Industry executives and experts share their predictions for 2025. Read them in this 17th annual VMblog.com series exclusive.
By Rob Brown, president and COO of DataStrike
As we move into 2025, the tech industry is entering a period of economic uncertainty that will force companies to reevaluate their staffing models, investment strategies, and operational priorities. With the global economic environment still adjusting to high inflation, businesses face increased pressure to find a balance between cost-cutting and innovation. This evolving landscape will reshape how organizations view their IT functions and how they allocate resources to fuel both growth and profitability. Below are four key predictions on how enterprises will approach staffing and economic planning in 2025.
Interest Rate Impacts Investment
Throughout 2024, elevated borrowing rates forced businesses to tighten their belts, slowing down corporate spending, especially on capital-intensive technology projects. With companies continuing to minimize debt burdens and maximize return on investment, major tech purchases, especially those related to infrastructure and AI-driven innovation, may be put on hold until financial conditions improve.
However, should interest rates continue to decline later in the year, a resurgence in tech investment is expected. Lower interest rates would create an environment ripe for renewed spending, particularly in areas like cloud infrastructure and automation, where companies can achieve greater operational efficiency. Organizations that delayed investments in the first half of the year may see this as an opportunity to catch up, investing in tech projects that will pay off in terms of long-term cost savings and operational scalability.
A Shift in IT Roles
Over the past few years, IT departments have increasingly been seen as cost centers. This trend is expected to continue into 2025, with businesses looking for ways to trim operational expenses while still maintaining essential IT functions. As companies aim to streamline their operations, the demand for more efficient technologies, such as AI, automation, and cloud-based solutions, will continue to rise.
The role of IT will become more focused on reducing overhead costs and delivering faster, more efficient services. Automation and AI will be critical tools in this effort as they allow companies to reduce manual, routine tasks, optimize resource allocation, and minimize the need for large in-house teams. Similarly, cloud-based infrastructure will help businesses scale operations as needed without incurring the hefty costs associated with traditional on-premises IT infrastructure. In this shifting environment, IT departments will need to become more agile, finding ways to do more with less while continuing to provide 24×7 support.
Fractional IT Support Becomes the Norm
One of the most significant shifts we’ll see in 2025 is the rise of fractional IT support, especially among small and medium-sized businesses (SMBs). Rather than maintaining large in-house IT teams, SMBs will increasingly turn to external tech partners for ongoing infrastructure services and support.
For SMBs, the fractional model offers a cost-effective solution that allows access to top-tier expertise without the need for hiring and employing full-time resources. Fractional support offers organizations the flexibility to juggle the day-to-day infrastructure needs and helps them tackle innovation and growth initiatives, such as moving to the cloud, upgrading their infrastructure, or integrating data capabilities. Outsourcing specific tech functions will allow companies to focus on what they do best: building out their core products and services.
Larger enterprises, particularly those that have experienced tech layoffs, are also expected to turn to fractional support services to keep pace with innovation. Rather than hiring full-time staff for every IT function, companies will rely on external partners to fill gaps and ensure momentum in strategic projects without increasing overhead.
From Capex to OpEx Prioritization
Another key trend for 2025 is the shift from capital expenditures (CapEx) to operational expenses (OpEx). As companies seek to become more financially flexible, they will increasingly prioritize consumption-based services, such as cloud infrastructure and software-as-a-service (SaaS) models. This shift reflects a growing desire among businesses to reduce the long-term financial burden of heavy investments in hardware and instead focus on operational spending that can scale up or down based on business needs.
For many companies, especially SMBs, profitability will be a higher priority than large-scale tech innovation. Businesses will increasingly seek tech solutions that directly support their bottom line, whether by streamlining operations, enhancing customer service, or improving supply chain efficiency. Tech investments will need to prove their worth by demonstrating a clear return on investment, particularly in the short term. This pragmatic approach will ensure that businesses can remain competitive while keeping costs manageable.
As we head into 2025, businesses will find themselves navigating a rapidly changing and unpredictable economic environment. Hybrid staffing models, fractional IT support, and a shift in financial strategies towards consumption-based services will define the year ahead. For SMBs, in particular, the focus will be on practical, cost-efficient solutions that help them remain profitable and competitive without exhausting their resources. Companies that can effectively leverage external partnerships, adapt to alternative staffing models, and shift toward more scalable financial strategies will be the ones that thrive.
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ABOUT THE AUTHOR
Rob Brown is president and COO of DataStrike, the industry leader in 100% onshore data infrastructure services.
