Asian enterprises are in expansion mode. Regional growth, new markets, and global ambitions are firmly back on the agenda for 2026. But according to a new report from managed services provider Coevolve, many companies may be building that future on shaky ground.
The inaugural Global Business Connectivity Outlook Report 2025–26 paints a picture of confidence colliding with contradiction. More than 70% of surveyed business leaders plan to expand beyond their local region next year, yet the very infrastructure that makes regional and global operations viable—reliable, secure connectivity—is being deprioritized in favor of AI-heavy investments.
It’s a classic tech paradox of the moment: AI dominates boardroom conversations and budget allocations, while the networks that carry AI workloads, cloud traffic, and cross-border data flows struggle to get airtime.
Expansion Is the Goal—New Markets Lead the Charge
Coevolve surveyed more than 50 global business leaders through in-depth interviews, with a strong focus on Asia’s fast-growing and highly fragmented markets. The message on growth is clear. Expansion is no longer optional; it’s strategic.
For more than half of leaders surveyed, new markets are the primary driver of expansion plans. Another 24% point to new products, while 10% cite personnel requirements. Asia’s appeal—rising digital adoption, growing middle classes, and increasingly sophisticated enterprise customers—makes the region a logical next step for ambitious firms.
But Asia is also one of the most operationally complex regions in the world. Regulatory regimes vary sharply by country. Data sovereignty rules are tightening. Network performance can differ wildly across borders. And cybersecurity risks scale rapidly once operations stretch beyond a single jurisdiction.
Those complexities are showing up clearly in executive concerns. Leaders identified compliance (18%), technology complexity (17%), and security (17%) as their top challenges when expanding regionally or globally. All three, the report suggests, are deeply intertwined with connectivity—even if that link isn’t always acknowledged at the top.
Connectivity: Mission-Critical, Yet Missing From the Board Agenda
Nearly three-quarters of respondents (70%) say enhancing connectivity is essential to their expansion strategy. And yet, connectivity remains a second-tier topic in many boardrooms, overshadowed by AI, automation, and cyber resilience initiatives.
That disconnect matters. Connectivity is not just a technical concern—it underpins everything from application performance and cloud access to compliance, customer experience, and business continuity. Weak networks can turn ambitious expansion plans into operational headaches almost overnight.
Coevolve CTO and co-founder Ciaran Roche doesn’t mince words. “It’s staggering to see just how much network connectivity and security are being sidelined in favor of AI hype,” he says. “At a time of increased regulatory pressures and issues with data governance, it is concerning that AI is nearly absorbing half of the technology budgets for Asian businesses—yet the foundational infrastructure that enables it is being neglected.”
The result, Roche warns, is growing digital fragility. Companies may deploy AI tools and cloud platforms faster than ever, but without resilient, well-architected networks, they risk outages, performance bottlenecks, and compliance failures that scale with the business.
The AI Spending Surge—and the Network Budget Squeeze
If there’s one takeaway that defines the report, it’s how decisively AI has captured enterprise spending. When asked about technology priorities to enhance connectivity, one in three leaders said they are investing in AI. Cloud followed at 24%, while network architecture trailed at just 19%.
The spending breakdown is even more revealing. AI accounts for 45% of technology budgets, cloud platforms take 33%, and only 8% is directed toward network architecture.
That imbalance raises uncomfortable questions. AI workloads are data-hungry. Cloud platforms depend on low-latency, high-availability connections. Cross-border operations require consistent performance and secure routing. Yet network investment—the connective tissue of modern IT—is treated as an afterthought.
This pattern isn’t unique to Asia, but the consequences may be more acute there. Unlike more homogeneous markets, Asia’s telecom landscape is fragmented, with varying standards, service quality, and regulatory oversight. Scaling reliably across the region demands more—not less—attention to network design.
Why the AI-First Mindset Can Backfire
The report highlights what Coevolve’s leadership calls an “emerging AI paradox.” Companies are betting heavily on AI to drive efficiency, insight, and competitive advantage, but they may be undermining those gains by ignoring the infrastructure AI depends on.
CEO and co-founder Tim Sullivan notes that while expansion across Asia makes strategic sense, the execution gap is widening. “Companies are investing heavily in AI, yet we still haven’t seen the full impact of AI on telecommunication networks and traffic flows across Asia,” he says. “To help leaders overcome data and compliance complexities across Asia and other diverse geographies, connectivity truly needs to be on the agenda.”
The concern is forward-looking as much as immediate. AI adoption is still in its early enterprise phases. As models become more distributed, inference moves closer to the edge, and real-time analytics become standard, network demands will increase—not flatten. Underinvested connectivity today could become a serious constraint tomorrow.
Compliance, Security, and the Cost of Weak Networks
Regulatory complexity emerged as the top concern among surveyed leaders, and for good reason. Data residency laws, sector-specific compliance requirements, and cross-border data transfer restrictions are tightening across Asia. Poorly designed networks can make compliance harder, not easier.
Security risks compound the problem. Expanding networks without a coherent architecture increases attack surfaces and complicates monitoring. AI tools may enhance threat detection, but they cannot compensate for insecure or fragmented connectivity.
The report suggests that many organizations are treating these issues in silos—AI for innovation, cloud for scalability, cybersecurity for defense—without addressing the shared foundation beneath them. That approach may work in localized environments, but it struggles under the weight of regional or global expansion.
Industry Context: A Familiar Blind Spot
Coevolve’s findings echo a broader trend across the tech industry. Hyped technologies tend to attract disproportionate investment, while infrastructure quietly falls behind. In recent years, similar patterns have played out with cloud migrations that outpaced identity management, and remote work rollouts that strained VPN and network capacity.
What’s different now is the scale and speed of AI adoption. Unlike previous waves, AI touches nearly every part of the enterprise stack. It amplifies both strengths and weaknesses. Strong networks enable seamless AI integration; weak ones expose every flaw.
Rival MSPs and telecom providers have begun pushing “AI-ready network” narratives, emphasizing software-defined networking (SD-WAN), secure access service edge (SASE), and observability-driven architectures. Coevolve’s report suggests many enterprises haven’t fully absorbed that message—at least not at budget time.
What Smarter Expansion Could Look Like
The report stops short of prescribing a one-size-fits-all solution, but its implications are clear. Businesses planning to expand across Asia need to rethink how they sequence and balance technology investments.
Connectivity doesn’t have to compete with AI; it enables it. Modern network architectures can support AI workloads while improving compliance, resilience, and cost control. But that requires visibility at the executive level—and funding that reflects strategic importance.
For boards and C-suites, the takeaway is uncomfortable but necessary: growth strategies that ignore connectivity risk becoming self-limiting. AI may promise transformation, but without strong networks, it can just as easily magnify operational chaos.
A Wake-Up Call for 2026 Planning
As enterprises finalize budgets and roadmaps for 2026, Coevolve’s Global Business Connectivity Outlook Report serves as a timely reality check. Expansion ambitions are high. AI enthusiasm is real. But the fundamentals still matter.
“You can’t scale and grow across Asia on a broken foundation,” Roche warns. It’s a blunt assessment, but one that resonates in a region where digital ambition often runs ahead of infrastructure readiness.
For Asian businesses—and the global firms eyeing the region—the message is simple: before betting everything on AI, make sure the network can carry the load.
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