A recent forecast from International Data Corporation (IDC)
shows that the worldwide artificial intelligence (AI) software market
will grow from $64 billion in 2022 to nearly $251 billion in 2027 at a
compound annual growth rate (CAGR) of 31.4%. The forecast for AI-centric
software includes Artificial Intelligence Platforms, AI Applications,
AI System Infrastructure Software (SIS), and AI Application Development
and Deployment (AD&D) software (excluding AI platforms). However, it
does not include Generative AI platforms and applications, which IDC
recently forecast will generate revenues of $28.3 billion in 2027.
A recent IDC survey found that, in the next 12 months, roughly a third
of respondents believe that organizations will prefer to buy AI software
from a vendor or use in-house support alongside vendor-supplied AI
software for specific use cases or application areas. This indicates a
growing demand for AI solutions and highlights the need for customized
approaches based on individual business requirements.
"The momentum behind investments in AI and automation technologies
remains unwavering despite economic uncertainty and shifting market
dynamics. Businesses are realizing that utilizing cutting-edge
technology is not only a strategic necessity but also a crucial factor
in achieving long-term success. Despite potential challenges and risks,
organizations are confident that adopting AI will continue to be crucial
for future proofing their business operations and remaining ahead of
the competition," said Raghunandhan Kuppuswamy, research manager, Artificial Intelligence and Automation Research at IDC.
AI Applications is currently the largest category of AI software,
accounting for roughly one third of the market's overall revenue in
2023. The category includes collaborative, content workflow and
management, enterprise resource management (ERM), supply chain
management, production and operations, engineering, and customer
relationship management (CRM) applications. Revenue growth in the AI
Applications category will trail the overall market with a five-year
CAGR of 21.1%.
The second largest category in terms of 2023 revenue is Artificial
Intelligence Platforms. With the second fastest growth rate over the
2023-2027 forecast period (a 35.8% CAGR), AI Platforms will be the
largest revenue category for most of the forecast. AI Platforms
facilitate the development of artificial intelligence models and
applications, such as intelligent assistants that can mimic human
cognitive abilities.
The two smallest categories - AI Systems Infrastructure Software (AI
SIS) and AI Application Development and Deployment (AI AD&D)
software - will both grow revenues faster than the overall market with
five-year CAGRs of 32.6% and 38.7%, respectively. The AI SIS category
benefits from its integration with existing software systems, allowing
organizations to derive valuable insights from vast amounts of data to
make informed decisions and optimize operations. The category includes
analytics, business intelligence software, data management, integration,
orchestration, application development, software quality, life-cycle
software, and application platforms. The AI AD&D category includes
analytics and business intelligence software, data management,
integration and orchestration, application development, software quality
and life-cycle software, and application platforms.
"The AI landscape is changing rapidly. Convergence of traditional AI
with Generative AI will lead to cutting-edge solutions that combine
decision efficacy with creative ingenuity," said Ritu Jyoti,
group vice president, Worldwide Artificial Intelligence and Automation
market research and advisory services at IDC. "As businesses continue to
invest in AI, they should be prepared to address challenges and
prioritize ethical considerations to maximize the long-term ROI."
* Note: IDC defines artificial intelligence (AI) software as
AI-centric software. AI-centric applications must have an AI component
that is crucial to the application - without this AI component the
application will not function. IDC also recognizes a second type of AI
software - AI noncentric software. In AI noncentric applications, the AI
component is not crucial or fundamental to the application. In other
words, the application will function without the inclusion of the AI
component. This enables the inclusion of applications that are enhanced
by AI capabilities but not exclusively used for AI functions.
The IDC report, Worldwide Artificial Intelligence Software Forecast, 2023-2027
(IDC #US50027023), presents a forecast of the worldwide artificial
intelligence (AI) software market for 2023-2027. The forecast provides
forecast details for AI-centric and AI non-centric software as well as
by technology category. The AI Applications category is further broken
down into four sub-categories: content management and workflow, customer
relationship management (CRM), enterprise resource management (ERM),
and other AI applications. Revenue for three geographic regions and two
deployment types is also provided.