PAC Horizons 2025 Germany: Key Insights on AI, Automation, and the Future of Digital Transformation in Europe

PAC Horizons 2025 in Munich and Frankfurt provided a comprehensive exploration of the rapidly evolving world of digital transformation, focusing on how Agentic AI, industrial automation, cybersecurity, and post-S/4HANA strategies are redefining the future of work and technology in Europe.

We would like to extend our sincere thanks to all speakers, participants, and PAC analysts for their valuable insights, engaging discussions, and active contributions. This article summarises the key highlights, trends, and takeaways shared during the sessions.

European IT Services Market Outlook 2025–2029

Speaker: Dan Bieler, Principal Analyst

PAC Horizons 2025 opened with an in-depth look at Western Europe’s IT services market in the age of AI. Despite economic headwinds, the market is projected to grow by 4.3% in 2025, reaching approximately €100 billion.

However, traditional IT services will expand by only 1.5%, while SaaS, cloud, and platform models will surge by 7.7%, reflecting a strong shift from software licences to platform-based spending.

Between 2025 and 2029, growth is forecast to accelerate to a 6.2% CAGR, though the divide between traditional services and platform models will persist.

→ Related research: Germany IT services market figures and forecasts

Digital Sovereignty in Europe: Balancing Innovation, Efficiency, and Independence

Speaker: Karsten Leclerque, Principal Analyst

The session examined the growing importance of digital sovereignty in Europe, driven by geopolitical tensions and the dominance of global tech giants.

The central challenge is reconciling independence, innovation, and efficiency. Digital sovereignty means that governments, enterprises, and public institutions retain control over the data and technologies they depend on—especially in regulated sectors and critical infrastructure.

Strategies vary across Europe, ranging from pragmatic cloud-sovereignty models and (in)sourcing approaches to open-source initiatives for software and AI.

Key takeaway: Sovereignty and innovation must go hand in hand to ensure Europe’s long-term digital resilience.

→ Related research: Sovereign Cloud in Europe – Part 1: Common Approaches – InSight Analysis

How Generative AI Is Redefining Customer Relationships

Speakers: Jennifer Jonat, Analyst & Dan Bieler, Principal Analyst

Generative AI (GenAI) is reshaping the rules of customer engagement, loyalty, and search engine optimisation (SEO). As users shift from search engines to AI-driven response systems, brands face a new form of disintermediation—where AI merges content into aggregated answers, reducing visibility and brand attribution.

Companies must now adopt Generative Engine Optimisation (GEO) strategies—adapting content for large language models (LLMs), safeguarding IP, and managing AI reputation risks.

Opportunities: More targeted leads, new channels for Gen Z, and enhanced personalisation.

Challenges: Lack of transparency in AI selection mechanisms and rising content theft risks.

Conclusion: To remain visible and credible in the AI-driven customer journey, brands must rethink SEO strategy and embrace AI-native marketing approaches.

→ Related research: GenAI Search Is Disrupting Customer Engagement and GEO vs SEO – How to Optimize for AI Search – InBrief Analysis

SAP Beyond 2030: Strategies for the Post-S/4HANA Era

Speakers: Tobias Ortwein, CDO, Joachim Hackmann, Principal Analyst and Peter Färbinger (E3 Magazine)

What happens after most organisations complete their SAP S/4HANA transformations?

Discussions in Munich and Frankfurt emphasised that future SAP landscapes must remain open and interoperable to integrate AI innovations and third-party ecosystems.

Dr Andreas Winkler of Messe Frankfurt shared insights from their global cloud-based S/4HANA roll-out, stressing the need for smoother application integration and closer collaboration with SAP service partners to drive continuous innovation.

Takeaway: Post-migration success will depend on integration quality, ecosystem openness, and ongoing innovation—not just on system completion.

Agentic AI and the Future of Work

Speakers: Aida Oganesov, Analyst & Tom Reuner, Principal Analyst

Agentic AI is becoming a key driver of the future of work, enabling systems that make autonomous decisions and actively shape workflows.

PAC’s sessions explored how European organisations are adopting AI-driven automation, where they see potential, and what barriers remain—from trust to data readiness and leadership structures.

Key insight: AI-powered decision-making and automation are redefining roles, leadership, and accountability at every organisational level.

→ Related research: The Future of Work with Agentic AI – Redefining Roles, Teams, and Leadership – InBrief Analysis

Industrial-grade AI

Speaker: Velia Janetzky, Head of Digital Excellence, Siemens Electronics Factory Erlangen

As our guest speaker, Velia showcased how industrial-grade AI is revolutionising manufacturing. Over 100 AI algorithms are already running on the shop floor – earning the site its designation as a Global Lighthouse Factory by the World Economic Forum (WEF).

AI transformation in research

Speaker: David Nogales, Head of Technology Strategy at Merck Life Science

The session explored the challenges and opportunities of AI transformation in life science research, where strict regulatory requirements, fragmented data, and diverse device landscapes continue to slow progress. These factors make the implementation of AI in pharmaceutical R&D both complex and resource-intensive.

Merck showcased its innovative myGPT platform, designed as a central AI hub to streamline research processes and accelerate decision-making. By automating data transfer and enabling AI-driven report generation, Merck has achieved significant efficiency gains and measurable time savings across its laboratories.

Each additional layer of automation—from data preparation to analysis—creates further value, helping laboratories move towards fully digital, AI-enabled research environments.

Industry 2030: Human vs. Humanoid Robots

Speaker: Arnold Vogt, Principal Analyst

The next decade will see rapid advances in industrial robotics—particularly humanoid robots designed to operate in human-centred factory and warehouse environments.

Drivers include AI progress, labour shortages, demographic shifts, and innovative European robotics start-ups. However, challenges remain in foundation models, battery performance, hand-like manipulation, component standardisation, and ROI measurement.

PAC’s advice: Don’t wait for humanoid robots to become mainstream. Invest today in warehouse automation, matrix production, and other pragmatic paths towards Industry 5.0.

→ Related research: Digital Business Models in Manufacturing – Latest Customer Examples and Trends – InBrief Analysis

Cybersecurity 2030: What’s Coming and What’s Staying

Speaker: Wolfgang Schwab Principal Analyst

Cybersecurity in Europe is evolving rapidly. New AI-powered attacks, regulatory pressures, and supply-chain vulnerabilities are reshaping both daily operations and strategic planning.

Current challenges:

• AI-supported attacks and defences
• Supply-chain and cloud-native security
• IAM 2.0 and zero-trust architectures

Emerging priorities:

• Autonomous cyber defence
• Post-quantum cryptography
• AI governance and LLM security

Key insight: Existential threats require dedicated specialist projects, while IT-integrated cybersecurity must evolve through embedded, cross-functional collaboration.

→ Related research: The Next Big Thing(s) in Cybersecurity – InBrief Analysis

Network APIs: Unlocking Next-Generation Customer Experience

Speaker: Dan Bieler, Principal Analyst

Network APIs are transforming telecom innovation and customer experience by allowing direct interaction between applications and telecom networks.

Instead of operating “over the top”, applications can now request network features—like latency, bandwidth, or security levels—to deliver customised, high-performance digital experiences.

This API-driven approach enables telcos to create new revenue streams while offering developers richer, programmable connectivity services.

Success factors: Simplicity, strong collaboration between telcos and developers, and clear positioning of network APIs as a strategic growth enabler.

Conclusion: Innovation, Openness, and Collaboration Define Europe’s Digital Future

PAC Horizons 2025 underscored how AI, automation, and cybersecurity are converging to reshape markets, work, and technology across Europe.

The discussions in Munich and Frankfurt reaffirmed that Europe’s digital future depends on openness, collaboration, and continuous innovation – across ecosystems, industries, and borders.

To explore how PAC’s research and analyst insights can support your strategic planning for 2026, contact us or follow us on LinkedIn for the latest updates on AI and digital transformation in Europe.