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- 🏗️ AI IaaS spend set to more than double by 2026
🏗️ AI IaaS spend set to more than double by 2026
AI IaaS Spend to Double, SAP Private Cloud Renewals Rise, Platform-as-Product Insights from Alex Podobnik
Aimply Team & Zack Tembi
October 20, 2025
AI IaaS Spend to Double, SAP Private Cloud Renewals Rise, Platform-as-Product Insights from Alex Podobnik
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Welcome to this week’s edition of CIOsurge!
This week:
Gartner projects AI-optimized IaaS to jump to $37.5B by 2026, with inference driving the majority—plan commits, reserved GPU, and clear unit economics now.
SAP private cloud renewals risk 10%+ hikes without caps; lock in CPI ceilings, renewal guards, and MFN clauses before term end.
From my chat with Alex Podobnik: treat your platform like a product—own it, measure it, and ship secure, cost-aware paved paths that cut toil.
Let’s make this week a game-changer.
Stay sharp. Stay ahead.
đź’ˇ Guest Expert Insights: Alex Podobnik
🛣️ Your Platform Is a Product
Alex has the scars for this one. He spent years at HashiCorp as an SRE helping design HashiCorp Cloud, then took those lessons into consulting across startups and big enterprises. His takeaway is simple: stop running ops as a queue and start running an internal platform with a roadmap, a budget, and an owner.
A good platform gives developers paved roads. Think pull requests that create best-practice resources, modules with security and tagging baked in, policy-as-code for guardrails, and SLOs to keep production honest. Developers self-serve; the platform team curates the golden paths and removes friction.
Treat it like a product and measure it like one. Track time to first deploy, change lead time, error budgets, and showback by team. Fund iteration on the platform the same way you fund features. The result is fewer handoffs, faster delivery, and stronger security as a default.
🏗️ AI IaaS spend set to more than double by 2026
Per Gartner, AI-optimized IaaS spend will reach $18.3B in 2025 and $37.5B in 2026, with 55% driven by inference. Demand for GPUs/AI ASICs, high-speed networking and optimized storage is reshaping cloud roadmaps as vendors scale capacity (e.g., $40B Aligned DC deal; Oracle–Nvidia/AMD for OCI and 'Stargate').
Inference will dominate spend; budget for steady capacity, not just bursty training. Lock in economics now—commits, reserved GPU capacity, or colo—while setting guardrails for egress, API, and storage growth from agentic workloads.
Run AI like a portfolio: some GPU IaaS, some private clusters, some CPU. Standardize MLOps and observability to compare unit costs (per 1k tokens, per inference, per job) and shift workloads as prices and partnerships move.
- Zack Tembi
🧾 SAP private cloud renewals risk 10%+ hikes without caps
Gartner warns SAP Cloud ERP Private renewals are seeing 10% or higher increases when contracts lack renewal price caps. On-prem discounts are shrinking and annual support hikes persist, while SAP disputes the figures and points to CPI-capped adjustments. Gartner also predicts many ECC6 customers will remain past 2030, fueling “mixed signals” as licensing shifts (FUE) add complexity.
Lock in protections now: insist on flat subscription fees for the initial term, renewal caps, price holds for added users/modules, and auditability of FUE metrics. Add CPI ceilings, MFN clauses, and carve-outs if SAP changes bundles or measurement. Model dual tracks (stay ECC vs. move to S/4HANA Private) with five-year TCO and exit ramps.
Tighten sourcing leverage: run competitive benchmarks, pressure-test partner capacity after tier cuts, and sequence migrations to align with real ROI, not vendor timelines. If SAP won’t meet guardrails, consider delaying scope, repatriating workloads, or introducing selective alternatives to keep pricing honest.
- Zack Tembi
🗞️ At A Glance
đź’ˇ CIO Spotlights
Froedtert ThedaCare Health appoints Brian Sterns as CIO
Brian Sterns has been named SVP and CIO of Froedtert ThedaCare Health, where he’ll drive digital transformation and technology strategy.
Sterns previously served as chief digital health officer for the North Region and interim IT leader for the South Region.
CEO Imran Andrabi praised Sterns’ blend of business and IT expertise, noting his patient-first, innovation-focused leadership style.
PXGEO appoints Chet Bhat as first CIO to lead global digital strategy
PXGEO named Chet Bhat its first CIO, tasking him with advancing the company’s worldwide digital and IT infrastructure.
Based in Houston, Bhat will retain his CIO role at EnerMech, bringing over 30 years of experience across GE Oil & Gas, Maverick Natural Resources, and Roper Technologies.
Bhat aims to drive operational efficiency and innovation through integrated systems and cloud modernization.