By Emily Nakashima, VP of Engineering, Honeycomb

2024 was a monumental year for the transformation of software development. AI came onto the enterprise scene in a big way, impacting team structures, code development, leadership strategies, and organizations as a whole. One thing we know for sure headed into the new year is that this rapid evolution isn't slowing down, and how businesses navigate and adapt to emerging technology will define their success down the line. Reflecting on the past year, here are my predictions for how AI and an ever-changing technological landscape will impact teams in 2025. 

Cost cutting will lead to team reconfiguration and vendor consolidation

Companies are scrambling to address the new interest rate climate and the heightened focus on efficiency, resulting in pressure to decrease manager-to-engineer ratios, with many companies making cuts to both line management and middle management. The focus on cost-cutting also incentivizes vendor consolidation and revisiting past build-vs.-buy decisions. This means 2025 is likely to bring flatter organizations that have tilted their focus toward product development and away from internal tooling and platform investment. We'll also see harried and stressed-out managers juggling these priorities: figuring out complex cloud cost savings plans and evaluating new vendors while also welcoming new direct reports still reeling from the most recent round of company layoffs.

There will be a necessary shift in focus from AI code authorship to AI code ownership

While the current AI hype shows no signs of slowing, so much of the focus in 2024 was on AI code authorship rather than code ownership. Businesses ultimately spend much more time owning, maintaining, and operating software than authoring it. The current generation of AI tools has shown the technology is inconsistent in the maintenance and ownership problem space. As such, 2025 will bring heightened awareness of the downsides of owning AI-generated code and running LLMs in production - what was fast to create in development is suddenly slow, expensive, and unpredictable in production. I'll be looking out for advances in best practices for LLM observability and expect we'll see headline-making security incidents due to LLM-generated code.

We'll see an uptick in the creation of AI centers of excellence

In 2025, organizations will increasingly build out internal AI centers of excellence, strategically designed to both support the upskilling of existing teams in AI developer tools and drive AI-powered product innovation. The current shortage of AI and ML talent means that companies will be asking engineers with this expertise to do double duty in both educating the organization and driving innovation.

Compliance will start to meaningful impact software roadmaps

2025 is a year where regulatory compliance will meaningfully impact many software team roadmaps. There's an incredible burgeoning landscape of global and state-level privacy laws, as well as the European Accessibility Act (EAA) coming into effect. Connecting the dots on all of these complex and competing requirements will be a large undertaking for engineering teams.

To make sure I have a holistic view of what the coming year might bring, I also spoke with two of my fellow leaders at Honeycomb to hear their perspectives and, you guessed it, AI had a lot to do with how they foresee 2025 shaping up.

Our Field CTO, Liz Fong-Jones, has her eye on IT spending and cloud costs in 2025, remaining wary of the continuous build-up of technical debt brought on by AI adoption. Here's what she had to say:

"Gartner recently projected a major uptick in IT spending expected in 2025. Cloud cost continues to be top of mind for many organizations. On the basis of hype and the herd effect, generative AI is going to be a large portion of that increase in IT spending, but I'd caution that leaders should carefully measure how much technical debt they are introducing while they use AI to write code or add generative AI features to their products. It will be important for organizations to run disaster game days to ensure they still can debug and understand the code that's been added to their product."

And as AI drives up spending for teams, it will also impact how their leadership must function and what they'll be expected to navigate throughout its continued adoption in 2025. Because of this, Honeycomb's co-founder and CEO, Christine Yen, believes 2025 will be a defining year for technical leadership:

"2024 ushered in the rapid, more widespread adoption of artificial intelligence. While it kicked off a move toward greater productivity and business success, it also created confusion for many enterprises that struggle to understand their systems as is, without AI. 2025 will see a continued rise in the value of technical leadership and founders who understand the struggle of integrating emerging technologies into their stack first-hand and can properly guide businesses forward with an increased attention to the software systems that power the world's largest companies. Businesses that place value on their software development and engineering teams during this AI transformation will rise above those that don't."

In summation, 2024 made it very clear that AI is here to stay, and its impact will be felt in a number of intertwined business functions from IT operations to executive leadership. That's why 2025 is a critical year for organizations to carefully define how they'll move forward in this new era. Embracing innovation, cultivating resilient teams, and remaining strategic about new technological investments will be key to success in the coming year.

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ABOUT THE AUTHOR

Emily Nakashima is VP of Engineering at Honeycomb, a leading observability platform. A former manager and engineering leader at multiple developer tools companies including Bugsnag and GitHub, Emily is passionate about building best-in-class, consumer-quality tools for engineers. She has a background in product engineering, performance optimization, client-side monitoring, and design.