The International Data Corporation (IDC) forecasts explosive growth in the global AI software market, with a remarkable compound annual growth rate (CAGR) of 31.4%. This growth is expected to take the market from $64 billion in 2022 to nearly $251 billion by 2027. It highlights the growing significance of AI across various industries and its transformative role in the future of business operations.
Diverse categories drive AI software market expansion
The IDC’s forecast covers several categories within the AI software landscape:
- AI Applications: Leading in 2023, these applications include collaborative tools, content management, CRM, and more. They are expected to have a five-year CAGR of 21.1%.
- Artificial Intelligence Platforms: The second-largest category with a robust 35.8% CAGR, these platforms play a pivotal role in AI model and application development.
- AI System Infrastructure Software (AI SIS): Expected to grow with a five-year CAGR of 32.6%, AI SIS integrates with existing systems to extract valuable insights for decision-making and operational optimization.
- AI Application Development and Deployment (AI AD&D) Software: This category, with a 38.7% CAGR, encompasses analytics, business intelligence, data management, and more, supporting application development and deployment.
These categories demonstrate the diverse applications and potential for growth in the AI software market, each contributing to the industry’s expansion and impact.
Growing demand for customized AI solutions
A recent IDC survey suggests that approximately one-third of respondents expect organizations to increasingly prefer a combination of vendor-supplied AI software and in-house support for specific use cases. This trend reflects a growing demand for customized AI solutions tailored to individual business needs.
Raghunandhan Kuppuswamy, a Research Manager at IDC, emphasizes the sustained momentum behind investments in AI and automation technologies. He highlights the recognition among businesses of the strategic necessity of adopting cutting-edge technology for long-term success, even in the face of economic uncertainty and shifting market dynamics.
IDC’s Group Vice President, Ritu Jyoti, anticipates the convergence of traditional AI with Generative AI. This convergence is expected to bring innovative solutions that combine decision-making capabilities with creative ingenuity. Jyoti also emphasizes the importance of addressing challenges and prioritizing ethical considerations in AI adoption to maximize long-term return on investment (ROI). This reflects a holistic approach to AI integration and its impact on businesses.
