Investment in transformative technologies continues to grow among companies, with data analytics and artificial intelligence leading across all sectors. 66% of companies say they are already investing in generative artificial intelligence (34%), and 32% plan to invest over the next year. This all points to radical shifts in how company executives are considering, acquiring and deploying new capabilities, according to the latest survey EY Reimagining Industry Future 2026.
The study also found that investment levels in 5G have increased year-on-year, while sovereign cloud solutions are a new technology now entering companies' investment plans. This appetite for transformative technologies is being shaped by a new wave of external forces, with data governance policies and legislation ranking ahead of competitors' actions as factors influencing investment decisions. Over three-quarters of respondents (77%) are reassessing their supplier relationships due to changes in the geopolitical environment, and long-term investment plans are under similar scrutiny.
Industrial policies boost business investment
89% of respondents cited technology policies, including new imperatives on digital sovereignty, among the key drivers for investment in new technologies, while 81% mentioned trade wars and tariff disputes.
Rob Atkinson, EY UK&I Technology, Media & Entertainment and Telecommunications Market Leader, EY UK&I Technology, Media & Entertainment and Telecommunications said, „Several considerations are influencing companies” technology investment plans and decisions, including new data governance policies and laws, such as changing cybersecurity requirements and new approaches to national digital sovereignty. In essence, providers can no longer rely on traditional offerings: they need to rapidly adapt their service portfolios and partner ecosystems to keep pace with rapidly evolving customer requirements.".
Transition to sovereign cloud solutions
The report also showed that business demand for sovereign cloud services is growing, fueled by geopolitical turmoil and a greater emphasis by policymakers on data protection and technological autonomy. Companies are responding to these changes, with 17% of respondents saying they are currently investing in sovereign cloud solutions and more than half (53%) are planning such investments, with the main drivers of adoption being cybersecurity and data control (61%), customer trust (40%) and compliance with national policies and regulations (39%).
Adrian Baschnonga, senior analyst at EY Global Technology, Media & Entertainment and Telecommunications (TMT), said, „The move to sovereign cloud systems is forcing companies to re-examine their relationships with suppliers. Service providers need to carefully evaluate their go-to-market strategies for sovereign cloud services, ensuring they are responding to changing customer business objectives while exploring new ways to differentiate their offerings.”.
Security and AI capabilities at the forefront of supplier re-evaluation process
As the vendor ecosystem expands and companies face a new wave of external pressures influencing technology investment decisions, there are also changes in the competencies companies are looking for in vendors. Security now ranks first as a top vendor attribute, reflecting the growing importance of customer data protection and regulatory compliance. Artificial intelligence integrated into providers' service delivery takes second place, highlighting the growing demand for seamless and informed interactions with technology providers. The financial services, automotive and manufacturing sectors rate this capability as the most important factor in selecting suppliers.
Respondent companies tend to view IT and cloud service providers as superior to telecom operators in terms of their ability to support good business outcomes. As telecom operators seek to close this gap, one reason for optimism for them is that many business customers perceive them as more than just connectivity providers. A third of respondents (33%) see them primarily as infrastructure gatekeepers, especially in the health sector (39%) and government organizations (33%).
Rob Atkinson added: „The outlook is favorable for telecoms operators to strengthen their role as security specialists, given the increasing emphasis by corporate customers on the security skills of providers and the emergence of new related security services such as sovereign cloud systems and fraud management APIs.”.
Telecom operators are well positioned to respond to evolving business technology requirements
When choosing their IT and communications (ICT) suppliers, companies look for partners who truly understand their strategic needs. 43% of respondents cited the need for a better understanding of their business and technology priorities as the main improvement they want. However, more than half of respondents (59%) said that suppliers do not illustrate how they have used technologies internally to support their own transformation, and the same proportion (59%) said that suppliers do not provide enough case studies of the value they offer to other companies.
Companies also call for improved customer service and support interactions. 53% of respondents want superior after-sales experiences, 51% want better access to service provider associate partners, and 43% are calling for more effective interactions with provider sales representatives. These improvements are seen as critical to the business relationship, with 431TPTP3T of respondents saying they plan to strengthen their supplier portfolio over the next 12 months, up from 351TPTP3T last year.
Adrian Baschnonga added: „There is a real demand from companies for suppliers to act as strategic partners, not just technology providers. At the same time, organizations want to reduce complexity and are demanding more efficient sales interactions and simpler product choices. Service providers that can act as consultative partners while offering better customer interactions will gain ground in a highly competitive market.”.
