This yr’s CES conference has showcased one other vary of thrilling improvements: AI on each chipset, smarter endpoint gadgets and more and more savvy robots. The headlines are loud, the demos are modern, and the longer term appears simply across the nook. However for enterprise CIOs, {hardware} technique would not proceed at show-floor pace.
CES displays what’s attainable in technical gadgetry; the job of the CIO is to find out what’s sensible. {Hardware} funding choices are being made in an setting formed by financial uncertainty, uneven AI adoption and mounting stress to show worth from each greenback spent. Whereas staff could thrill to get their palms on the most recent laptops and equipment, that is hardly ever the wisest use of IT budgets.
Niel Nickolaisen, chairman of the CIO Council at FC Centripetal and director of strategic engagements at JourneyTeam, captured this rigidity neatly: “The previous one to 2 years have been the years of CIO ‘hedging.'”
That hesitancy just isn’t essentially indecision; for a lot of, it is technique.
Modernization is pushed by agility, not obsolescence
For years, {hardware} refresh cycles had been predictable: new servers, new storage and new desktops each few years. However in 2026, modernization is much less about routine updates and extra about enterprise agility. Growing older {hardware} is not simply previous however a danger to efficiency, simply changing into a drag on pace and suppleness.
Nickolaisen observes this firsthand: “We have a tendency to carry onto our {hardware} for a very long time,” he mentioned, noting that infrastructure resembling storage arrays can stay in service nicely past vendor reference lifecycles, even as much as 15 years. Extra vital than age, he emphasised, is efficiency in context: “Due to the age of the infrastructure, it’s seemingly the most important barrier to enterprise agility. When we have to transfer quick, the older the legacy system is, the extra seemingly it can get in our manner.”
Trade information helps this judgment. In accordance with Gartner, worldwide IT spending is forecast to extend by 9.8% in 2026; nevertheless, a lot of this enlargement displays rising part prices and recurring cloud expenditures reasonably than broad {hardware} overhauls. CIOs are beneath stress to modernize selectively, prioritizing the place infrastructure really limits adaptability and holds again workflows, reasonably than chasing each CES novelty.
Strategic restraint is commonly intentional
If modernization is prioritized for particular bottlenecks, that means de-prioritization elsewhere. In observe, this implies CIOs could delay upgrades in components of the enterprise which can be secure, predictable, or not central to innovation. Nickolaisen framed this as a deliberate alternative: “To me, the choice is: The place are my greatest agility ache factors?”
For a lot of enterprises, that calculus means extending the lifetime of methods that also meet baseline wants, whereas shifting funding towards compute and storage that straight allow digital transformation or AI workloads. This isn’t ignorance of innovation, however a recognition that {hardware} funding have to be tightly tied to enterprise impression.
IDC’s {hardware} market reporting illustrates this: AI-optimized servers — particularly GPU-accelerated methods — noticed explosive income development final yr, reaching a report $112.4 billion in income within the third quarter of 2025. Nonetheless, the majority of conventional enterprise servers grew at a extra modest tempo, typically buoyed by cloud adoption reasonably than on-premises refresh cycles. CIOs are successfully shopping for capability the place it issues and deferring the place it would not.
This method displays a theme that has emerged in different areas of enterprise expertise: focus not on each rising functionality, however on people who unlock measurable worth.
“I’ve to stability my {hardware} modernization roadmap and priorities in opposition to the entire different calls for for expertise: new initiatives, fixing my information points, new functions and instruments, AI,” Nickolaisen mentioned. “It might be that I solely have the funds and assets to tackle a small set of infrastructure modernization work.”
AI is redrawing the {hardware} precedence map
Many CIOs have been capable of keep away from an excessive amount of {hardware} funding over the previous few years, however AI stands aside as a power that reintroduces urgency to {hardware} technique. Purposes starting from generative brokers to high-throughput analytics place calls for on legacy infrastructure that it was by no means designed to satisfy. And whereas cloud supplies a versatile on-ramp for a lot of groups, the sheer scale of AI compute means CIOs should consider when and the place devoted {hardware} yields efficiency or price benefit versus public cloud.
“For instance, I can reside with the present state of my community, however to assist newer functions I must modernize my compute and storage,” Nickolaisen mentioned. For him, the uncertainty surrounding AI is a part of a broader market problem that makes each {hardware} determination really feel riskier.
He outlined a number of issues CIOs are weighing concurrently: “What if somebody introduces some whizbang expertise that accelerates the obsolescence of my present infrastructure? What if somebody acquires a component of my infrastructure and overhauls the licensing mannequin and pricing, and makes it much less inexpensive? What if all the group is ‘hedging’ and won’t make investments till there’s extra market readability?”
These questions are particularly acute in relation to AI, the place workloads could shift amongst on-premises infrastructure, specialised {hardware} and cloud platforms quicker than conventional planning cycles anticipate.
CES as inspiration, not obligation
CES gestures towards a future the place {hardware} and intelligence are inseparable. For CIOs, the problem is to not replicate each flooring innovation in-house, however to align enterprise actuality with strategic alternative. The simplest {hardware} methods will probably be people who harmonize between the place enterprise agility actually wants assist — in information facilities, in AI workloads and in methods that underpin buyer worth — and the place legacy methods may be sustained with out impeding progress.
“Personally, I’ve determined that I can not management the market or expertise uncertainty, and so I’ve to be actually good at decision-making and researching the choices,” Nickolaisen mentioned. “However in some unspecified time in the future I must decide, select a path and transfer ahead — in any other case, I danger falling behind.”
