PagerDuty Study Finds 16% Increase in Enterprise Incidents Amid Race to AI Adoption

Rhea-AI Summary

PagerDuty, Inc. (NYSE:PD) released its 2024 State of Digital Operations study, showing an increase in IT Operations spending with a focus on security, cloud infrastructure, and automation. The study revealed a 13% year-over-year increase in customer-facing incidents, with a majority of leaders planning to expand investment in cloud services and security. Despite a disconnect between business and technical leaders on innovation adoption, both are aligned on pushing forward to operationalize investments in AI in 2024.

Market Research Analyst

With the projected increase in IT Operations spending, the focus on security, cloud infrastructure and automation indicates a strategic pivot towards enhancing digital resilience and efficiency. Enterprises are responding to a complex macroeconomic environment by investing in areas that promise both growth and stability. The 13% year-over-year increase in customer-facing incidents suggests a growing market for digital operations management solutions, as businesses seek to mitigate the risks associated with their transformation efforts.

Cloud services and storage investments reflect a continued shift away from traditional on-premises solutions, signifying potential growth opportunities for cloud providers and associated industries. The emphasis on security with 73% expecting to increase budgets underscores the burgeoning cybersecurity market, likely to attract more investors and innovators to this space.

Additionally, the discrepancy between business and technical leaders' perspectives on automation effectiveness could indicate a need for better communication and alignment within organizations, potentially influencing management consulting services and internal change management strategies.

Financial Analyst

The financial implications of the increased spending in IT Operations are multifaceted. For companies like PagerDuty, this trend could translate into higher demand for their services, potentially improving revenue streams and stock performance. The prioritization of AI and machine learning, with 71% of leaders planning to expand budgets, suggests a bullish outlook for AI-driven businesses and technology sectors. However, the increased spending may also put pressure on profit margins if not managed effectively.

Investors should monitor companies that offer cloud and security solutions, as their stocks might benefit from these industry tailwinds. Yet, it's crucial to assess whether these companies have the infrastructure and expertise to handle the increased demand and complexity of services required.

Long-term, firms that successfully integrate AI and automation could see improved operational efficiency and market competitiveness, but short-term costs and potential implementation challenges could affect financial performance and investor sentiment.

Cybersecurity Expert

The commitment to expanding security budgets reflects an acute awareness of the critical nature of cybersecurity in maintaining business continuity and protecting customer data. The rise in customer-facing incidents necessitates advanced threat detection and response capabilities. The demand for cybersecurity measures is likely to increase the value of companies in the security sector and could lead to innovation in threat intelligence and incident response services.

It is essential for businesses to not only invest in security infrastructure but also in skilled personnel and training to address the sophisticated and evolving threat landscape. Companies that offer comprehensive cybersecurity solutions, including employee training and security operations center (SOC) services, are likely to see an uptick in business.

Moreover, the integration of AI into cybersecurity could enhance the ability to predict and prevent security incidents, but it also introduces new vulnerabilities and requires robust ethical considerations regarding data privacy and usage.

Spending on IT Operations projected to rise in 2024 with focus on security, cloud infrastructure and automation

SAN FRANCISCO--(BUSINESS WIRE)-- PagerDuty, Inc. (NYSE:PD), a global leader in digital operations management, today released its 2024 State of Digital Operations study, examining the concerns and priorities of enterprise and upper mid-market decision makers for the year ahead. Drawing insights from a survey of 350 business and technical leaders across numerous industries, the study revealed critical initiatives, budgets strategies and risks businesses face driving operational transformation at scale.

With mandates to achieve top line growth while improving efficiency in an uncertain macroeconomic landscape, the majority of leaders expect to expand IT Operations budgets with a focus on mitigating risk, increasing revenue and improving resilience. Cloud and security infrastructure remain top priorities given their foundational role in businesses’ digital health.

Digital Operations Survey Results

• 13% year-over-year increase in customer-facing incidents, reflecting rising levels of complexity and risk as businesses drive operational transformation at scale.
  • Enterprise companies saw sharper increases (16%) on a higher base of incidents versus mid-market companies (8%).
• 77% of leaders plan to expand investment in cloud services and 76% intend to increase spend on cloud storage.
• 45% of respondents ranked security and reducing risk among their top three business imperatives, with 29% naming this the number one priority and 73% expecting to increase security budgets.
• More than half of respondents say their 2024 IT Operations budgets will be higher than they were last year, while just 16% expect budgets to decrease.

Despite a significant disconnect between business and technical leaders’ outlook on adoption of innovation––81% of technical decision makers report teams are using automation more effectively than they were 12 months ago versus 47% of business decision makers––they remain aligned on pushing forward to operationalize investments in artificial intelligence in 2024.

Across participants, 71% are growing budgets for AI and machine learning and 76% are pursuing automation of IT or business operations workflows. This accelerated rate of AI adoption has potential to both increase efficiency and add strain to already stretched IT infrastructure, underscoring the importance of foundational safeguards to manage unplanned incidents.

Leaders also indicated plans to operationalize investments in artificial intelligence in 2024, with 71% looking to grow budgets for AI and machine learning and 76% pursuing automation of IT or business operations workflows. The accelerated rate of generative AI adoption has potential to add strain to already stretched IT infrastructure, underscoring the importance of safeguards to manage unplanned incidents.

“The priorities are clear for leaders across industries: risk, revenue and resilience,” said Katherine Calvert, chief marketing officer at PagerDuty. “With the continued mandate to drive growth and efficiency, we believe 2024 will be the year of operational transformation using AI and automation. PagerDuty is the trusted partner for enterprise organizations to grow revenue, reduce cost to achieve operational efficiency and mitigate the risk of poor digital customer experiences.”

To learn more about the study and state of digital operations, read the full report here.

About PagerDuty Inc.

PagerDuty, Inc. (NYSE:PD) is a global leader in digital operations management. The PagerDuty Operations Cloud revolutionizes how critical work gets done, and powers the agility that drives digital transformation. Customers rely on the PagerDuty Operations Cloud to compress costs, accelerate productivity, win revenue, sustain seamless digital experiences, and earn customer trust. More than half of the Fortune 500 and more than two thirds of the Fortune 100 trust PagerDuty including Cisco, Cox Automotive, DoorDash, Electronic Arts, Genentech, Shopify, Zoom and more. To learn more and try PagerDuty for free, visit www.pagerduty.com. Follow our blog and connect with us on LinkedIn, X, YouTube and Facebook. We’re also hiring, visit https://www.careers.pagerduty.com/ to learn more.

The PagerDuty Operations Cloud

The PagerDuty Operations Cloud is the platform for mission-critical, time-critical operations work in the modern enterprise. Through the power of AI and automation, it detects and diagnoses disruptive events, mobilizes the right team members to respond, and streamlines infrastructure and workflows across your digital operations. The Operations Cloud is essential infrastructure for revolutionizing digital operations to compete and win as a modern digital business.

SOURCE PagerDuty

View source version on businesswire.com: https://www.businesswire.com/news/home/20240207764183/en/

Amberly Asay Janke

media@pagerduty.com

Source: PagerDuty

FAQ

What is the focus of PagerDuty's 2024 State of Digital Operations study?

The focus is on the rise in IT Operations spending with an emphasis on security, cloud infrastructure, and automation.

What was the year-over-year increase in customer-facing incidents?

The study revealed a 13% year-over-year increase in customer-facing incidents.

What percentage of leaders plan to expand investment in cloud services?

77% of leaders plan to expand investment in cloud services.

What are the business imperatives ranked by the respondents?

45% of respondents ranked security and reducing risk among their top three business imperatives.

What percentage of leaders are looking to grow budgets for AI and machine learning?

71% of leaders are looking to grow budgets for AI and machine learning.