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Artificial intelligence is taking over the world—at least when it comes to investments coming its way.
According to IDC’s Worldwide Semiannual Artificial Intelligence Tracker, the global revenue for the AI market totaled $383.3 billion in 2021. The increase was 20.7% compared to the previous year. IDC experts project the AI market value to reach nearly $450 billion in 2022. The market will also sustain a year-over-year growth rate in the high tens throughout a five-year forecast period.
AI software takes the largest share of AI spending with AI platforms delivering a 36.6% growth. It’s segmented into four categories—AI Applications Delivery & Deployment, AI Applications, AI System Infrastructure Software, and Artificial Intelligence Platforms. Altogether, these segments delivered more than “$340 billion in market value in 2021 with AI Applications representing nearly half the total,” the report said.
The AI services market is also one of the biggest gainers. Its total value was $24 billion in 2021 with a total increase of 22.4% year-over-year. Other important segments in the AI market include AI IT Services and AI Business Services. The former covers the demand for professionals with AI expertise in developing production-grade AI solutions, while the latter refers to organizations looking for managed services that could provide assistance on AI governance, business process, and talent strategies.
The smallest yet fastest growing segment of the AI market was AI hardware. It accounted for $18.8 billion in revenue and had a 38.9% year-over-year growth. Experts attribute the AI hardware market growth to the sales of AI servers and AI storage—both used in building dedicated AI systems to meet the increasing compute and storage demands of AI models and data sets.
AI-Powered CRM, ERM Top AI Applications Market
AI applications are driving the growth of the global SaaS market. In 2021, AI-centric applications, for example, accounted for 12.9% of the market, up 29.3% year over year. AI-centric refers to apps where AI is integral to its functions. Meanwhile, non-AI-centric apps are those that would still function even without AI capabilities.
Artificial intelligence has become a buzzword in the technology industry—and for a good reason. Businesses across industries are using AI for a variety of applications. Software vendors are now integrating AI into their products to handle a wide range of tasks, from simple applications to more complex and human-like use cases.
In the IDC data tool, customer relationship management (CRM) applications and enterprise resource management (ERM) applications were the top products in the AI applications category. Each delivered 16% of the category’s total revenue.
AI in CRM platforms perform functions that help businesses better understand their customers. One of the best examples is using AI to study different sales scenarios. AI-based CRM helps salespeople analyze the entire sales process. Sales managers can get insights into the stages of their sales funnel and understand why a customer rejected or accepted a deal. Sales managers can then provide data-driven recommendations to their sales reps on the next best course of action.
Meanwhile, ERM systems help businesses manage and connect various business processes and departments. An AI-powered ERM streamlines these complex processes through machine learning models and conversational AI. Also, AI models can improve advanced analytics and forecasting by comparing historical data and current business conditions.
AI-powered ERM systems can also provide a lot of benefits to businesses that handle factory production, warehouse management, and retail. Analysts or managers can also improve their demand forecasting and adjust sales targets using insights from AI-powered ERM.
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