The Next Wave: BCG’s Top Ten Tech Trends Shaping the Future

By Giovanni Fassio, Stella Su, Sean Gaudette, Scott Stemberger, Derek Kennedy, and Amit Kumar

This is the first release of an annual series on the Next Wave of technology trends and is kept intentionally brief to provide high quality insights in 60 seconds or less. Please reach out to BCG to learn more.

In the rapidly evolving landscape of technology, understanding the key trends is imperative for strategic decision-making. This primer serves as an exploration of the top ten technology trends expected to shape the next 3–5 years. While some trends have been on the radar for a while, others have surged in significance more recently, guiding technology executives in their priorities.

1. Vertical Integration into Silicon:

Silicon chips, particularly GPUs, have become integral to hyperscalers’ strategies, necessitated by the demand for training Gen AI models in expansive data centers. Geopolitical barriers and the value potential in AI-enhanced semiconductor hardware have driven hyperscalers to vertically integrate chips through partnerships, acquisitions, and in-house innovation. The meteoric rise in Nvidia’s stock price is a clear signal of this trend.

2. HPC as a Service:

The paradigm of High-Performance Computing (HPC) is shifting towards a service-oriented model, particularly for AI implementations and big data analytics. This transition is driven by the anticipation of lower Total Cost of Ownership (TCO) and increased investments. Enterprise-grade quantum computing is set to impact HPC, capturing an estimated $5–10 billion in the next 3–5 years across infrastructure and applications.

3. Digital Infrastructure of the Future:

A projected 40% growth in 5G chipsets over the next three years is anticipated to significantly impact Industrial IoT, with applications such as remote mining witnessing a substantial boost. The rise of 5G chipsets enhances the viability of Edge applications, forecasting a 40% Compound Annual Growth Rate (CAGR) in the coming years, driven by reduced latency, improved scalability, and heightened security.

4. Shift to Cloud:

Amid increasing cost-consciousness, companies are prioritizing the reduction of technical debt, fueling investments in talent and tools such as Gen AI code assistants. Over the next 3–5 years, an estimated 95% of new digital workloads are expected to be deployed on cloud-native platforms.

5. IT/OT Integration:

Breaking down silos between Information Technology (IT) and Operational Technology (OT) is identified as a crucial hurdle in digital transformation, particularly in manufacturing. Recognizing this need, 62% of surveyed IT leaders advocate for a holistic journey towards IT/OT convergence, involving a shift from siloed architecture towards a highly integrated digital and data platform.

6. Next-Gen Data Architecture:

As data complexities, proliferation, and stack fragmentation intensify, 68% of surveyed companies plan to implement next-generation data architectures over the next three years. This involves adopting a more federated architecture paradigm, leveraging abstraction and service orientation to enhance flexibility for future developments while building upon existing infrastructure investments.

7. Cybersecurity:

In response to a more proactive, enterprise-wide approach to cybersecurity, Chief Information Security Officers (CISOs) face increasingly complex challenges. Simplification and a platform-oriented strategy, encompassing all data and identities, are pivotal. Frameworks such as zero-trust, cyber fusion, and fluid security are gaining traction in the cybersecurity domain.

8. Gen AI Governance & Applications:

Despite a strong desire among business leaders to scale Gen AI use cases, less than 10% of companies have successfully implemented such cases across their organizations. The primary obstacles include a lack of overarching governance, data management, and uncertain Total Cost of Ownership (TCO). Domain-specialized Gen AI models are gaining popularity, particularly in customer support, marketing, product development, and code optimization.

9. End-to-End Automation, including AIOps:

Within IT, leaders express a commitment to reducing costs on legacy IT Operations Management (ITOM), Customer Relationship Management (CRM), and other outdated solutions to fund new AI/ML initiatives within DevOps. Outside of IT, End-to-End (E2E) automation is becoming a reality through AI-enabled automation of robotic workflows, promising higher efficiency, productivity, accuracy, and agility.

10. Enterprise-Grade Open-Source Software:

Anticipating a 15–40% cost reduction, companies are increasingly implementing enterprise-grade open-source software over proprietary solutions. A staggering 90% of Fortune 500 companies express their intention to expand the usage of open-source solutions. Crafting a robust open-source software strategy, especially for commercialization, is more crucial than ever for organizations.