4 AI Software Trends Shifting Buying Behavior

1. 92% of businesses plan to invest in AI-powered software

There’s a near-universal commitment to AI — 92% of organizations we surveyed plan to invest in AI tools in 2024, and 71% say they are certain or extremely likely to do so. This AI trend highlights that artificial intelligence is no longer a niche technology but a necessity across business verticals.

Driving this widespread adoption is the growth of generative AI, popularized by AI chatbots such as ChatGPT and DALL-E due to their productivity and time-saving benefits. Gartner research predicts that gen AI will account for over one-third of AI software spending by 2027. ^[1]

As businesses develop more realistic expectations, the focus is shifting toward built-in AI functionality that enhances or complements existing software toolkits rather than relying on stand-alone AI solutions that aim to replace existing software ecosystems.

Leading the charge in AI technology adoption are the IT and financial services industries. Survey respondents from these sectors express complete certainty (100%) that their organizations will invest in AI-powered solutions in 2024.

2. Businesses are adopting AI innovations to navigate economic challenges

In the face of economic uncertainties, businesses are turning to AI investments as a strategic advantage. Per our survey data, 61% of businesses plan to increase their technology budget in 2024, with a staggering 92% looking to adopt AI-powered solutions in a cost-conscious environment. This trend highlights the growing recognition of AI's potential to innovate processes, maximize output, and enable informed strategic decisions.

Additionally, 52% of buyers seek strategic software investments to improve business productivity and efficiency. The assumption is that businesses that leverage AI-driven tools can streamline operations, optimize resource allocation, and gain a competitive edge in challenging economic times.

3. AI software spending is expected to remain strong, with supply keeping pace with demand through 2027

Gartner predicts that the AI software market will be valued at $297.9 billion by 2027, up from $124 billion in 2022, growing at a compound annual rate of 19.1%. ^[1] Even though AI software adoption is still at a relatively early phase, these growth rates signal immense opportunities for software providers capable of effectively integrating AI into their offerings.

Software providers can anticipate ongoing demand for both AI platforms (used to build AI systems) and AI-enabled applications (software with built-in AI smarts). What's more encouraging is that these markets are not expected to saturate until 2027, when supply outstrips demand. ^[2]

One area of particular interest for software buyers is generative AI capabilities. By 2026, more than 70% of independent software vendors are expected to embed gen AI into their applications, up from less than 1% in 2023. ^[1] This leap shows just how quickly AI is becoming a must-have capability for buyers.

4. Three in five businesses seek more functionality in recently purchased software, and AI can fit the mold

Software buyers are increasingly seeking new product functionality, and AI tools are perfectly positioned to meet this need. In our survey, 61% of businesses revealed plans to upgrade recently purchased software to gain more features.

Imagine a midsize retail company that has recently purchased a new inventory system. The software is efficient, but the team quickly realizes they need more to outshine competitors. They want smarter insights, better predictions, and automation that streamlines operations. By integrating AI technology such as predictive analytics and automated reporting, inventory software providers can transform a good product into an indispensable tool for customers.

Software providers releasing artificial intelligence features and functionality have ample opportunities to influence existing customers, boost satisfaction, and build loyalty. They can attract buyers looking to replace, upgrade, or right-size their existing solutions.

Stay ahead in the software market with buyer insights

New technologies, use cases, and best practices are constantly emerging in the AI software market. As a technology provider, you need to continuously monitor these evolving market trends, research emerging technologies, and invest in innovation to meet the changing needs of buyers.

To delve deeper into these technology trends and unlock more insights, read the complete 2024 Global Software Buying Trends Report.

Amita Jain

Amita Jain covers B2B content creation and strategy to help businesses reach their marketing goals. She received her master’s degree from King’s College London, U.K. Exploring the world of art and reading fiction are some of her usual happy distractions outside of work. Connect with Amita on LinkedIn.

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Sources 

1. Forecast Analysis: Artificial Intelligence Software, 2023-2027, Worldwide, Gartner
2. Predicts 2024: The Transformative Impact of Generative AI on Legal Technologies, Gartner

Survey methodology

Gartner Digital Markets’ 2024 Software Buying Behavior Survey was conducted to understand the composition, triggers, budgets, and challenges of software buying teams at global businesses across industries and sizes. We sought to uncover the software types these buyers are adopting, their evaluation methods, and what factors convince them to make a purchase, from vendor reputation and sales team interactions to content materials and user reviews.

The survey was conducted online in August and September 2023 among 2,499 respondents from the U.S., U.K., Canada, Australia, France, India, Germany, Brazil, and Japan, with businesses across multiple industries and company sizes (5 or more employees). Respondents were screened to ensure involvement in software purchasing decisions.