Gartner Research

Lack of Focus on AI Licensing Will Result in Higher Costs, Risks and Long-Term Headaches

Published: 18 July 2017

ID: G00324982

Analyst(s): Melanie Alexander

Summary

Commercial AI offerings are available and being procured, and the market is set to grow dramatically. Sourcing and vendor management leaders must quickly understand the critical differences between AI procurement and traditional software licenses or SaaS, and how to reduce risks and maximize AI ROI.

Table Of Contents
  • Impacts

Analysis

Impacts and Recommendations

  • AI technologies and vendors are flooding the ever-expanding AI market — from small startups to megavendors, each offering different product bundles and pricing models — making accurate procurement comparisons difficult
    • Core Procurement Challenge: Huge Variety in Pricing Models and Metrics
  • The dynamic nature of the AI market requires that negotiators pay special attention to contract duration, vendor merger-and-acquisition implications/risks, intellectual property ownership, and indirect access rules
    • AI Technologies Are Rapidly Evolving
    • The AI Market Is a Hotbed of M&As
    • Attention Must Be Paid to Intellectual Property Rights
    • Beware Indirect Access Risk: AI Can Bring Significant Financial Exposure When Utilizing Existing Software Systems
  • AI contracts can be complex and risky, often including terms that sourcing and vendor management leaders are unfamiliar with, such as end-user consent, data use and storage, which can result in additional risk
    • AI Agreements Often Contain Unfamiliar Terms and Conditions
    • Even Familiar Terms and Conditions Require Attention

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