Benefits of cloud ERP for digital native, high-tech companies
Dinosaur meets digital native: In the cloud, ERP has evolved into an agile powerhouse to meet the needs of high-growth, high-tech businesses.
The post-pandemic years haven’t been especially kind to the high-tech industry. Economic uncertainty and global upheaval slowed demand and tech spending, leading companies to cut back on staffing and scramble for stable footing, and the 2025 high-tech trends reflect the challenges the industry has faced.
But there are signs that things are picking up for high tech, which encompasses a broad range of businesses, from software startups to large hardware manufacturers:
- Gartner forecasts that global IT spending will grow to $5.26 trillion in 2024, up from $4.9 trillion in 2023.
- A global Forrester survey found that 91% of technology decision-makers plan to increase IT spending in 2025.
- IDC forecasts that worldwide spending on digital transformation will grow from $1.9 trillion in 2022 to $4 trillion in 2027, driven mainly by investments in AI and generative AI.
- Reshoring: Chip makers are trying to avoid supply chain shortages by bringing manufacturing operations closer to home.
- Digitalization and IT modernization: Scaling processes and agility is key for many mid-size manufacturers and tech companies.
- AI adoption: AI can process massive amounts of data in real-time, giving employees more time to fix problems instead of finding them.
- New business models: Companies are looking for new models to boost revenue, including developing chips in-house.
- Emergence of autonomous design and manufacturing: Semiconductor companies will use AI for an autonomous chip design process to reduce chip size, mitigate risk, and shorten design times.
The future of business is calling.
RISE to the occasion.
1. Focus on reviving domestic chip manufacturing
The global shift to digital systems and rapid growth of artificial intelligence are fueling unprecedented demand for semiconductors, leading manufacturers to shift away from outsourcing to ramp up production, making reshoring a top 2025 high-tech trend.According to the Semiconductor Industry Association (SIA), global sales of semiconductors hit an all-time high for the month of August, totaling $53.1 billion, up 20.6% from August 2023. In 2025, the global semiconductor market is expected to reach $687 billion, up 12.5% from this year.
Reshoring is gaining traction as chip makers try to avoid supply chain shortages by bringing manufacturing operations closer to home. Government policies and incentives also are driving the reshoring trend.
The United States, Japan and the European Union have initiated government funded “chip acts” to re-establish their presence in the
semiconductor industry. With the CHIPS and Science Act of 2022, the U.S. is investing $52.7 billion to bring semiconductor manufacturing back to the US.
A SIA report found that U.S. fab capacity is expected to increase 203% by 2032, a tripling of U.S. capacity.
For US reshoring to be succeed, manufacturers will need to focus on maximum efficiency and exploit every profit opportunity. That will require tapping into insights gleaned from their vast amounts of data.
2. High tech 2025: The year of digitization and modernization
While high tech drives innovation across industries, many tech companies – especially small and midsize ones – struggle with outdated systems and processes that can stymie growth. In 2025, they’ll focus on modernizing, standardizing, and maximizing the effectiveness of their infrastructure.
An Oxford Economics study found that legacy IT infrastructure impedes high-tech industry growth. Sixty-three percent of midsize hardware manufacturers said their biggest IT pain point is the ability to scale processes and systems to match organic business growth.
Forty-five percent said outdated infrastructure prevents them from standing up new businesses, entering new geographies, or deploy new models.
But many are already working to bolster their competitive edge by integrating advanced technologies, starting with a cloud-based foundation. And they’re seeing results: 45% of manufacturers gained better agility and 40% optimized processes.
Cloud-based ERP systems offer growing high-tech businesses a cost-effective way to automate and standardize back-office processes for improved agility. These modern systems support a wide range of product-service offerings to help drive revenue and growth.
3. AI adoption accelerates in tech
High-tech companies have prioritized AI like no other industry by building AI solutions and embedding AI into their products as well as their own operations. In 2025, expect this high-tech trend to continue with an increased focus on adopting AI internally to improve efficiency and productivity.
Seventy-two percent of tech industry leaders planned to increase spending in data and AI in 2024, according to an Accenture survey.
The Oxford Economics study found that more than a third of high-tech manufacturers have adopted AI while half are planning implementation.
Nearly two-thirds of the executives surveyed expect AI to bolster supply chain resilience. Almost half said they expect AI will help them optimize complex product configuration.
Using AI to process mass amounts of data in real-time slashes manual processes, giving teams more time to fix problems instead of finding them. With AI-enabled supply-chain management, early adopters been able to improve logistics costs by 15%, inventory levels by 35%, and service levels by 65% compared to their competitors.
Advanced Micro Devices, a global leader in the semiconductor industry, collaborated with Deloitte and SAP to develop the a generative AI-enabled tool to tackle supply chain shortages. The company estimates that the tool will reduce the time and cost spent on root cause analysis by 90%.
4. 2025 high-tech trend: New business models
A top high-tech trend in 2025 will be finding new ways to drive business. Companies will expand beyond their comfort zones to explore and set up new revenue-generating business models.
One aspect of this trend, which has been growing for a few years now: software companies designing and making their own chips. Big tech companies Meta, Google, and Apple are all developing chips in-house to support them in the AI race.
Branching out into the chip business reduces their reliance on external suppliers, but also gives them more technical control and competitive advantage.
At the same time, expect to see more chip manufacturers add subscription-based models for software and development services. For example, Qualcomm launched a cloud service last year that its chip customers can use to track goods through the supply chain.
The benefits of the Everything-as-a-Service (XaaS) model for semiconductor companies include recurring revenue, faster innovation, and potentially capturing a greater share of wallet by providing services such as maintenance and data analytics services, according to an Accenture report.
The global XaaS market is expected to grow to $3,221.96 billion by 2030, up from $699.79 billion in 2023.
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5. Trending up: Autonomous design
Of the many applications of AI in the high-tech industry, one of the most intriguing is using it to speed design and development.
In 2025, look for semiconductor companies to begin using AI for an autonomous chip design process that aims to reduce chip size, mitigate risk, and shorten design times.
“Generative AI offers immense potential to revolutionize the analog and digital chip design process, starting by tackling executive repetitive tasks efficiently and offering predictive capabilities to designers on future designs,” Ravi Gupta, a senior director at Capgemini wrote in a blog post. “But this journey will be an experience with a lot of learning.”
Generative AI tools that act as coding and testing partners for programmers have the potential to transform software development, according to a Deloitte report. One developer survey found that 44% use AI tools, the report said.
The software and information services industry was on track to spend the most of any industry on AI in 2024, IDC research found. It invested $33 billion into using AI to make improvements, including better software development.
High tech in 2025: Rising to the challenge
As the tech industry looks ahead to growth opportunities, many challenges remain. Geopolitical conflict continues to pose supply chain risks, major elections could impact trade policies and tariffs, and macroeconomic conditions are far from stable.
The rapid pace of technological change means high-tech companies must get on a path of continuous reinvention centered on a strong digital core, Sam Panda, a managing director at Accenture, wrote in a 2024 industry outlook that holds true for 2025.
“High tech is the industry that has transformed our world, and with the opportunities presented by Gen AI, it can continue to be the industry that shapes the future of business.”
