On Monday, RBC Capital Markets provided insights into the IT industry's future, drawing from the 2025 CIO Survey, which canvassed the opinions of 169 IT professionals, including CIOs and IT managers from companies with revenues ranging from $250 million to over $25 billion. The survey's participants, representing enterprises and SMBs, expressed a generally positive outlook for IT spending in 2025, with a notable focus on software and GenAI initiatives.
The results showed an uptick in IT spending intentions, with 88% of respondents planning to increase their budgets in 2025, a 4% rise compared to the previous year's survey. This was coupled with a decline in those expecting to decrease IT spending to 3%, down from 4% in the prior survey. Software (ETR:SOWGn) emerged as a key investment area, with a significant jump to 96% of respondents anticipating increased spending, up from 71% in the 2024 survey.
The survey highlighted that AI and cybersecurity are the most favored categories for increased spending, followed by data warehousing, analytics, BI, database, and IT service management software. Conversely, less enthusiasm was observed for CDN/Edge and CCaaS investments. In terms of GenAI spending, 39% of respondents are already implementing GenAI projects, and another 43% expect to do so within six months. A notable 85% are allocating new budgets for these initiatives, reflecting a 10-point increase from the previous survey.
GenAI's primary application areas are in cost savings and revenue generation, with 63% of organizations focusing on both objectives. IT and customer service departments are leading the adoption, which bodes well for tools like GitHub Copilot and conversational AI platforms. Microsoft (NASDAQ:MSFT) 365 Copilot has also seen strong traction, with 49% of respondents already using the technology and more planning to do so within a year.
Despite the optimism, data privacy remains the top concern associated with GenAI, followed by issues like hallucinations, copyright infringement, cost, and bias. The survey's read-throughs suggest a positive impact on stocks such as CRWD, CRM, HUBS, GTLB, MSFT, NOW, PANW, SNOW, WDAY, and ZS, while being less favorable for BOX, DBX, FSLY, and ZM.
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