State of the Generative AI Market Report 2024

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Steve Hall

Steve Hall

Prashant Kelker

Prashant Kelker

David Menninger

David Menninger

Ryan Swagerty

Ryan Swagerty

It has been almost two years since generative AI (GenAI) emerged with force onto the technology landscape, and two things are now clear. First, GenAI will significantly impact and transform every industry—it is just a matter of time. Second, we are still in the early stages of adoption and there are significant challenges to harnessing the power of GenAI during this transition. While there is clearly an abundance of hype, it is also clear that this truly will drive dramatic change, presenting opportunities and risks for every enterprise. In many ways, it is similar to the late 1990s when the internet was young and there was much weeding out and growing needed. This 2024 State of the GenAI Market report will guide you and your enterprise on the key themes and developments that are shaping the landscape, highlighting both the successes and the obstacles for successfully navigating this crucial new technology.

One of the most notable trends in the GenAI market is the increasing sophistication and accessibility of GenAI models. While advancements in deep learning algorithms and computational resources have enabled these models to better understand and generate complex content across various domains, the reality is that leveraging these capabilities effectively is far from straightforward.

From natural language processing and image synthesis to automated code generation, enterprises face challenges in integrating GenAI solutions into their existing workflows, ensuring data quality and managing the costs associated with these technologies.

To help address the cost issue, more than half of the software providers evaluated in our GenAI Buyers Guide have implemented some form of cost control and most have informed us of further plans in this area.

The rapid adoption of GenAI also brings other new challenges to the forefront. It is proving very difficult for enterprises to hire or develop the AI skills they need among their teams. Concerns such as data privacy, algorithmic fairness and the potential for misuse have become more prominent, prompting the need for robust governance frameworks and explicit ethical guidelines. Many enterprises find themselves ill-equipped to navigate these complexities, risking unintended consequences and negative impacts. By acknowledging and addressing these challenges, enterprises can make more informed decisions and drive meaningful progress in an evolving landscape.

Bring your questions to the table as you sit down with this report. What’s actually happening out there with GenAI — beyond the hype? What types of use cases are having an impact? Should we build or buy? What key risk is in our blind spot? And if everyone keeps pace with adoption anyway, is it even possible to achieve differentiation?

This report is designed to be a key resource as you navigate your AI planning and evaluation over the next six months.

 

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About the authors

Steve Hall

Steve Hall

What he does at ISG

As the leader of ISG’s business in EMEA and an Executive Board Member, Steve provides strategic insight and advice to help ISG’s clients solve their most critical business challenges, helping them adopt and optimize the technology and operating models they need to compete successfully. In particular, he uses his long experience and broad expertise to challenge and inspire them to think about their risks and opportunities in new and unexpected ways.

Past achievements for clients

Steve leads his team’s engagement with clients with an industry-recognized and highly valued perspective on the most important trends in business and technology. He asks and answers the big questions: Why do you need to transform? What’s your best way forward? What do you need to accelerate? And where should you invest your technology dollars to make it all happen?

Among his many client success stories, his ability to take in the big picture, define the problem and connect the dots to the right solutions helped one legacy postal and shipping giant transform itself into a modern logistics powerhouse. He also guided a global energy industry leader through a complex operating model and IT provider transition, helping them see past the obvious cost cutting measures to identify the root causes of their challenges—and delivering savings far beyond what they had imagined.
Prashant Kelker

Prashant Kelker

Prashant Kelker is Chief Strategy Officer of ISG, Partner of ISG Americas Consulting and a member of the ISG Executive Board (IEB). He was named to the IEB in January 2023. Prashant was appointed Chief Strategy Officer in 2018, responsible for developing the firm’s three-year strategic blueprint, and he was instrumental in the development of our highly successful ISG NEXT operating model in 2020.

In January 2023, he was named to the expanded role of Partner, Americas Consulting, bringing together all our advisory capabilities in the region to support our commercial and public sector clients in response to the growing convergence of digital technology and enterprise operating models, business processes and revenue-generating connected products and services.

Prashant joined ISG in 2012 from Accenture, initially working for our DACH business and based in Germany. He moved with his family to the United States in 2018. Prashant earned his MBA from the Indian Institute of Management in Bangalore and a BE in electronics from Bangalore University in India.
David Menninger

David Menninger

David manages the software research and advisory for IT and leads the expertise in AI.  He oversees the team and expertise areas for software used by IT and for what is used by business. David leads the software research efforts in AI for IT and AI-infused software building on over three decades of experience in data and analytics. For decades, he has brought to market leading-edge analytics and data products in marketing and product leadership positions at Pivotal (a division of EMC), Vertica Systems, Oracle, Applix, InforSense, and IRI Software. David earned his MS in Business from Bentley University and a BS in Economics from the University of Pennsylvania.
Ryan Swagerty

Ryan Swagerty

Ryan Swagerty is an Assistant Director, Software Research at ISG.

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