AWS's study, conducted in partnership with Forrester Research, found a significant increase in R&D spending among independent software vendors (ISVs) to adopt generative AI (genAI).
The report surveyed 657 ISV executives and decision-makers at independent software vendors (ISVs) in APAC, EMEA, and North America. It found that 60% of decision-makers from ISVs have seen their R&D budgets increase by 5% or more. Over half (57%) reported a 5% or more significant increase in genAI product development.
ISVs in APAC are leading the way in the genAI revolution, with 66% having already launched generative AI products in the last six months. This proactive approach puts them ahead of other regions surveyed (North America - 63.4%, EMEA 58.7%). Furthermore, ISVs in APAC have allocated a significant 57% of their R&D budget to generative AI product development, marking a 43% overall adjustment to their R&D budget.
Business-related challenges
When asked about challenges in the development and deployment of GenAI services, respondents underscored pricing strategies (42%), competitive landscape (42%), market demand and adoption (37%), and scalability of a business model (37%).
Tackling the cost
"As ISVs transition from laying their foundation to delivering impactful solutions to customers, they will need to tackle the cost to run genAI solutions and price accordingly to see growth and revenue emerge," the report noted.
To achieve this, the report recommends that organisations invest in R&D, upskill talent in genAI and business specialisation, and build strategic relationships with hyperscalers and frontier model builders (companies at the forefront of AI model development) to leverage their expertise and resources in genAI development.
