Canalys outlook: predictions for the technology industry by 2027

Every year at our Canalys channels forums, one of the biggest highlights comes when our global team of analyst steps up to the stage and predicts changes in the years ahead.

They're not just looking in their crystal ball one year ahead, but further out to 2027. The predictions span a broad swathe of the tech trends, from IT spending, to vendor dynamics, to channel issues, to macro-level issues like sustainability, AI and global manufacturing.

Below is a summary of the full report with my LinkedIn network. The full predictions report is available for download here: Canalys outlook: predictions for the technology industry

1. IT spending will hit US$6.3 trillion in 2027; by the end of 2034 it will double that of 2024 to exceed US$10 trillion

Investment in AI-powered software, cybersecurity and AI-capable PCs will drive robust growth, while the continued buildout of data centers to run AI by the hyperscaler cloud service providers will sustain growth in servers, storage and networking.

2. By 2027 Intel will cease to exist in its current form

Canalys expects Intel will separate its foundry business, which had seen some important wins, especially with AWS, but it is yet to prove a real challenger to TSMC and Samsung. Foundry’s number one ally is the US government.

3. By 2027, four of these eight vendors will be the leading enterprise cybersecurity platforms: Cisco, CrowdStrike, Google, Fortinet, Microsoft, Palo Alto Networks, SentinelOne and Trend Micro

Consolidation has been predicted in cybersecurity for the last 20 years, but it has not yet materialized and, realistically, it will never happen. The most successful platform vendors will be those that make partners a core component of their strategy.

4. By 2027, over 95% of distributors will struggle to secure funding in the AI era

Distributors need to be able to build marketplace platforms. Canalys estimates that this requires over US$1 billion in investment - necessary, but expensive.

5. By 2027, EU regulators will cap total data center electricity consumption at 5% (of grid) as society becomes more power hungry

Generative AI is increasing the demands on the energy grid. In future, GenAI will account for 45% of data center electricity consumption, as well as the overall demand for power increasing.

6. By 2027, partners will outsource between five and seven of their current services to fellow partners (or vendors)

Sustained IT skills shortages (especially in cybersecurity, AI and sustainability) will result in partners leveraging the talent of their counterparts to expand their offerings. Vertical specialists will be in high demand by other partners that want to expand into other industries.

7. By 2027, nearly a third of PC system-level production will move away from China to Southeast Asia

Major PC vendors are actively working to diversify their manufacturing bases. By the end of 2027, Canalys forecasts over 50% of PC assembly – especially for the US-based PC vendors, and nearly one-third of system-level production – at the mother-board level, will be based outside China, with southeast Asia emerging as the new hub for these operations.

8. By 2027, ARM-based PCs are set to capture 25% of the laptop market

Despite efforts by Intel and AMD to strengthen the x86 platform through the newly formed advisory group, both companies will face increased competition from ARM-based processors. By 2027, one in four notebooks is forecast to feature ARM-based processors, driven by the presence of Qualcomm's X Series and Apple's M-series chips, with adoption further accelerated by the launch of NVIDIA's Grace CPUs.

9. By 2027, at least half of all marketplace procurement will be done via partners on behalf of their end customers

Partners will become an increasingly important access point for marketplace transactions as hyperscalers look towards channel offers to enable greater draw down of the cloud commits.

10. M&A in the MSP channel will grow 45% in 2025, getting back to almost 90% of pre-pandemic levels.

Managed services revenue growth will hit 13% in 2025 as outsourcing trends continue and end-customers look for more comprehensive risk management and cost optimization. But Canalys is also seeing more roll-up MSPs backed by private equity firms acquiring specialists.