AI software again accounted for the largest share of the overall AI market in 2021. Combined, the four AI software categories – AI application 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, in which AI technologies are central and critical to the function of the application, continued to slowly grow their share of the AI software market. In 2021, AI-centric applications captured 12.9% of the market, up 29.3% year over year. The remainder of the market was held by AI non-centric applications, where AI technologies are integral to certain workflows of the application, but if those technologies were removed, the application would still be able to function.
Similarly, the deployment of AI software to the cloud continues to show steady growth. In 2021, 47.3% of AI software purchases were deployed to the public cloud, an increase of 4% over 2020 and 8.4% over 2019. IDC expects cloud deployment of newly purchased AI software to surpass on-premises deployments in 2022.
The AI services market saw its total value increase 22.4% year over year to $24 billion in 2021. Client demand for expertise in developing production-grade AI solutions helped the AI IT services category grow 21.9% year over year to $18.8 billion. The AI business services category grew 24.2% year over year as organizations sought assistance on AI governance, business processes and talent strategies.
AI hardware was both the smallest ($18.8 billion) and fastest growing (38.9% year-over-year growth) segment of the AI market. The hardware growth was driven by efforts to build dedicated AI systems capable of meeting the increased compute and storage demands of AI models and data sets. While both AI servers and AI storage delivered strong growth in 2021 – 39.1% and 32.9%, respectively – server purchases were notably larger at $15.6 billion.
