The State of Engineering

ICONIQ Analytics + Insights - The State of Engineering 2024.pdf

Key takeaway

• For entrepreneurs: Embracing AI and DevOps is crucial for scaling engineering teams efficiently and maintaining high developer productivity.
• For investors: Companies that invest in AI and robust engineering processes are likely to see significant productivity gains and better ROI.

Summary

"The State of Engineering" by ICONIQ provides a comprehensive analysis of modern engineering organizations in 2024, focusing on developer productivity, DevOps maturity, and AI integration. It highlights the importance of holistic productivity measurement, the evolution of DevOps practices, and the growing impact of AI on engineering workflows.

Insights

• Developer Productivity:
  • There's no universally accepted definition of developer productivity, with differing perceptions between CTOs and engineers.
  • A holistic framework for assessing productivity should include business impact, performance and reliability, developer effectiveness, and culture.
  • 76% of top-performing companies track productivity via developer productivity tools or satisfaction surveys.
• DevOps Maturity:
  • 76% of companies in the $250M+ revenue range have fully implemented CI/CD tools.
  • Most companies build automated testing suites as early as the <$25M revenue stage.
  • Top-performing companies tend to have faster testing processes, showing results as quickly as daily or several times a day.
• AI Integration:
  • About 70% of companies have an AI component in their product suite, with 90% of companies in the $250M+ revenue range having AI-enabled customer-facing products.
  • 60-70% of respondents plan to embed new AI or introduce AI-related products in the next 12 months.
  • 72% of respondents plan to hire at least one AI-related role in 2024.
• Work Arrangements:
  • 76% of respondents have engineering teams that operate with a remote-first office arrangement.
  • Engineers who are primarily in-office or work 1-2 days in office each week tend to get more hours of coding done per day compared to fully remote engineers.
• R&D Spend:
  • Companies expect to increase R&D spend across OpEx and headcount by ~12-13% YoY in 2024.
  • Top-performing companies are planning for larger increases in R&D spend.

Implications

• Engineering leaders should focus on improving team-level efficiency and developer experience rather than individual productivity metrics.
• Investing in DevOps practices and AI integration can lead to significant productivity gains and better business outcomes.