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Channel partners primed as customers aggressively adopt AI

Channel partners primed as customers aggressively adopt AI

Customers from retail, banking and discrete manufacturing leading the way

The channel is preparing to capitalise as artificial intelligence (AI) continues its aggressive growth trajectory across local and global markets, with end-user deployment aspirations turning into reality.

According to IDC findings, worldwide spending on AI systems is expected to reach US$35.5 billion in 2019, representing an increase of 44 per cent compared to the previous year.

Such growth should act as encouragement for partners actively building out AI skill-sets and practices, as industries invest heavily in projects utilising AI software capabilities.

Of note to the channel, the AI use cases expected to receive the most investment during the next 12 months are automated customer service agents; sales process recommendation and automation and automated threat intelligence and prevention systems, totalling US$4.5 billion, US$2.7 billion and US$2.7 billion respectively.

As revealed by IDC, five other use cases will see spending levels greater than US$2 billion in 2019: automated preventative maintenance; diagnosis and treatment systems; fraud analysis and investigation; intelligent process automation, and program advisors and recommendation systems.

“Significant worldwide artificial intelligence systems spend can now be seen within every industry as AI initiatives continue to optimise operations, transform the customer experience, and create new products and services,” said Marianne Daquila, research manager at IDC.

“This is evidenced by use cases, such as intelligent process automation, expert shopping advisors and product recommendations, and pharmaceutical research and discovery exceeding the average five-year compound annual growth of 38 per cent.

“The continued advancement of AI-related technologies will drive double-digit year-over-year spend into the next decade.”

Daquila said global spending on AI systems will be led by the retail industry, an industry expected to invest US$5.9 billion in 2019 on solutions such as automated customer service agents and expert shopping advisors and product recommendations.

Next up, banking will be the second largest industry with US$5.6 billion investment, focusing on automated threat intelligence and prevention systems and fraud analysis and investigation systems.

Meanwhile, discrete manufacturing, healthcare providers, and process manufacturing will complete the top five industries for AI systems spending in 2019, according to IDC.

Delving deeper, the industries that will experience the fastest growth in AI systems spending up until 2022 are federal and central government (44.3 per cent), personal and consumer services (43.3 per cent), and education (42.9 per cent).

Credit: Dreamstime

Specific to technology, software will be the largest area of AI systems spending in 2019 with nearly US$13.5 billion going toward AI applications and AI software platforms.

Furthermore, IDC has reported that AI applications will be the fastest growing category of AI spending with a five-year CAGR of 47.3 per cent.

Hardware spending, "dominated by servers", will total US$12.7 billion, as businesses build out the infrastructure necessary to support such AI systems.

According to David Schubmehl - research director at IDC - customers will also invest in IT services to help with the "development and implementation" of their AI systems, in addition to business services through consulting.

Schubmehl said that by the end of the forecast, AI-related services spending will nearly equal hardware spending.

"IDC is seeing that spending on both AI software platforms and AI applications are continuing to trend upwards and the types and varieties of use cases are also expanding," Schubmehl added.

“While organisations see continuing challenges with staffing, data, and other issues deploying AI solutions, they are finding that they can help to significantly improve the bottom line of their enterprises by reducing costs, improving revenue, and providing better, faster access to information thereby improving decision making.”

In looking ahead, IDC expects spending on AI systems will more than double to US$79.2 billion in 2022 with a compound annual growth rate of 38 per cent over the 2018-2022 forecast period.


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