Skip to main content

AI Developers Drive New Demand for IT Vendor Services

Preparing for the adoption of new technologies is challenging for many large enterprise organizations. That's why savvy CIOs and CTOs seek information and guidance from vendors that can assist them on the journey to achieve digital business transformation. Meanwhile, investment in artificial intelligence (AI) systems and services will continue on a high-growth trajectory.

According to the latest worldwide market study by International Data Corporation (IDC), spending on AI systems will reach $97.9 billion in 2023 -- that's more than two and a half times the $37.5 billion that will be spent in 2019. The compound annual growth rate (CAGR) for AI in the 2018-2023 forecast period will be 28.4 percent.

Artificial Intelligence Market Development

"The AI market continues to grow at a steady rate in 2019 and we expect this momentum to carry forward," said David Schubmehl, research director at IDC. "The use of artificial intelligence and machine learning (ML) is occurring in a wide range of solutions and applications from ERP and manufacturing software to content management, collaboration, and user productivity."

Artificial intelligence and machine learning are top of mind for most organizations today, and IDC expects that AI will be the disrupting influence changing entire industries over the next decade.

Spending on AI systems will be led by the retail and banking industries, each of which will invest more than $5 billion in 2019. Nearly half of the retail spending will go toward automated customer service agents and expert shopping advisors & product recommendation systems. The banking industry will focus its investments on automated threat intelligence and prevention systems and fraud analysis and investigation.

Other industries that will make significant investments in AI systems throughout the forecast include discrete manufacturing, process manufacturing, healthcare, and professional services. The fastest spending growth will come from the media industry and federal or central governments with five-year CAGRs of 33.7 percent and 33.6 percent respectively.


Investments in AI systems continue to be driven by a wide range of use cases. The three largest use cases -- automated customer service agents, automated threat intelligence and prevention systems, and sales process recommendation and automation -- will deliver 25 percent of all spending in 2019. The next six use cases will provide an additional 35 percent of overall spending this year.

The use cases that will see the fastest spending growth over the 2018-2023 forecast period are automated human resources (43.3 percent CAGR) and pharmaceutical research and development (36.7 percent CAGR). However, eight other use cases will have spending growth with five-year CAGRs greater than 30 percent.

Decision-makers across all industries are now grappling with the question of how to effectively proceed with their AI journey.  That's why the largest share of technology spending in 2019 will go toward services, primarily IT services, as firms seek outside expertise to design and implement their AI projects.

Hardware spending will be somewhat larger than software spending in 2019 as firms build out their AI infrastructure, but purchases of AI software and AI software platforms will overtake hardware by the end of the forecast period with software spending seeing a 36.7 percent CAGR.

Outlook for AI Applications Development Growth

On a geographic basis, the United States will deliver more than 50 percent of all AI applications development spending throughout the forecast period, led by the retail and banking industries. Western Europe will be the second-largest geographic region, led by banking and discrete manufacturing.

China will be the third-largest region for AI spending with retail, state or local government, and professional services vying for the top position. The strongest spending growth over the five-year forecast period will be in Japan (45.3 percent CAGR) and China (44.9 percent CAGR).

Popular posts from this blog

Wireless Solutions Advance Work from Home Trends

Despite a challenging backdrop from the ongoing effects of the global COVID-19 pandemic, the negative impact on fifth-generation (5G) wireless supply chains has been minimal compared to the wider mobile smartphone market. This led to 5G mobile devices becoming more diverse, brought to market quickly at a variety of price points, thereby accelerating affordability and adoption. The mobile market is transitioning to 5G and many leading vendors are now exploring the low-priced 5G smartphone segment. According to the latest worldwide market study by ABI Research, 681 million 5G handsets will be shipped in 2022. Therefore, the race is on for OEMs to find that all-important level of differentiation in their flagship portfolios to help boost margins and improve market share. 5G Wireless Market Development Vendors continue to drive the adoption of new product designs, screen technology, chipsets, and camera setups -- notably within the flagship smartphone segment. Meanwhile, the leaders seek a

Software-Defined Infrastructure: The Platform of Choice

As more organizations adapt to a hybrid working model for their distributed workforce, enterprise CIOs and CTOs are tasked with delivering new productivity-enabling applications, while also seeking ways to effectively reduce IT cost, complexity, and risk. Traditional IT hardware infrastructure is evolving to more software-based solutions. The worldwide software-defined infrastructure (SDI) combined software market reached $12.17 billion during 2020 -- that's an increase of 5 percent over 2019, according to the latest market study by International Data Corporation (IDC). The market grew faster than other core IT technologies. The three technology pillars within the SDI market are: software-defined compute (53 percent of market value), software-defined storage controller (36 percent), and software-defined networking (11 percent). "Software-defined infrastructure solutions have long been popular for companies looking to eliminate cost, complexity, and risk within their data cente

Digital Identity Verification Market to Reach $16.7B

As more enterprise organizations embrace the ongoing transition to digital business transformation, CIOs and CTOs are adopting new technologies that enable the secure identification of individuals within their key stakeholder communities. A "digital identity" is a unique representation of a person. It enables individuals to prove their physical identity during transactions. Moreover, a digital identity is a set of validated digital attributes and credentials for online interactions -- similar to a person's identity within the physical world. Individuals can use a 'digital ID' to be verified through an authorized digital channel. Usually issued or regulated by a national ID scheme, a digital identity serves to identify a unique person online or offline. Digital Identity Systems Market Development Complementary to more traditional forms of identification, digital identity verification systems can enhance the authenticity, security, confidentiality, and efficiency of