Worldwide revenues for the artificial intelligence (AI) market, including software, hardware, and services, is estimated to grow 15.2% year over year in 2021 to $341.8 billion, according to IDC’s Worldwide Semiannual Artificial Intelligence Tracker.
The market is forecast to accelerate further in 2022 with 18.8% growth and remain on track to break the $500 billion mark by 2024. Among the three technology categories, AI Software occupied 88% of the overall AI market. However, in terms of growth, AI Hardware is estimated to grow the fastest in the next several years. From 2023 onwards, AI Services is forecast to become the fastest growing category.
Within the AI Software category, AI Applications has nearly 50% of revenues. In terms of growth, AI Platforms is the strongest with a five-year compound annual growth rate (CAGR) of 33.2%. The slowest will be AI System Infrastructure Software with a five-year CAGR of 14.4% while accounting for roughly 35% of all AI Software revenues. Within the AI Applications market, AI ERM is expected to grow slightly stronger than AI CRM over the next five years. Meanwhile, AI Lifecycle Software is forecast to grow the fastest among the markets within AI Platforms.
“Disruption is unsettling, but it can also serve as a catalyst for innovation and transformation. 2020 was the year that accelerated digital transformation and strengthened the value of enterprise AI,” said Ritu Jyoti, group vice president for AI and Automation Research at IDC. “We have now entered the domain of AI-augmented work and decision across all the functional areas of a business. Responsible creation and use of AI solutions that can sense, predict, respond, and adapt at speed is an important business imperative.”
The AI Services market was estimated at $19.4 billion in 2020, representing the fastest growth relative to hardware and software. For 2021, it is forecast to grow at 19.3%. Over the next five years, it is expected to enjoy the best CAGR at 21%.
“AI has emerged as an essential component of the future enterprise, fueling demand for services partners to help organizations clear the many hurdles standing between pilot projects and enterprise AI,” said Jennifer Hamel, research manager, Analytics and Intelligent Automation Services. “Client demand for expertise in developing production-grade AI solutions and establishing the right organization, platform, governance, business process, and talent strategies to ensure sustainable AI adoption at scale drives expansion across both IT services and business services segments.”
Channel partners pursuing the Contact Center as a Service (CCaaS) market have seen major gains through the integration of AI in most solutions.vice providers.