BCG's latest data shows tech leaders are aggressively funding AI (48% increasing spend) and cloud services (36% growing) while simultaneously slashing legacy infrastructure budgets.

This insight comes from Boston Consulting Group (BCG)'s just-released IT Spending Pulse—a major survey of 602 tech leaders conducted in December. The elephant in the room: this predated US tariffs, but the fundamental direction of travel remains clear and compelling.

What's fascinating is how AI, cloud, and security are growing hand-in-hand, creating a powerful flywheel effect.

To fully leverage AI capabilities, companies must consolidate their data and modernize infrastructure—driving cloud migration and creating demand for enhanced security.

This virtuous cycle explains why these three categories dominate spending increases while traditional categories face deep cuts.

“Cloud services and security infrastructure are indispensable for scaling, resilience, and safe and reliable operations. They’re prerequisites for unleashing transformative technologies like AI.” - BCG

Perhaps most interesting is the ongoing vendor consolidation trend:

Organizations are actively reducing vendor counts in nearly every area EXCEPT AI—where 50% are expanding their roster while just 20% are consolidating. For established technologies, companies are moving toward integrated solutions over patchworks of standalone tools.

Here's why cloud marketplaces are becoming mission-critical for software sellers: They perfectly align with this dual strategy.

As buyers consolidate vendors and optimize spend, marketplaces offer a streamlined procurement channel where they can leverage existing cloud commitments for third-party purchases—creating a win-win for both buyers and sellers in this new landscape.

For those questioning the AI investment surge, the ROI data is staring to look appealing: High-maturity AI companies are seeing 15% returns—nearly 70% higher than limited adopters. Even more telling, AI agents are delivering 13.7% ROI, outperforming traditional GenAI applications.

With AI adoption reaching 80% of surveyed companies and 58% already implementing AI agents, the message is clear: companies not prioritizing AI-cloud integration risk falling behind competitors who are reaping measurable rewards from their investments.

(Source: BCG IT Spending Pulse)