Monday Morning Impact – September 2

Published On: September 1, 2024Categories: Buzz

IDC: Worldwide Spending on Artificial Intelligence to Reach $632 Billion in 2028

Worldwide spending on artificial intelligence (AI), including AI-enabled applications, infrastructure, and related IT and business services, will more than double by 2028 when it is expected to reach $632 billion, according to a new forecast from the International Data Corporation (IDC) Worldwide AI and Generative AI Spending Guide.

The Massachusetts-based market researcher also predicts that rapid incorporation of AI, and generative AI (GenAI) in particular, into a wide range of products will result in a compound annual growth rate (CAGR) of 29.0% over the 2024-2028 forecast period.

“AI-powered transformations have delivered tangible business outcomes and value for organizations worldwide and they are building their AI strategies around employee experience, customer engagement, business process, and industry innovations,” said Ritu Jyoti, group vice president and general manager, AI and Data Research at IDC. “With rampant innovations in trusted AI tools and technologies and improved harmonization of human and machines interplay, barriers to AI adoption at scale will continue to diminish.”

While GenAI has captured the world’s attention over the past 18 months, spending on GenAI solutions will be less than the combined total of all other AI applications, such as machine learning, deep learning, and automatic speech recognition & natural language processing. However, the rapid growth in GenAI investments will enable the category to outpace the overall AI market with a five-year CAGR of 59.2%. By the end of the forecast, IDC expects GenAI spending to reach $202 billion, representing 32% of overall AI spending.

Software will be the largest category of technology spending, representing more than half the overall AI market for most of the forecast. Two thirds of all software spending will go to AI-enabled Applications and Artificial Intelligence Platforms while the remainder will go toward AI Application Development & Deployment and AI System Infrastructure Software. Spending on AI hardware, including servers, storage, and Infrastructure as a Service (IaaS), will be the next largest category of technology spending. IT and business services will see a slightly faster growth rate than hardware with a CAGR of 24.3%. In comparison, AI software will see a five-year CAGR of 33.9%.

The industry that is expected to spend the most on AI solutions over the 2024-2028 forecast period is financial services. With banking leading the way, the financial services industry will account for more than 20% of all AI spending. The next largest industries for AI spending are software and information services and retail. Combined, these three industries will provide roughly 45% of all AI spending over the next five years. The industries that will see the fastest AI spending growth are Business and Personal Services (32.8% CAGR) and Transportation and Leisure (31.7% CAGR). In addition, 17 of the 27 industries included in the Spending Guide are forecast to have five-year CAGRs greater than 30%.

IDC says AI spending in the United States will reach $336 billion in 2028, making it the largest geographic region for AI investment and accounting for more than half of all AI spending throughout the forecast period. GenAI spending in the U.S. is forecast to be $108 billion in 2028. Western Europe will be the second largest region for AI spending followed by China and Asia/Pacific (excluding Japan and China).

The Spending Guide quantifies the AI opportunity by providing data for 42 use cases across 27 industries in nine regions and 32 countries. Data is available for two AI types (GenAI and rest of AI), three technology groups with nine technology categories comprising 17 technologies, and two deployment types (public cloud services and on-premises/other).

Channel Impact^®
Many channel partners are currently struggling with the development of strategies to leverage and support AI in their customers’ businesses, as well as their own. This data can provide a much needed sense of direction.

Sophos Launches New Customer Success Initiative

Sophos, a U.K.-based cybersecurity company, has launched a new program featuring a team of experts who support customers throughout their post-sales experience with ongoing security resources and alerts, webinars and other educational information about cyberattacks, such as ransomware and data breaches. Sophos Customer Success is also designed to provide guidance on how organizations can maximize their current investment in the vendor’s portfolio solutions, including Managed Detection and Response (MDR) services, and endpoint, network, email, and cloud security.

The Sophos Customer Success team features two levels of service – a high-touch approach and a tech-touch approach. The high-touch approach involves personalized, hands-on engagement with customers, typically suited for organizations with complex requirements. The tech-touch engagement is more automated and scalable to support partners and MSPs with a larger volume of customers with standardized processes.

“Following the successful launch of Sophos’ Partner Care earlier this year, we saw an industry-leading opportunity to deliver a similar level of ‘white glove’ service directly to our customers,” said Angela Bucher, vice president of Customer Success at Sophos. “By creating a single point of contact for customers, we’re able to work more seamlessly to improve customer satisfaction on many levels. This ‘close touch’ availability also helps partners and MSPs better protect and service their customers.”

Channel Impact^®Sophos Customer Success experts work hand-in-hand with Sophos’ channel partners and Managed Service Providers (MSPs), augmenting support services already available to customers.

ScanSource Launches Integrated Solutions and Services Group

ScanSource, Inc., a Greenville, South Carolina-based distributor has launched its new Integrated Solutions and Services (ISS) group, focused on the development of solutions and services intended to help VARs wrap additional value around hardware offerings.

As the launching point for this new group, ScanSource has acquired Advantix, a VAR-focused, managed connectivity experience provider specializing in wireless enablement solutions. ScanSource has been working with Advantix for more than five years supporting hardware VARs looking to grow their mobility business, and leverage a recurring revenue model.

“The launch of our Integrated Solutions and Services group, coupled with the acquisition of Advantix, allows ScanSource hardware VARs to combine connectivity with hardware, software and services, bringing additional value to the hardware sale and enabling a complete hybrid solution. With more solutions and services comes more margin for the VAR and deeper relationships with their end users,” said Tony Sorrentino, President of ScanSource Specialty Technologies. “Advantix has a proven track record of helping hardware partners add recurring revenue to their practice and will be instrumental to our partners looking to wrap additional services around their hardware sales.”

Ansley Hoke has been named SVP, Integrated Solutions and Services and will head up this group. Hoke has been with ScanSource for more than 22 years. She most recently served as SVP of Worldwide Marketing.

The acquisition closed on August 15, 2024, and the terms of the agreement were not disclosed.

Channel Impact^®The combined company intends to help partners to expand their mobility solutions and build their recurring revenue business, while realizing higher margins and providing greater value to their end-user customers.

Stay in the Know

Keep tabs on what’s happening in the channel and the impact it will have on the partner community by subscribing to Channel Impact communications.