The Future of Software Engineering: Top 6 Predicted IT Trends for 2024

Over the past 10 years, digital technology has become a major market force. Cloud computing, data analytics, and artificial intelligence (AI) are already having a major impact on consumer expectations, operating models, and profitability.

These technological advances (and many others) would not have been possible without continuous innovation in the IT sector. In this post, we set out to explore, based on data around new market topics, the latest IT trends in software engineering — including aspects of software development technology and strategy.

IT Trends in Software Engineering for 2024

2023 was a turbulent year for the tech sector. After a period of rapid growth, many companies had to adjust their targets as growth failed to fully translate into profitability.

However, despite operational challenges, accelerating inflation, and ongoing layoffs, many business leaders (94%) plan to increase their investment in IT and emerging technologies in 2024 to drive sustained innovation and growth.

Specifically, we believe the following software engineering trends will dominate the business agenda in 2024.

1. Platform Engineering Improves the SDLC

Enterprises hold substantial technology portfolios. More technology brings higher operating costs, interoperability issues, and a larger carbon footprint.

To optimize operating costs, leading teams are shifting to platform engineering. This is a software development paradigm built on a shared engineering platform, promoting common tools, reusable components, shared services, and shared knowledge across teams.

Source: Gartner

Effectively, platform engineering builds on DevOps best practices — continuous integration (CI), continuous delivery (CD), infrastructure as code (IaaS), and improved collaboration. Unlike DevOps, though, it focuses on improving the developer experience, not just the final product's quality.

Platform engineering promotes standardized toolchains and workflows that let developers self-serve. Using tools from an internal developer portal (IDP), engineers can create, improve, and modernize apps faster.

Platform engineering teams handle critical "housekeeping" tasks — from automated infrastructure provisioning and workflow automation to the proactive management of the IDP.

Source: Vanson Bourne "The business impact of the Cloud"

By providing a "golden path" that supplies all the tools needed for product development, testing, deployment, and management, an IDP makes self-service easier for developers. This removes the need for developers to master individual tools, reducing cognitive load and improving efficiency.

Nike, Nordstrom, and Starbucks attribute much of their software engineering productivity to platform engineering. Adopters overall report improved system reliability (60%), higher developer productivity (59%), and better workflow standards (57%).

Beyond improving team performance and software quality, platform engineering helps minimize waste — redundant manual work, excessive compute use — improving ESG performance.

2. Accelerating Adoption of Industry Cloud Platforms

Since the mid-2010s, cloud adoption has steadily advanced. In 2023, enterprises worldwide spent more than approximately $563 billion on public cloud services, including PaaS, IaaS, SaaS, and DaaS solutions.

Cloud-native operations have already proven to be more cost-effective, more environmentally friendly, and more innovation-driven, opening the door to new application development.

However, until recently, cloud technology offered a standard set of features regardless of industry, which each company had to configure to meet its own operational needs. In response, some vendors have evolved their offerings into industry cloud platforms.

Industry cloud platforms consist of cloud solutions tailored to specific industries, such as healthcare, retail, finance, or AdTech. They're designed to meet industry requirements for data storage, auditability, and security, offering a composable mix of SaaS, PaaS, and IaaS services for specific use cases.

Industry cloud capabilities range from optimized data architectures and new development tools (e.g., for data fabrics) to collections of pre-installed SaaS apps on managed cloud infrastructure. For instance, Salesforce Health Cloud comes pre-equipped with patient management software and healthcare analytics on a HIPAA-compliant platform, while Snowflake released Media Data Cloud with a data architecture tailored to AdTech businesses.

By 2027, 15% to 70% of enterprises are expected to use industry cloud platforms. When transitioning to cloud-native operations, 8allocate's cloud engineering team is happy to advise on selecting the optimal cloud platform and driving adoption.

3. The New AI Framework RAG Accelerates Gen AI Development

Currently, only 5% of market-leading companies have fully implemented Gen AI, yet a majority of companies (62%) cite investment in this area as a top organizational priority. This is according to Wavestone's 2024 Data & Analytics survey.

In particular, business leaders are seeking ways to improve their data analytics capabilities, and new frameworks such as retrieval-augmented generation (RAG) are helping to make this a reality.

Originally introduced by Patrick Lewis of Facebook AI Research, RAG is a collection of techniques and methods for retrieving facts from external sources.

Effectively, RAG lets large language models (LLMs) access additional data outside their training or parameter optimization, giving users more accurate responses. RAG models can scan specific company documents or reference indexed documents on the internet to provide up-to-date data and cite the sources of their output. RAG also helps produce better responses to ambiguous queries and minimizes model hallucinations.

Originally, RAG techniques focused primarily on optimizing the end-to-end pipeline of the retriever and generator. However, according to 2024 research, RAG is shifting toward a more modular approach in which the retriever and generator can be optimized independently. This allows for greater customization of knowledge sources, retrieval methods, and LLM selection.

Source: MarkTechPost

In 2023, many new open-source RAG frameworks emerged — ranging from native approaches like Parent Document Retriever to more complex modular patterns like RAG Fusion.

At the end of 2023, Microsoft released a commercial RAG solution for enterprises. In 2024, further offerings from major tech vendors are expected.

In practice, RAG dramatically improves the quality and relevance of LLM output, enabling organizations to build custom "Copilots" and "GPTs" trained on internal data with verified performance accuracy.

4. IT Outsourcing Set to Remain a Key Talent Acquisition Strategy

Business leaders continue to struggle with a shortage of tech talent. According to ManpowerGroup's Q1 2024 Employment Outlook, 75% of employers worldwide report talent constraints, with IT, data, and engineering roles cited as the most difficult to fill.

Source: ManpowerGroup Empoyment Outlook Q1 2024

According to Gartner, with an almost universal commitment to AI development, acquiring qualified professionals is becoming increasingly difficult — a trend especially pronounced in mature markets. Gartner expects demand for tech talent to significantly outpace supply by 2026.

Over the past several years, software development partnerships have become one of the key strategies for overcoming talent constraints in local markets (as we shared in our eBook).

To acquire the capabilities they need and drive software development projects forward, 76% of companies rely on third-party IT service providers. In 2024, this synergy is expected to increase further.

According to Deloitte, about 60% of shared service providers (so-called outsourcing partners) expanded the scope of their services and opened new local offices in 2023 to meet rising demand.

In particular, Central and Eastern Europe (CEE) is strengthening its position as a top region for hiring software developers. Poland, Ukraine, and Romania are home to more than 870,000 IT specialists, with more than 10,000 new graduates joining the industry each year.

Source: ManpowerGroup Empoyment Outlook Q1 2024

Strong technical expertise in areas such as cloud computing, big data analytics, ML, and AI — combined with cultural and geographic proximity to Western markets and an improving overall business environment — has made CEE one of the fastest-growing tech hubs in the world.

Microsoft, Amazon, IBM, Facebook, Snapchat, and Google have already established local delivery centers in the region. OpenAI has signaled its intent to open a regional office in Poland, and Netflix has nearly finalized a deal.

That said, demand for tech talent in CEE is still lower than supply, making software engineering services more cost-effective. If you're looking for ways to reduce time-to-market for new software products or acquire scarce technology skill sets, consider the opportunities CEE has to offer.

5. AI Further Boosts Software Development Productivity

2023 saw generative AI tools make a powerful entrance, with Microsoft releasing GitHub Copilot and Microsoft Security Copilot, Amazon releasing CodeWhisperer, and Replit releasing Ghostwriter (not to mention the coding use cases of ChatGPT).

Generative AI tools have proven their value across a wide range of software engineering tasks, from debugging code and brainstorming application design ideas to scanning for security vulnerabilities. Scientific tests show some AI tools can deliver professional-level performance on various coding tests.

Adoption of generative AI (Gen AI) is still relatively low among software engineering teams, but the potential of the technology is enormous.

According to GitHub, AI software development tools could add the equivalent of a further 15 million "effective developers" globally by 2030. In financial terms, this translates to an increase of $1.5 trillion in global GDP.

In addition to boosting software engineering team productivity, Gen AI tools also help developers improve their coding skills. Three out of four developers believe AI coding tools foster greater collaboration within their teams.

Gartner also predicts that within a few years, organizations will incorporate Gen AI into broader software engineering processes:

• By 2025, 30% of enterprises will implement AI-powered development and testing strategies.
• By 2026, 60% of website and mobile app designs will be automated by Gen AI.
• By 2027, 15% of new applications will be automatically generated by AI without human intervention.

By lowering the learning curve, Gen AI is drawing more people into tech careers, strongly empowering a new generation of citizen developers, and helping organizations close persistent skills gaps.

At the same time, new approaches will be needed to quality-check AI-generated code output. Likewise, AI tools can also become new attack vectors for malicious actors, requiring additional security measures for such systems.

6. Expecting Impact From New Technology, Not Just Innovation

Emerging technologies hold enormous transformative potential, but business leaders face growing pressure to see real return on investment (ROI). In fact, "lack of confidence due to lack of ROI" is cited as the biggest obstacle to digital transformation in enterprises.

In 2024, more leaders are expected to focus on understanding the impact of new technology trends on business models and profitability. Not every new technology investment transforms a business model — for example, simply upgrading existing capabilities may have little impact on the business (e.g., increasing data storage capacity).

CIOs must also recognize the gap between what business leaders expect and what IT can actually deliver. If an organization lacks mature data management, for example, building new AI solutions becomes an uphill battle. Likewise, different machine learning approaches each carry their own advantages, constraints, and required skill sets.

To avoid these scenarios, business leaders should focus on evaluating their software engineering capabilities and the impact these have on their operating model. Practices such as software development discovery phases, technology readiness assessments, and Capability Maturity Model Integration (CMMI) can help in this area.

7. Conclusion: Paving the Way to Success in 2024

Business leaders face growing demands for innovation, enterprise-wide transformation, departmental technology, and data analytics capabilities.

To address these (often conflicting) priorities, leaders are increasingly turning to software development partners in 2024, focusing on establishing better IT talent sourcing strategies and improving their ability to deliver on committed initiatives.

New engineering best practices, like platform engineering and broader use of AI development tools, can boost the speed and efficiency of software engineering teams. New tech solutions like industry cloud and RAG are also easing the adoption curve, helping businesses deliver greater impact faster.

If you're looking for ways to strengthen your software development capabilities in 2024, please get in touch with Miichisoft. We offer end-to-end software engineering services and ad-hoc technology consulting delivered by a dedicated team. Seize new market opportunities with an experienced software engineering team.