In a dynamic landscape of technological advancements, the global artificial intelligence (AI) software market is set to undergo a remarkable transformation, according to a recent forecast by the International Data Corporation (IDC). The projections reveal an impressive surge, with the market expected to catapult from $64 billion in 2022 to nearly $251 billion in 2027, boasting a compelling compound annual growth rate (CAGR) of 31.4%.
This comprehensive forecast for AI-centric software encompasses various facets, including Artificial Intelligence Platforms, AI Applications, AI System Infrastructure Software (SIS), and AI Application Development and Deployment (AD&D) software (excluding AI platforms). Notably, Generative AI platforms and applications, though excluded from the aforementioned figures, are predicted by IDC to generate revenues of $55.7 billion in 2027, adding another dimension to the burgeoning AI landscape.
A recent survey conducted by IDC provides valuable insights into the preferences of organizations regarding AI software acquisition. Approximately one-third of respondents anticipate that organizations will opt to purchase AI software from a vendor or leverage in-house support alongside vendor-supplied AI software, particularly for specific use cases or application areas. This signifies a growing demand for tailored AI solutions, emphasizing the need for customized approaches aligned with individual business requirements.
Raghunandhan Kuppuswamy, Research Manager for Artificial Intelligence and Automation at IDC, emphasizes the unwavering momentum behind investments in AI and automation technologies. Despite economic uncertainties and shifting market dynamics, businesses recognize the strategic necessity of embracing cutting-edge technology. Kuppuswamy states, “Utilizing cutting-edge technology is not only a strategic necessity but also a crucial factor in achieving long-term success.” Organizations remain confident that the adoption of AI is integral to future-proofing their operations and staying ahead in a competitive landscape.
Breaking down the AI software market, AI Applications emerge as the current frontrunner, constituting approximately one-third of the market’s total revenue in 2023. This category encompasses collaborative, content workflow and management, enterprise resource management (ERM), supply chain management, production and operations, engineering, and customer relationship management (CRM) applications. Despite being the largest category, AI Applications are projected to experience a slightly slower revenue growth compared to the overall market, with a five-year CAGR of 21.1%.
Artificial Intelligence Platforms claim the second-largest share of revenue in 2023, with the second-fastest growth rate forecasted for the 2023-2027 period, boasting a robust CAGR of 35.8%. These platforms play a pivotal role in facilitating the development of AI models and applications, including intelligent assistants capable of mimicking human cognitive abilities. Positioned as the largest revenue category for a significant portion of the forecast period, AI Platforms signify a critical driver of the overall AI software market expansion.
As the global AI software market propels towards unprecedented growth, businesses and organizations worldwide are gearing up to harness the transformative power of AI technologies. The forecasted surge not only underscores the increasing reliance on AI but also underscores the imperative for businesses to adapt and integrate innovative solutions to remain at the forefront of the rapidly evolving digital landscape.
