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AI to be Bigger than IaaS and PaaS Combined by 2025, According to IDC (via The Register)

Posted on
August 19, 2021
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According to an article by The Register, analyst firm IDC has predicted that by the year 2025 more money will be spent on artificial intelligence software and services than on infrastructure-as-a-service (IaaS) and platforms-as-a-service (PaaS).

On Wednesday, IDC published details of its Worldwide Semi-Annual Artificial Intelligence Tracker, which predicted global spending of $341.8 billion this year – a growth of 15.2 percent year-over-year. Growth will accelerate to 18.8 percent in 2022, leading IDC to predict the market is on track to pass $500 billion annual spend by 2024.

AI software currently dominates, accounting for 88 percent of AI expenditure.

For the next couple of years, IDC predicts that AI hardware will grow fastest, until AI services takes over from 2023. AI services will be a $50 billion market by 2025, with IT services likely to account for 80 percent of spend and general business services accounting for the rest.

AI System Infrastructure Software is predicted to enjoy five-year compound annual growth rate (CAGR) of 14.4 percent while accounting for roughly 35 per cent of all AI Software revenues. In the AI Applications market, IDC says growth of enterprise risk management wares will outperform CRM over the next five years.

Over in the public cloud, IDC has forecast infrastructure-as-a-service and platforms-as-a-service will crack $400 billion annual revenue in 2025, thanks to 28.8 percent CAGR over the coming years.

The market has done plenty of cloud migration already, and it has shifted to app modernization. This gets you closer to what IDC called "agile application delivery and cloud operations". PaaS and IaaS growth will also be driven by the need to scale data growth without also scaling capital expenditure.

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Written by
Posted on
August 19, 2021
Artificial Intelligence

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