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IDC: AI revenue estimated to grow 12% to $156.5bn in 2020

$124.7bn in software, $13.4bn in hardware, $18.4 billion in services

Chuck Martin

August 10, 2020

2 Min Read

$124.7bn in software, $13.4bn in hardware, $18.4 billion in services

Global revenue for AI-related hardware, software, and services is estimated to total $156.5 billion in 2020, according to the International Data Corporation (IDC).

Despite slower growth compared to previous years due to the impact of COVID-19, this would mark an increase of 12 percent over 2019.

By 2024, AI tools and software are expected to generate $300 billion in revenue, increasing at a CAGR of 17 percent.

The largest AI technology group is software, expected to account for 80% of all AI revenue.

Breaking it down

Of software revenue, $120.4 billion is projected to be generated by AI-based applications, with AI software platforms accounting for the rest at $4.3 billion.

Intelligent CRM applications will account for 20 percent of the AI applications market, with ERM AI applications accounting for another 17 percent, according to IDC.

By vendor, Adobe leads AI-centric CRM applications and Microsoft is first in AI non-centric CRM applications.

Services is the second largest category in AI, estimated to reach $18.4 billion in 2020, an increase of 13 percent from 2019. In this segment, AI-based IT services account for nearly 80 percent of the revenue, with AI-based business services delivering the remainder.

The leading companies by market share are IBM, Accenture, Deloitte, Infosys, and Cognizant, accounting for a third of the worldwide AI services market in 2019.

Revenue for AI hardware, comprising server and storage combined, is projected to reach $13.4 billion in 2020, growing 10% from 2019. The sector saw a 33 percent increase between 2018 and 2019.

AI storage is estimated to grow 11 percent this year, and servers for AI are projected to account for more than 80 percent of AI hardware revenue.

By next year, the overall hardware market is estimated to grow 35 percent, led by a 43 percent increase in AI storage.

By vendor, the leading companies in the AI server segment are Dell, HPE, and Inspur, all with double-digit market share. Dell, NetApp, and HPE lead in the AI storage market.

"While the overall market has seen a slowdown due to the COVID-19 pandemic, investments for AI and analytics infrastructure will continue, and perhaps increase, in specific industries such as life sciences, healthcare, and media and entertainment,” said Amita Potnis, research director in IDC's enterprise infrastructure practice.

“Storage will see stronger growth than servers owing to new data generation along with existing datasets that will be curated to support AI models with increased adoption of high-performance parallel file systems and all-flash object stores."

About the Author(s)

Chuck Martin

Editorial Director AI & IoT

Chuck Martin, a New York Times Business Bestselling author, futurist and columnist, is Editorial Director at Informa Tech, home of AI Business, IoT World Today and Enter Quantum. Martin has been a leader in emerging digital technologies for more than two decades. He is considered one of the foremost Internet of Things (IoT) experts in the world and his latest book is titled "Digital Transformation 3.0" (The New Business-to-Consumer Connections of The Internet of Things).  He hosts a worldwide podcast titled “The Voices of the Internet of Things with Chuck Martin,” where he converses with top executives from the companies driving the Internet of Things.

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