commended the NDPC for its efforts in training data protection officers and providing certification exams, encouraging Nigerians to leverage these opportunities to protect their data and explore career paths in data protection.
Mr. Fiyinfolu Okedara, guest speaker, further emphasised the need for continuous awareness of data privacy.
He explained that data protection should be an ongoing process, not just a one-time event.
Okedara urged both organisations and individuals to prioritise data privacy education year-round, rather than only on World Data Privacy Day.
During the panel discussion, Mr. Gbenga Sesan, executive director, Paradigm Initiative, stressed that respecting data privacy is a shared responsibility.
He urged people to safeguard their personal data by not writing it down carelessly and to foster trust by ensuring data protection is prioritised.
Mr. Olumide Babalola, another panelist, raised awareness about the future implications of data privacy, predicting a time when children might sue their parents for creating digital footprints for them.
He stressed that consent should always be obtained before adding someone to a WhatsApp group, as failing to do so would constitute a breach of privacy.
The event aimed to foster greater awareness of data privacy and promote best practices among individuals and organisations, ensuring that data protection remains a priority in Nigeria’s evolving digital landscape.
E-Business
Nvidia Loses over $500Bn in Market Value amid DeepSeek’s Rise
Nvidia, world leader in accelerated computing, lost about $589 billion of its market value on Monday amid rise in DeepSeek.
DeepSeek, a private Chinese company founded in July 2023 by Liang Wenfeng, is an open-source large language model that relies on what is known as “inference-time computing,” meaning “they activate only the most relevant portions of their model for each query, and that saves money and computation power”
Nvidia, on the other hand provides a variety of products and services, including GPUs, AI software, and cloud gaming.
According to Bloomberg, the loss was driven by the company’s shares plummeting by 17 percent during midday trading on Wall Street.
The steep decline reverberated across global markets due to Nvidia’s substantial influence on major indices.
In the United States, the S&P 500 fell by 2.3 percent, while the Nasdaq 100 dropped 3.6 percent.
European markets were similarly affected, with Frankfurt and Paris stock exchanges closing in the red, while London finished flat and Asian stock markets recorded losses.
Technology giants like Microsoft and Alphabet, the parent company of Google, also saw their shares decline, however, Meta managed to buck the trend, trading in the green.
Nvidia has been a major beneficiary of the influx in spending on artificial intelligence (AI) because of the company’s semiconductors, which are essential for AI technologies to work efficiently.
However, the publication said the recent emergence of DeepSeek, a Chinese chatbot platform, appears to have shaken up the AI industry.
DeepSeek recently overtook ChatGPT as the top-rated free app on Apple’s US app store.
In 2022, the US imposed restrictions to limit exports of advanced GPU chips to China.
However, DeepSeek’s researchers claimed they trained their latest model on Nvidia’s H800 chips.
The training was approximately $6 million, which is a fraction of the usual expense for developing high-end AI systems.
DeepSeek’s breakthrough in the AI industry comes as the US intensifies its efforts to maintain dominance in the field with the unveiling of the Stargate Project.
The Project, which was announced by President Donald Trump, is a strategic collaboration between Oracle, Japan’s SoftBank, and OpenAI, the creators of ChatGPT.
OpenAI stated that the initiative would strengthen US AI capabilities, create thousands of jobs, and enhance national security.
E-Business
Mobile App Usage to Drop By 25 Percent on AI Assistants- Study
By 2027 mobile app usage will decrease by 25 per cent due to AI assistants, according to Gartner, Inc. Smartphone users will turn to AI assistants, such as Apple Intelligence, ChatGPT, Google Gemini, Meta AI, and others to replace apps for many functions.
In addition to the impact of AI assistants, apps will be consolidated across separate brands and companies, creating mobile app partnerships or consortiums to reach more users per app at scale and defray the cost of creation and maintenance.
“CMOs should begin scenario planning for the impacts of decreased mobile app usage,” said Emily Weiss, senior principal for the Gartner Marketing Practice.
“Brands with low app engagement and retention will likely be first impacted – this will be a positive development for brands that are not overly reliant on driving revenue via apps as app development costs will decrease.
Other brands may be severely impacted by the disintermediation of users turning to AI assistants for services.
The loss of app users will also result in the loss of first-party data collection and the ability to reach fewer users via mobile push notifications,” she added.
By 2026, over 1/3 of web content will be created for the purposes of Gen-AI powered search.
According to Gartner’s 2024 CMO Spend Survey of 395 respondents between February and March 2024, the average CMO allocated almost a quarter of their digital marketing budget to search.
Other than end users directly visiting a website, search currently drives more traffic to the average commercial enterprise website than any other referral source.
Given this, a loss of search driven traffic due to algorithmic shifts by major search engines would result in tangible, negative commercial impact to any organisation.
“CMOs will need to direct their teams to hire talent with a strong understanding of how GenAI, and broader AI influences, impacts the performance of their content in search algorithms,” said Weiss.
“It will be important to upskill the function by investing in search and content talent with AI skillsets. These associates will need to have familiarity with creating or optimising content to train and rank within evolving search algorithms,” Weiss added.
By 2028 digital marketers will move 30 per cent of their paid social budget to support advertising and partnerships on subscription-based channels.
It is becoming more challenging for CMOs to maintain, let alone grow, their reach and engagement among consumers.
This is especially true as consumers shift their tech and media behaviors away from social media, to other platforms and subscription based channels.
Gartner’s 2024 CMO Spend survey found that since 2022, paid social has maintained the highest budget allocation for all digital media spend.
In 2024, B2C Marketing leaders reported allocating 14.3 per cent for their digital channel budget to social media advertising (an increase from 12.3% in 2023).
“Closed group communities and subscription channels offer a potential alternative for social media weary consumers and content creators who want to do more than feed the algorithm,” said Weiss.
“Brands can leverage closed-group subscription channels – such as Substack, Patreon, and Discord – and the professional creators on them to reach relevant target audiences who are already engaging with content they self-selected into consuming.”
By 2027, 85 per cent of customer data will be xollected from automated interactions or those led by AI agents. Current AI models, such as large language models (LLMs), lack the agency to autonomously execute tasks and adapt in complex environments.
However, as new levels of intelligence are added, new AI agents are poised to quickly become more capable and reliable as brands seek to address customer facing use cases.
“There will be more AI agents than people, so while current approaches require humans in the loop, this idea will quickly become antiquated.
“Marketers will need to determine when and how they can trust AI agents to act on behalf of the brand and customers across key areas,” said Weiss.
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