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Publication date:
05 Jan 2024
Author(s):
Michael Azoff, Chief Analyst, Cloud Native Computing

Omdia Market
Radar: AI-Assisted
Software
Development,
202324
Omdia Market Radar: AI-Assisted Software
Development, 202324
01

© 2024 Omdia. All rights reserved. Unauthorized reproduction prohibited.

Summary

Catalyst

In the space of one year since the launch of ChatGPT in November 2022, the market and appetite for using
generative artificial intelligence (GenAI) based on large language models (LLMs) have grown enormously. In
this report, Omdia examines the impact of this technology on AI-assisted software development. This field
has a history going back to the rise of machine learning (ML) in the last decade with a startup market in-
code assistant tools, some open source, and some spinoffs from academia. As GenAI and LLM became
available, some of these startups were able to adopt this technology while new players appeared on the
market to capture the opportunity. AI is being used in software engineering for code generation, code
assistant (pair programmer), testing and debugging, security inspecting, quality checking, and more.

Omdia view

The explosion of interest in LLMs reflects the high quality of the human-machine interfaces, knowledge, and
expertise provided by these models. This step change in quality improvement has also impacted software
development, especially when it was realized that ChatGPT could act as a code assistant. Notably, the
application of AI to coding has been in the market for some years. For example, GitHub Copilot was first
launched in October 2021, and Codex (its LLM) is based on OpenAI GPT-3.

A previous Omdia report, Generative AI: The impact of AI-based autocoding on software development,
looked at what the technology was capable of and identified the many AI code assistant tools available in
the free open-source market, as well as some commercial products. And Omdia Universe: No Code, Low
Code Solutions, 202324 examined enterprise development solutions for citizen developers, all of which
make use of AI. In this market landscape, Omdia examines in greater depth the AI-assisted coding tools
market, a market that is rapidly evolving. The analysis in this report provides a snapshot of what is available
today and points to where this market is heading. Omdia believes the trend is for greater capability and
higher accuracy, based on reviews of academic research published and analysis of leading products on the
market.

The products reviewed in this report have been built with great care in the selection of data used to train
the AI models. The vendors can vouch that no license has been violated using the training data. They have
also given much attention to ensuring high quality outputs and a reduction in the presence of
“hallucinations,” the euphemism used in the industry for errors. Of much interest to enterprises is the
capability to augment a vendor product with private data (from code to documents) to enhance the
relevancy of the output to the unique needs of the organization. Ultimately, Omdia still recommends a
human-in-the-loop: the presence of humans to check generated output.

Key messages

AI-assisted software development is a rapidly evolving market, with both startups and
established technology vendors involved.

The impact of OpenAI’s technology has boosted the market for AI-assisted software
development.
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