IDC: Artificial Intelligence Spending Rises Sharply

Worldwide revenues for the artificial intelligence (AI) market, including software, hardware, and services for both AI centric and AI non-centric applications, totaled $383.3 billion in 2021, an increase of 20.7% over the prior year, according to the most recent International Data Corporation (IDC) Worldwide Semiannual Artificial Intelligence Tracker. IDC expects the AI market value will reach nearly $450 billion in 2022 and maintain a year-over-year growth rate in the high teens throughout the five-year forecast.

“Across all industries and functions, end-user organizations are discovering the benefits of AI technologies, as increasingly powerful AI solutions are enabling better decision-making and higher productivity,” said Rasmus Andsbjerg, associate vice president, Data & Analytics at IDC. “The reality is, AI offers solutions to everything we are facing at the moment. AI can be a source for fast-tracking digital transformation journeys, enable cost savings in times of staggering inflation rates and support automation efforts in times of labor shortages.”

AI Software again accounted for the largest share the overall AI market in 2021. Combined, the four AI Software categories – AI Applications Delivery & Deployment, AI Applications, AI System Infrastructure Software, and Artificial Intelligence Platforms – delivered more than $340 billion in market value in 2021 with AI Applications representing nearly half the total. Artificial Intelligence Platforms delivered the strongest year-over-year growth at 36.6%, albeit from a smaller baseline.

Within the AI Applications category, AI Customer Relationship Management (CRM) Applications and AI Enterprise Resource Management (ERM) Applications each delivered about 16% of the category total. The remainder was delivered by the myriad of other AI Applications available in the market. With nearly 300 companies vying for opportunities to gain share, the AI Applications market remains highly competitive.

IDC’s AI Tracker also shows that AI centric applications continued to slowly grow its share of the AI Software market. In 2021, AI-centric applications captured 12.9% of the market, up 29.3% year over year. In 2021, 47.3% of AI Software purchases were deployed to the public cloud, an increase of four percentage points over 2020 and 8.4 percentage points over 2019. The AI Services market saw its total value increase 22.4% year over year to $24 billion in 2021. The AI Business Services category grew 24.2% year over year as organizations sought assistance on AI governance, business process, and talent strategies.

Channel Impact^®
Artificial Intelligence is a new frontier for the indirect sales channel, and the numbers demonstrate why key players are building strategies around it.