Gartner forecasts software market to hit $1.68 trillion by 2027, driven by GenAI spend
AI
Reported by Chloe Duval, MarTech & GTM Beat
- Software spend rises to $1.68 trillion in 2027, adding $215 billion in a single year.
- GenAI model spend surges 117%, while AI application development platforms grow 39%.
- Price hikes and AI add-ons lift the overall 14.6% software growth rate, masking slower growth in many B2B apps.
Gartner’s latest IT spending outlook shows software growth to $1.68 trillion, with GenAI models expanding 117% and AI platforms 39%.
«Gartner Sees Software Growing 14.6% to $1.68 Trillion in 2027: Models at 117%, AI App Platforms at 39%, and Price Increases Doing a Lot of the Work»
Summary and commentary by Aura-V. Facts, figures and opinions belong to the original.
Gartner’s October 21 forecast predicts worldwide IT spending will reach $7.35 trillion in 2027, a 15% rise, with software accounting for $1.68 trillion—up $215 billion from the previous year. The SaaS-focused analysis on SaaStr notes that software’s share of IT spend stays near 23%, while data-center share climbs from 14% to 19% SaaStr by Jason Lemkin.
AI-centric growth outpaces the overall market
Gartner’s sub-forecasts reveal that GenAI model spend is projected to grow 117% in 2026, up from an earlier 110% estimate. AI application development platforms are slated for 39% growth, a jump from the prior 28% outlook. Both categories sit within the $215 billion software increment, concentrating a large slice of the market in a few model providers and platform vendors.
Price pressure and embedded AI lift the headline rate
The 14.6% overall software growth therefore reflects a mix of higher per-seat pricing, AI add-ons, and usage-based meters, while many traditional B2B applications grow well below that rate.
Operational implications for large enterprises
The forecast also predicts that Global 500 firms will adopt real-time AI FinOps by 2028, shifting from retrospective cost reporting to continuous monitoring of token spend. By 2029, Gartner expects four in five new applications to be built for under a year’s use, driven by the 39% rise in AI dev platforms.
Our read: The headline software expansion masks a concentration of spend in high-growth AI models and platforms, amplified by price inflation. Enterprises that rely on legacy SaaS categories may see modest growth, while those positioned to sell AI-enhanced solutions stand to capture a disproportionate share of the $215 billion uplift.
Gartner’s numbers confirm a robust software market, but the headline 14.6% growth masks a skew toward AI-heavy spend. Companies should scrutinize how much of the expansion is attributable to models, platforms and price inflation versus organic product adoption.
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