Companies Are Getting Choosier About Their AI Vendors

Whether you’re keeping things in-house or outsourcing your AI operation, finding a good tech partner that sticks is a dicey proposition.

2024 is off to a roaring start for corporate artificial intelligence budgets, with 66% of companies increasing their budgets and only 4% decreasing those budgets, according to a recent study by Spiceworks and Aberdeen Research.

While there’s no doubt companies are actively engaged in AI spending this year, exactly where their AI budget cash will go is another issue entirely.

That’s the takeaway from a new study by Austin, Tx.-based Futurum Intelligence which tracks (and ranks) 159 AI deployment vendors.

In the report, Futurum shines a light on an interesting topic. Who are companies choosing as their primary AI partners and vendors and how long are those partnerships lasting? Spoiler alert – not as long as you likely think, the study states.

“Following a year of innovation and R&D in AI across cloud computing, SaaS, Embedded End-to-End, semiconductors, and hardware, the market is now expected to yield signs of monetization among its players,” the report noted. “The power centers of traditional IT vendors for the enterprise have naturally pioneered with their AI deployment offerings among their customers, but in 2024, enterprise decision-makers intend to make some surprising changes.”

As far as choosing an AI vendor, those changes look significant in 2024. This from the study.

• Of those who outsource, 45% plan to change their vendors this quarter or early 2024.
• For those who insource, 47% plan to change vendors.
• Top decision criteria as well as criteria for ‘excellence in meeting requirements’ were found to be expertise and experience with AI (40% and 35% respectively).
• Failure criteria to meet requirements was found to be implementation speed and timeline and projected time to value (23% and 22% respectively.
• Among those who outsource, Accenture is selected as the primary consultant/integrator by far (25%), followed by Deloitte (14%), CGI, and KPMG.
• Among outsourcing companies who deploy (paid) SaaS / Embedded for AI deployments, select vendors are Microsoft (21%), followed by Google (14%), AWS, and IBM (13.5% and 10% respectively).
• In 2023 Microsoft leads as the primary vendor in SaaS / Embedded AI (21%) followed by Google (14%).
• Within SaaS/Embedded, select vendors for End-to-End AI Applications rank AWS as a primary vendor (21%) followed by Microsoft (19%), IBM, and Google (15% and 10.5% respectively).
• Among companies who seek to change their choice of AI deployment vendor in 2024, Google and Microsoft rank almost evenly at 9.6% and 9.2% respectively, for SaaS/Embedded solutions while AWS and Google are the select choices for End-to-End solutions newly integrated in 2024 (7% and 5.5%).

Everyone Gets a Bite of the Apple

While all the above points deserve a closer look by companies seeking a trusted, long-term AI partner, one pops up as perhaps the most striking takeaway – companies aren’t afraid to shake things up and spread cash around with their AI budgets.

“Given all the media attention to DIY-AI, I was a bit surprised at the percentage of organizations that are currently leveraging outsourced AI services, which we define as an end-to-end application, like a Nuance AI customer service automation, or SaaS/Embedded AI, such as Adobe’s Firefly, or Photoshop,“ said Marc Beccue, AI research director at The Futurum Group.

Beccue, who said he was “astonished” by the numbers, said companies are approaching AI vendor relationships in intriguing ways.

“52% are outsourcing in this way today, while 48% are primarily pursuing in-house development of AI. Our data indicates that organizations are going to spread their AI investments in 2024, there are strong metrics for keeping vendors but also adding new ones,” he said.

That strategy should wind up giving AI vendors a bite of the apple and a chance to prove their AI goods and services deserve client funding for the long haul.

“While Google (10%) and Microsoft (9%) were the top two choices for organizations seeking to add new vendors in late 2023 or 2024, 13 other large SaaS vendors are each expected to garner interest from buyers, reflective of the variety of quality, enterprise-grade solutions that are successfully integrating AI within their platform,” noted Keith Kirkpatrick, research director, enterprise applications at Futurum.

Recent Posts

Leave a Reply

Your email address will not be published. Required fields are marked *