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The Artificial intelligence-as-a-Service (AIaaS) market is estimated to grow at a CAGR of 40.17% between 2022 and 2027. The size of the market is forecast to increase by USD 28,773.14 million. The growth of the AIaaS market depends on several factors, including increasing investment in R&D, cloud-based solutions, and the increasing adoption of AI in predictive analysis.
This report extensively covers market segmentation by end-user (retail and healthcare, BFSI, telecommunication, government and defense, and others), type (software and services), and geography North America, APAC, Europe, Middle East and Africa, and South America. It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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Robust adoption of cloud-based solutions is notably driving the market growth, although factors such data privacy issues hampers the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Adoption of cloud-based solutions is the key driving factor for the growth of Artificial Intelligence-as-a-Service Market. The worldwide acceptance of cloud computing services has led to the acceptance of cloud-based applications that can be used in multiple end-user industries. The inherent advantages of cloud computing, such as minimal infrastructure computing costs, scalability, reliability, and high resource availability, have led enterprises to adopt cloud-based solutions. The adoption of cloud computing also reduces operating costs by eliminating the need for a dedicated IT support team. To get the most value, businesses are adopting pay-as-you-go services. It aims to accelerate the adoption of cloud-based applications through a service model.
Availability of advanced and scalable infrastructure at low cost will be one of the major factors driving the global AIaaS market during the forecast period. Developing an AI platform requires significant investment in hardware, software, sensors, maintenance and repair. Software also requires regular maintenance and upgrades to meet changing business needs. Firms prefer to outsource these tasks to AIaaS providers to avoid these direct costs in implementing and utilizing AI that will drive market growth during the forecast period.
Rising number of merger and acquisitions is emerging trend in the AIaaS market. The global AIaaS market is growing due to the expansion of AIaaS coverage and associated AIaaS market growth. Service providers in the banking, retail, and healthcare sectors are moving their business models to cloud-based models.In addition, companies are opening AI research centers with government support. Market participants choose these partnerships and acquisitions to gain access to new customers. In addition, it helps market players access new technologies that help improve their product portfolios.
These strategic partnerships will help vendors to expand their geographic presence, increase their customer base, and provide improved AI services, which will support the growth of the market during the forecast period.
The rising concern for data privacy is a major challenge impeding the market growth. AI-based solutions use big data to gain insights for future business planning and operational optimization. The emergence of advanced AI solutions has raised privacy concerns. Privacy issues arise in AI due to the ability of tools to make autonomous decisions and actions. In addition, companies use data anonymization techniques to generalize key details of data points and prevent data breaches when deploying AI. However, sensitive data like this is the key to AIaaS. Ensuring the privacy and anonymity of data points and large amounts of data therefore becomes a major challenge for enterprises.
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Artificial Intelligence-as-a-Service (AIaaS) Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Tencent Holdings Ltd.-The company offers solutions for artificial intelligence-as-a-service which helps the developers focus exclusively on solving problems that matte and helps the business run faster, smarter, and at planet scale. Also, the company offers online games and social networks.
Oracle Corp.- The company offers solutions for artificial intelligence-as-a-service which accelerate development with built-in business logic that enables one to launch solutions in days. Also, the company offers Oracle Cloud Services offerings, cloud license and on premise license offerings, and license support offerings.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth by the retail and healthcare segment will be significant during the forecast period. AI brings many benefits to retail, and its integration has become necessary for companies in this industry to remain competitive.
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The retail and healthcare segment showed a gradual increase in the market share of USD 195.58 million in 2017 and continued to grow by 2021. Artificial Intelligence-as-a-Service is growing as the healthcare sector undergoes a digital revolution across the globe. With the advent of smartphones and the ubiquity of the internet worldwide, connected healthcare offers many benefits for patients and the healthcare sector. Digital healthcare not only simplifies healthcare service delivery, but also helps manage patient data easily and securely, creating new revenue streams for stakeholders.
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North America is estimated to contribute 39% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Due to the widespread adoption of cloud, AI, ML, and big data analytics to generate business insights, AIaaS market in North America is growing.Data generation from industries such as telecommunications, manufacturing, retail, and energy is also increasing in North America, driving the adoption of AI-based solutions.
In 2020, the AIaaS market in North America witnessed a temporary decline in growth rate owing to the COVID-19 pandemic. Economic downturn in North America hampered the growth of the market. Moreover, the initiation vaccination drives coupled with lifting of lockdown restriction led to a decrease in the number of COVID-19 cases in the region. Additionally, economic conditions showed a sign of stability, which enhanced the adoption of AI in the region. North American companies are increasingly pioneering the adoption of data-driven business models and the use of advanced technologies such as AI, ML and IoT which is expected to drive AIaaS adoption across region during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
The reports categorize the global artificial intelligence-as-a-service (AIaaS) market as a part of the global application software market within the global IT software market. The parent global application software market covers companies that are engaged in developing and producing application and system software. It also includes companies offering database management software. The global application software market covers companies that are engaged in developing and producing software designed for specialized applications for the business or consumer market. It includes enterprise and technical software, as well as cloud-based software. It excludes companies classified in the interactive home entertainment sub-industry and companies producing systems or database management software classified in the systems software sub-industry. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
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Artificial Intelligence-as-a-Service (AIaaS) Market Scope |
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Report Coverage |
Details |
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Page number |
181 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 40.17% |
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Market growth 2023-2027 |
USD 28,773.14 million |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
36.54 |
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Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
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Performing market contribution |
North America at 39% |
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Key countries |
US, Canada, China, Germany, and UK |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Accenture Plc, Alphabet Inc., Amazon.com Inc., Baidu Inc., Capgemini Service SAS, Cognizant Technology Solutions Corp., Dell Technologies Inc., Fujitsu Ltd., Hitachi Ltd., Huawei Technologies Co. Ltd., Infosys Ltd., Intel Corp., International Business Machines Corp., Microsoft Corp., NVIDIA Corp., Oracle Corp., SAP SE, Tata Consultancy Services Ltd., Tencent Holdings Ltd., and Wipro Ltd. |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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