TechMarketView introduces the concept of the ‘GenAI Dividend’ to describe the increased growth in the UK Software and IT Services (SITS) market driven by preparations for widespread adoption of generative AI. The firm forecasts this trend to contribute up to £5 billion in net new spending on Software and IT Services from 2024 to 2027.
Georgina O’Toole, Chief Analyst at TechMarketView, highlighted, “The initial impact of the GenAI revolution will be seen as organizations invest in enhancing their digital and data foundations to effectively utilize and optimize generative AI investments in the future. Currently, however, the majority are not adequately prepared.”
After achieving 12.2% growth in 2022, the UK SITS market saw a slowdown to 6.9% in 2023, with further deceleration expected to 5.3% in 2024, influenced notably by inflationary pressures. Adjusted for inflation, the market did not experience real growth in 2023.
Looking ahead to 2027, underlying growth prospects are anticipated to improve. Cloud platforms will continue driving growth significantly, benefiting prominently from the ‘GenAI Dividend’ and bolstering the fortunes of major hyperscalers like Amazon Web Services, Microsoft, and Google Cloud Platform.
However, O’Toole cautioned against significant immediate expenditures on GenAI-focused deployments, stating, “We anticipate minimal spending on GenAI-centric projects in 2024, estimated at less than 1% of the UK SITS market. By 2027, this figure is projected to increase to mid-single digits.”
