Is AI a Market? And Why It Matters.

Betsy Burton

 

Is AI a Market? And Why It Matters.

We are all seeing the dramatic impact AI and AI agents are having on how people work, how businesses operate and on how systems work.

From powering sophisticated algorithms to generating creative content, AI’s presence is pervasive. But there is an interesting question….is AI, in itself, a market? And does it matter?

Geoffrey Moore, noted author and management consultant defines a market as a group of actual or potential customers with shared needs, seeking a specific set of products or services. Crucially, these customers also reference each other when making buying decisions.

Why is this important? It matters because a “market” represents a specifically defined product or collection or products that someone can actually purchase. And it represents a collection of providers that will sell you a product.

AI is Not a Market

Applying this definition, AI itself is not a market. Rather, AI is a foundational technology, a capability, or a set of tools. It’s the underlying engine that enables new products and services to emerge and address specific customer needs.

Think of the internet or software; they weren’t markets themselves, but they enabled countless new markets to flourish.

Does It Really Matter?

Yes…it really matters.

For technology providers, this confusion can lead to misdirected investments in solutions without a defined customer base or a “whole product” strategy, making it impossible to position their offerings effectively or acquire mainstream customers beyond early adopters. This often results in wasted resources, an inability to differentiate, and ultimately, a failure to reach widespread market adoption.

Similarly, end-user organizations, investing in technologies without clear business outcomes or strategic alignment. This can lead to costly, underutilized assets that fail to deliver tangible value, increased operational complexity, and resistance from employees who don’t perceive the benefit.

The Emergence of AI-Powered Markets

While AI isn’t a market, it is quickly becoming a critical and pervasive technology for the creation and expansion for numerous, distinct markets.

These emerging markets will be characterized by the application of AI to solve specific problems for defined customer segments. For example,

• AI Platform Market
• Agent Platform Market
• Intelligent Contact Center (The Aragon Research Globe™ for AI Agent Platforms in the Intelligent Contact Center, 2025)
• Intelligent Contact Center for SMB (The Aragon Research Globe™ for the Intelligent Contact Center for SMB, 2025)
• Intelligent Unified Communication and Collaboration The Aragon Research Globe™ for Intelligent Unified Communications and Collaboration, 2025
• Intelligent Video Conferencing (The Aragon Research Globe™ for Intelligent Video Conferencing, 2025)
• Content Experience Platforms, 2025

And more to come!

We are also seeing a number of AI-Driven vertical applications. For example, AI in healthcare for clinical operations, AI in agriculture for precision farming, AI in finance for risk management, and AI in autonomous vehicles. In these markets, the “common set of needs” is highly specialized and industry specific.

What Do You Do?

Technology Providers must focus on their potential buyers and develop a complete solution that addresses all aspects of the customer’s problem, not just the core AI technology. This means considering integration, support, training, and a clear value proposition.

End-user organizations need to make sure to avoid the trap of investing in AI simply because it’s trendy. Instead, identify specific business problems or opportunities where AI can deliver tangible value.

Make sure to have a clearly articulated and strategic business outcome that you need to achieve. Is it cost reduction, improved customer satisfaction, faster innovation, or something else?

Bottom Line

AI is the technological backbone of a transformative era. However, the true “markets” lie in its diverse applications that solve customer needs and that providers can deliver.

By understanding what a market is and what is not, end-users and  technology providers can successfully navigate the complexities of this evolving landscape, and reduce the risks of wasted investments.

 

 

 

Upcoming Webinar

 

 

The AI-Driven Imperative: From Integration to Business Transformation

In an AI-everywhere world, organizations face unprecedented pressure to fundamentally reimagine their operations, requiring deeper business transformation than traditional iPaaS can deliver. This webinar explores the emerging Transformation Platform as a Service (tPaaS) market, identifying providers who offer both the technological foundation and the strategic business expertise needed to bridge this critical gap. Join us as we redefine tPaaS in the context of pervasive AI, examine required provider capabilities, and analyze the strengths of early market contenders.

Key things discussed:

• Why has the tPaaS market become so critical?
• What are the key capabilities needed to support tPaaS?
• What is the state of the primary market players?

 

Register Today