AI-driven demand permanently enlarges cybersecurity surface

The AI cycle and data centre binge will at some point peak, but the install base of IT assets has gone up and will stay up, Montanana said. The shift is comparable to the commercialisation of the internet 25 years ago, but with better financial performance and working capital management. The AI effect is most visible in the US, where gross invoiced income at Logicalis International jumped 34%.

At Westcon, the networking and cybersecurity distributor, order intake hit a record. Large telecoms operators, many of them building data centre infrastructure, delivered the most growth, Montanana said. The surge in demand is also squeezing margins, with Westcon’s gross margin falling to 22.8% from about 25%.

Component shortages are back, mainly for high-end Cisco routers and switches used in AI infrastructure. The shortages are not as acute as five years ago, but hyperscalers’ heavy buying is creating supply inflation, Montanana said.