Study: Over 75% of Service Providers Believe Investment in Data Modernization Crucial to Realizing Generative AI's Full Potential

Rhea-AI Summary

Amdocs (NASDAQ:DOX) released findings from an IDC global study highlighting the critical role of data modernization in leveraging AI potential. The study reveals that only 19% of communications service providers have fully implemented integrated processes for effective AI data modernization.

Key findings show that 78% of respondents anticipate new investments in automated data cleaning for GenAI, while 65% have accelerated their shift to cloud-first data architecture. Additionally, 76% of service providers expect significant business transformation through AI-enabled 'service-as-a-software', and 73% foresee increased data modernization investments for agentic AI.

The study reveals that service providers currently can only access about 50% of their internal data for AI models and analytics, highlighting significant room for improvement in data accessibility and utilization.

Positive

• 78% of providers plan to invest in automated data cleaning for GenAI
• 65% are accelerating cloud-first data architecture adoption
• 76% expect major business transformation through AI-enabled services

Negative

• Only 19% of providers have fully implemented AI data modernization processes
• 50% of internal data remains inaccessible to AI models and analytics
• Increased investment requirements for data modernization and infrastructure

Insights

Market Research Analyst

The IDC study reveals a significant market opportunity in the telecommunications sector's AI transformation journey, with several key implications for Amdocs' market position and growth potential. The finding that only 19% of service providers have fully implemented integrated data processes, coupled with 78% recognizing the need for investment in data quality, signals a substantial untapped market for data modernization services.

The study highlights three critical market dynamics that strengthen Amdocs' strategic position: First, the accelerated shift to cloud-first architecture by 65% of respondents indicates a growing demand for integrated cloud and AI solutions, aligning perfectly with Amdocs' service portfolio. Second, the revelation that service providers can only access 50% of their internal data for AI models presents an immediate opportunity for data integration and modernization services. Third, with 76% of providers anticipating major business model transformations through AI-enabled services, this creates a long-term demand pipeline for advanced software and service solutions.

The market's current fragmented approach to data modernization, combined with the acknowledged need for enhanced data quality and accessibility, positions Amdocs advantageously as a comprehensive solution provider. The study effectively validates Amdocs' strategic focus on AI and data modernization while highlighting significant growth potential in helping service providers bridge their capability gaps.

The findings suggest an imminent surge in investment across the telecommunications sector, particularly in data cleaning, quality assurance, and cloud infrastructure. This trend could drive sustained demand for Amdocs' services over the next several years, especially given the complex nature of data modernization projects and the need for end-to-end solutions that can support both current and future AI implementations.

Only 19% of communications service providers worldwide have fully implemented an integrated set of processes, platforms and governance policies required to support effective data modernization for AI

JERSEY CITY, NJ / ACCESS Newswire / February 21, 2025 / Amdocs (NASDAQ:DOX), a leading provider of software and services to communications and media companies, today released the findings of a comprehensive global study conducted by International Data Corporation (IDC), sponsored by Amdocs. The IDC white paper*, "AI Demands More: Enterprises Are Playing Catch-Up on Mission-Critical Data Modernization," highlights the critical need for robust data modernization efforts to fully leverage the power of hybrid AI.

The survey, which explores the impact of generative AI (GenAI) and agentic AI on service providers' data modernization and cloud-based infrastructure roadmap, finds that enterprises are quickly realizing that deploying GenAI in isolation is unsustainable, and 78% of respondents state that GenAI will require net new investment in automated data cleaning and quality checks over the next two years.

"Effective AI solutions are built on trustworthy data, but our research shows that 50% of organizations still struggle to fully access the value of existing data resources and to ensure consistent data quality," said Mary Johnston Turner, IDC Research Vice President for Digital Infrastructure Strategies. "The emergence of powerful agentic AI technologies to orchestrate workflows and autonomous decision-making across multiple AI models will require most organizations to invest in data modernization to ensure the levels of end-to-end data health, security and accessibility needed to deliver reliable AI results."

Other key findings:

• 65% of respondents have accelerated their shift to a cloud-first data architecture due to GenAI: GenAI's rapid adoption is driving service providers to expand investments in cloud computing, storage, and GPU capacity to meet growing processing demands. As cloud modernization shifts toward AI-centric architectures, service providers must balance scalability, security, and cost control while strategically navigating data governance challenges and the high costs of AI infrastructure.

• 76% of service providers expect that "service-as-a-software" enabled by agentic AI will drive major or meaningful transformation across their organization's business model in the coming years.

• 73% of respondents expect agentic AI to require increased data modernization investments: Agentic AI is reshaping business operations by enabling automated decision-making, dynamic forecasting, and adaptive customer interactions across multiple departments, from sales and marketing to operations and cybersecurity. Unlike traditional AI models that function in silos, organizations are modernizing their data infrastructure to support agentic AI-driven interoperability, leveraging cloud-based platforms to ensure seamless collaboration across use cases.

• The typical service provider estimates that just 50% of internal data is currently accessible by the organization's AI models and analytics.

"Enterprises increasingly recognize the importance of combining multiple AI capabilities - ranging from NLP to ML, predictive AI to generative AI - in order to achieve scalable, accurate and valuable and dynamic business outcomes," said Anthony Goonetilleke, Group President of Technology and Head of Strategy at Amdocs. "However, reaching the full promise of GenAI means addressing data standardization, modernization and governance while embracing scalable cloud infrastructure. Companies that prioritize developing a solid data foundation today will be best positioned to drive GenAI's long-term business impact."

*Survey and interviews of 151 CSP leaders across North America, EMEA, and Asia conducted by IDC. The study, including further findings, will be published next month.

Supporting Resources

• Learn more about Amdocs Studios

• Keep up with Amdocs news by visiting the company's website

• Follow us on X, Facebook, LinkedIn and YouTube

About Amdocs

Amdocs helps those who build the future to make it amazing. With our market-leading portfolio of software products and services, we unlock our customers' innovative potential, empowering them to provide next-generation communication and media experiences for both the individual end user and enterprise customers. Our employees around the globe are here to accelerate service providers' migration to the cloud, enable them to differentiate in the 5G era, and digitalize and automate their operations. Listed on the NASDAQ Global Select Market, Amdocs had revenue of $5.00 billion in fiscal 2024. For more information, visit www.amdocs.com

Amdocs' Forward-Looking Statement

This press release includes information that constitutes forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including statements about Amdocs' growth and business results in future quarters and years. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be obtained or that any deviations will not be material. Such statements involve risks and uncertainties that may cause future results to differ from those anticipated. These risks include, but are not limited to, the effects of general macro-economic conditions, prevailing level of macroeconomic, business and operational uncertainty, including as a result of geopolitical events or other regional events or pandemics, as well as the current inflationary environment, and the effects of these conditions on the company's customers' businesses and levels of business activity, including the effect of the current economic uncertainty and industry pressure on the spending decisions of the company's customers, Amdocs' ability to grow in the business markets that it serves, Amdocs' ability to successfully integrate acquired businesses, adverse effects of market competition, rapid technological shifts that may render the Company's products and services obsolete, security incidents, including breaches and cyberattacks to our systems and networks and those of our partners or customers, potential loss of a major customer, our ability to develop long-term relationships with our customers, our ability to successfully and effectively implement artificial intelligence and Generative AI in the company's offerings and operations and risks associated with operating businesses in the international market. Amdocs may elect to update these forward-looking statements at some point in the future; however, Amdocs specifically disclaims any obligation to do so. These and other risks are discussed at greater length in Amdocs' filings with the Securities and Exchange Commission, including in our Annual Report on Form 20-F for the fiscal year ended September 30, 2024 filed on December 17, 2024 and our Form 6-K furnished for the first quarter of fiscal 2025 on February 18, 2025.

Media Contacts

Mario Hajiloizi
Amdocs Public Relations
E-mail: mario.hajiloizi@amdocs.com

Katie Owen
Babel PR for Amdocs
Tel: +44 (0) 7490 131475
Email: amdocs@babelpr.com / katie.owen@babelpr.com

SOURCE: Amdocs Management Limited

View the original press release on ACCESS Newswire

FAQ

What percentage of service providers have fully implemented AI data modernization according to Amdocs (DOX)?

According to the study, only 19% of communications service providers worldwide have fully implemented an integrated set of processes, platforms and governance policies for AI data modernization.

How many service providers plan to invest in data cleaning for GenAI by 2027?

78% of respondents indicate they will require new investment in automated data cleaning and quality checks over the next two years.

What percentage of internal data can service providers currently access for AI models?

The study reveals that service providers can only access approximately 50% of their internal data for AI models and analytics.

How has GenAI affected cloud-first data architecture adoption according to the Amdocs study?

65% of respondents have accelerated their shift to a cloud-first data architecture due to GenAI adoption.

What percentage of service providers expect AI-enabled 'service-as-a-software' to transform their business model?

76% of service providers expect that 'service-as-a-software' enabled by agentic AI will drive major or meaningful transformation across their organization's business model.