Artificial intelligence software is being deployed via a wide range of business models with annual revenue for hybrid solutions reaching $45.5 billion in 2025

Omdia projects there will be room for many approaches and vendors for the foreseeable future

Due to the collaborative and evolving nature of artificial intelligence (AI), several different business models are emerging, ranging from a fully in-house, custom-built approach to a more modular approach using pre-built solutions and tools. According to new research from Omdia, no single business model is going to be right for all enterprises looking to deploy AI and hybrid solutions will be most appealing as the market matures.

According to Omdia principal analyst, Keith Kirkpatrick, “The widespread availability of programming platforms and tools, as well as cloud-based infrastructure, has led to a major shift in the market. Enterprises do not need to lock into a single AI vendor; they can hire data science teams and engineers to develop, train, and run AI models from scratch. However, there is a significant portion of the enterprise market that has neither the skill nor the budget to develop AI from scratch.”  This dynamic has given rise to a plethora of vendors that sell pre-built AI solutions or tools, as well as consultants and contractors that can customize off-the-shelf AI. Omdia forecasts that annual AI software revenue will increase from $10.1bn worldwide in 2018 to $126.0bn in 2025. Hybrid solutions will account for 36% of global annual revenue in 2025, compared with cloud-based AI offerings (20%) and pre-built AI solutions (20%).

Omdia’s report, “Artificial Intelligence Business Models”, provides a quantitative assessment of the market opportunity for the different business models used to develop and deploy AI applications. The study includes analyses of six business models in use globally and within five global regions and 28 industries. An Executive Summary of the report is available for free download on the firm’s website.

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