Dell reports a surge in demand for AI servers but faces a 39-week lead time due to supply chain constraints. The PowerEdge XE9680 server with Intel Xeon processor and Nvidia GPUs is in high demand. Dell is working to convert its multibillion-dollar sales pipeline into orders and is eagerly awaiting the arrival of alternative suppliers. Dell’s Q3 revenue is down 10% YoY, but net income is up 317%.
Inflation in Europe and the U.S. is slowing down, approaching central bank targets. The Personal Consumption Expenditures Price Index in the U.S. rose 3% in October, while core PCE increased 3.5%. In Europe, inflation dropped to 2.4% in the euro area. Economists expect inflation to continue cooling in 2024.
According to research by Atomico, Europe now has more highly skilled professionals in AI than the US, following a decade of rapid progress. The talent pipeline has contributed to the success of AI startups and the rebound of Europe’s tech ecosystem. However, there is a need for better access to institutional investments to match the ambitions of European founders.
According to Deloitte, UK organizations are generating less value from their technology investments than other countries. The report highlights data analytics, cloud data centers, and artificial intelligence as technologies that create the most value. However, UK companies are failing to capitalize on this, with an average eight percentage-point gap in value created compared to the global average. Challenges include a lack of transformation strategy, understanding of new technology, dependency on legacy systems, and problems securing funding. UK organizations also exhibit more short-term thinking in assessing the value gained from digital transformation.
Why do we care?
A taste of AI demand is right there in the Dell backlog. Now, for most businesses that are leveraging AI as a feature, this isn’t an issue. And remember, this is a crucial reason for the cloud.
The cooling of inflation rates in the U.S. and Europe is a positive sign, potentially leading to more stable economic conditions. This could influence tech spending and investment trends, making it a crucial factor for businesses in the IT service sector to monitor. It seems 2024 could be a terrific year… not that 2023 was terrible.
And let’s highlight that digital transformation data. My UK listeners have an opportunity for IT service providers to offer more targeted solutions and strategies to help UK businesses close this gap.