How are enterprise tech buyers deploying budgets right now in this turbulent economy? Has the promise of AI finally started to live up to the hype? Our latest State of Enterprise Tech Spending report provides some insights.
As in previous quarters, we surveyed 100 CXOs who collectively represent over $35 billion in annual technology spending. Our goal was, as always, to gauge the budget planning and overall sentiment of large, enterprise technology buyers.
Note: We conducted the survey in late March 2025, prior to the Trump administration’s tariff announcement on April 2. While the subsequent market volatility may impact buyer sentiment score—particularly in sectors with greater exposure to tariffs—most enterprise IT budgets aren’t subject to major revisions due to macroeconomic factors. In some categories, IT spending may be actually accelerated by such forces—for instance, investments in AI or cloud for modernization and reducing risk to future development. The technology sector’s tariff risk is also not yet known.
To catch up on previous reports, check out what we published in March 2023, September 2023, April 2024 and September 2024.
A few highlights from the survey:
- Cloud migration is accelerating as enterprises modernize infrastructure, creating fresh opportunities for AI-driven innovation and agile operations. While 54% of enterprises still run a majority of their compute on-premises, momentum is shifting fast. With 73% accelerating or continuing their move to public cloud, the opportunity for cloud technology providers is expanding rapidly.
- VMware’s recent pricing hike appears to be driving a once-in-a-generation push from on-prem to cloud infrastructure.
- In another major move, enterprises are refreshing core systems like ITSM, ERP, and CRM systems now to gain next-gen functionality like AI and automation. In good news for software vendors, they’re largely looking to new software players to meet those needs.
- Generative AI and LLMs have overtaken cloud infrastructure as the #1 priority for CXOs.
- Production AI use cases more than tripled since our last survey, jumping from 5.5% to 16%. Similarly, the agentic AI wave is building: 46% of enterprises are either actively deploying or in R&D for agentic AI.
- Other trends the survey revealed include a nascent trend towards decoupling SIEM and shifting to more modular security architectures.
We see a lot of fresh opportunities for early-stage technology startups in these survey findings. Check out the full report here to learn more:
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Open in new tab The information contained herein is based solely on the opinions of Scott Goering and Evan Witte, and nothing should be construed as investment advice. This material is provided for informational purposes, and it is not, and may not be relied on in any manner as, legal, tax or investment advice or as an offer to sell or a solicitation of an offer to buy an interest in any fund or investment vehicle managed by Battery Ventures or any other Battery entity. The views expressed here are solely those of the authors.
The information above may contain projections or other forward-looking statements regarding future events or expectations. Predictions, opinions and other information discussed in this publication are subject to change continually and without notice of any kind and may no longer be true after the date indicated. Battery Ventures assumes no duty to and does not undertake to update forward-looking statements.
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