As enterprises race to adopt AI, a new reality is emerging: aging networks, tightening data sovereignty rules and looming quantum threats are putting digital performance and security at risk
Enterprises today face a rapidly evolving landscape shaped by three converging forces: quantum threats, tightening data sovereignty rules and aging networks that struggle to support AI driven operations. While leaders recognize the need to modernize, there remains a gap between awareness and action — particularly in preparing for post-quantum security risks, redesigning systems for sovereignty and upgrading networks that form the backbone of digital performance.
The Kyndryl Readiness Report, a global study of 3,700 business and technology leaders across 21 countries, shows the actions organizations are taking to address these challenges.
Quantum computing presents both opportunity and existential risk. Even as most organizations invest in quantum technologies, few treat post-quantum cryptography as an urgent priority — leaving enterprise data, identities and systems increasingly exposed.
At the same time, data sovereignty is becoming a defining constraint for global business. Regulatory divergence and geopolitical tensions are forcing organizations to rethink where data lives, how applications are designed and how cloud providers support compliance.
Networks — long treated as invisible infrastructure — now sit at the center of enterprise performance. As AI systems demand high quality, uninterrupted data flow, aging or fragmented networks are emerging as one of the biggest barriers to realizing value from technology investments.
The path forward requires integrated modernization. Enterprises that proactively prepare for quantum threats, design architectures for sovereignty and modernize networks to support AI will be better positioned to reduce risk, accelerate innovation and strengthen long term resilience.
Key takeaways
Quantum computing will reshape enterprise performance and expose today’s cryptography to unprecedented risk.
Most organizations acknowledge quantum’s potential, yet few treat the security threat as urgent. Only 4% of leaders rank quantum as the most impactful near‑term technology, even as 62% invest in it and 20% question its short‑term ROI. This mismatch between risk and readiness leaves critical systems vulnerable.
Data sovereignty is no longer a compliance issue — it is a strategic design constraint.
84% of leaders say sovereignty and repatriation regulations have grown more important in the past year, and 86% say alignment from cloud providers is increasingly critical. With rising geopolitical tension and stricter rules on data movement, enterprises must treat sovereignty as a core architectural requirement.
Networks now determine enterprise performance, especially in an AI‑driven operating model.
Aging networks are limiting innovation: 25% of mission‑critical infrastructure is at end‑of‑service, and 20% of leaders say networks are a primary barrier to scaling recent investments. Only 37% believe their network is prepared for future risk, even as 35% invest heavily in modernization. AI performance depends on reliable, real‑time data movement — and legacy networks cannot keep pace.
Networks now determine enterprise performance, especially in an AI‑driven operating model.
Enterprises must adopt quantum‑ready cryptography, sovereignty‑by‑design principles and agile, automated networks to withstand rising cyber threats and operational complexity. Those that modernize cohesively — not in silos — will be better equipped to manage risk and unlock performance across the business.
Read more about security and networks at Kyndryl:
Preparing for disruption and opportunity in quantum computing
A CIO’s guide
to the quantum
threat
How conversations around sovereignty are redrawing the digital map