AI Software Sales Set to Skyrocket with 40.6% CAGR in Next Five Years: Report

Artificial intelligence (AI) is taking the world by storm, and the numbers speak for themselves. The market for AI platforms software experienced a rapid growth in 2023, and it shows no signs of slowing down. According to a forecast by the International Data Corporation (IDC), the revenue for AI platforms software is projected to reach a staggering $153.0 billion by 2028, with a compound annual growth rate (CAGR) of 40.6% over the forecast period from 2023 to 2028.

So, what’s driving this remarkable momentum? The increasing adoption of AI across various industries is the key factor. Companies are realizing the potential of AI to transform their products, revolutionize their business models, and gain a competitive edge. As Ritu Jyoti, the group vice president and general manager of IDC’s Artificial Intelligence, Automation, Data and Analytics research, puts it, “Rapid innovations in generative AI is changing how companies think about their products, how they develop and deploy AI applications, and how they leverage technology themselves for reinventing their business models and competitive positioning.”

In 2023, AI adoption reached new heights, with worldwide AI platform software revenue growing by a whopping 44.4% year over year to $27.9 billion. Microsoft emerged as a leader in the AI platforms software market, thanks to its robust and comprehensive products, as well as its vast ecosystem of products and services. Microsoft’s AI solutions seamlessly integrate with its popular software and cloud services, providing a seamless experience for businesses and developers alike. Other top players in the market include Palantir, OpenAI, Google, and Amazon Web Services.

But what does this mean for organizations? According to IDC’s Future Enterprise Resiliency and Spending Survey, half of the organizations currently deploying generative AI (GenAI) in production have already selected an AI platform. And for those organizations that have already made significant investments in AI, most of them plan to do so in the next six months. The potential of AI to enhance user experience, optimize advertising, personalize content, and improve data analytics is undeniable. These advancements can drive increased online activity and commerce, leading to positive economic impacts.

However, it’s important to acknowledge that AI also comes with significant risks. Organizations need to be proactive in identifying patterns and anomalies, spotting potential risks, and addressing problems before they escalate. As Raghunandan Kuppuswamy, research manager of Artificial Intelligence and Automation at IDC, warns, “While not all risks can be removed, risk mitigation can be accelerated using AI itself, providing better security and resilience for customers.”

So, how do AI platforms facilitate the development and deployment of AI models and applications? These platforms encompass various technology components, including machine learning (ML), deep learning, generative AI (GenAI), natural language processing (NLP), text analytics, and more. They enable the creation of intelligent assistants that can mimic human cognitive abilities. In simpler terms, AI platforms help companies harness the power of AI to solve complex problems, understand data, and make informed decisions.

The AI platforms market consists of three functional markets: AI life-cycle software, AI software services, and search and knowledge discovery software. And when it comes to deployment, cloud-based solutions are gaining traction. IDC predicts that revenue from AI platforms in the public cloud will have a five-year CAGR of 50.9%, surpassing on-premises deployments. Cloud vendors offer advanced security measures, data and regulatory compliance, and scalability capabilities, making them an attractive choice for businesses seeking AI solutions.

In conclusion, the future of AI platforms software looks incredibly promising. With the rapid advancement of technology and the growing demand for AI solutions across industries, cloud-based deployment of AI platforms software is expected to continue expanding at a rapid rate. As the IDC report, “Worldwide Artificial Intelligence Platforms Software Forecast, 2024-2028: AI Integration Accelerates, Fueling Technological Breakthroughs and Business Transformations,” suggests, AI is not just a buzzword – it’s a transformative force that is reshaping industries and driving technological breakthroughs.

Background Information

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About Google:

Google, founded by Larry Page and Sergey Brin in 1998, is a multinational technology company known for its internet-related services and products. Initially for its search engine, Google has since expanded into various domains including online advertising, cloud computing, software development, and hardware devices. With its innovative approach, Google has introduced influential products such as Google Search, Android OS, Google Maps, and Google Drive. The company's commitment to research and development has led to advancements in artificial intelligence and machine learning.

  

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About IDC:

IDC, or International Data Corporation, is a global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. Established in 1964, IDC offers valuable insights into industry trends, market forecasts, and technology adoption through its research and analysis. Their expertise aids businesses, governments, and IT professionals in making informed decisions and strategies.

  

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About Microsoft:

Microsoft, founded by Bill Gates and Paul Allen in 1975 in Redmond, Washington, USA, is a technology giant known for its wide range of software products, including the Windows operating system, Office productivity suite, and cloud services like Azure. Microsoft also manufactures hardware, such as the Surface line of laptops and tablets, Xbox gaming consoles, and accessories.

  

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