Conversational Systems Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

The Report Covers Global Conversational AI and the Market is Segmented by Modality Type (Uni-Modal and Multi-Modal), Type (Voice Assisted and Text Assisted), Deployment (On-Premise and Cloud), Enterprise Size (Small & Medium Enterprises, Large Enterprises), End-user Verticals (IT & Telecommunication, BFSI, Government, Retail, Energy & Power, and Other End--Users), and Geography (North America, Europe, Asia Pacific, Latin America, Middle East and Africa). The market sizes and forecasts are provided in terms of value in USD million for all the above segments.

Conversational Systems Market Size

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Conversational Systems Market Summary
Study Period 2019 - 2029
Market Size (2024) USD 53.13 Billion
Market Size (2029) USD 20.43 Billion
CAGR (2024 - 2029) 21.06 %
Fastest Growing Market Asia Pacific
Largest Market North America

Major Players

Conversational Systems Market Major Players

*Disclaimer: Major Players sorted in no particular order


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Conversational Systems Market Analysis

The Conversational Systems Market size is estimated at USD 53.13 billion in 2024, and is expected to reach USD 20.43 billion by 2029, growing at a CAGR of 21.06% during the forecast period (2024-2029).

Conversational systems are intelligent machine solutions that understand language and conduct verbal or written customer conversations. These systems are aimed at improving the customer experience by boosting interaction. 

  • The availability of large amounts of data and increasing data-related complexities in enterprises are expected to drive the market demand for conversational system solutions. Further, the requirement of artificial intelligence (AI)-enabled systems to mimic human brains is one of the crucial parameters responsible for the development of the industry.
  • The usage of conversational systems is increasing because of deep neural networks, machine learning, and other advancements in AI technologies. Conversational systems like chatbots are used for various applications across several end-user verticals. One primary consumer-facing application is a conversational system as a personal assistant. It helps consumers accomplish various tasks; for instance, Apple's Siri offers an intuitive interface for connected homes or cars.
  • An organization can simplify and reimagine business processes through conversational software platforms and reduce and automate business workflows through context-aware intelligence systems. These platforms enable users and systems to have meaningful interactions and work in tandem to meet business objectives.
  • Furthermore, integrating artificial intelligence (AI) capabilities with conversational systems provides significant opportunities for growth in the global conversational systems market. Various factors, such as a lack of understanding of developing technologies and these systems' dependency on deployment platforms, are projected to hinder market expansion. Additionally, a lack of accuracy in virtual assistants and chatbots is expected to limit the market growth.
  • However, the COVID-19 pandemic boosted the conversational systems market. The growing need for clarification significantly increased consumer calls, imposing further strain on contact centers. As a result, the use of conversational solutions in contact centers is projected to accelerate. These tools enable users to obtain information via voice or text-based engagement platforms, resulting in increased usage of these novel communication channels during the coronavirus epidemic.

Conversational Systems Market Trends

Rising Usage of AI-based Solutions for Customer Services Drives the Market Growth

  • Artificial intelligence (AI)-powered customer support services assist organizations in increasing loyalty, online customer experience, preventive assistance, brand reputation, and even revenue growth. Natural language processing (NLP) and dialog-exchanging tool advances will drive market growth.
  • Various contact centers are emphasizing conversational systems because they enable contact centers to AI automate speech-enabled apps and messages for interactions between computers and humans. Additionally, these systems understand client intent in various languages and reply to their inquiries accordingly. Many people throughout the globe use AI-based solutions like messaging platforms and speech-based assistants to connect with businesses. As a result, AI speech-based, and messaging platforms are quickly supplanting traditional mobile and web apps as the new interactive medium for interactions.
  • The increase can be attributed to a surge in demand for AI powered customer support services. In view of the fact that, by providing users with a much required facility to complete their usual tasks, automation services are expected to increase significantly over the forecast period.
  •  Businesses benefit from the proactive customer support services provided by AI that help improve various aspects, such as loyalty, online customer experience, service assistance, brand reputation and even revenue generation. The market growth is anticipated to be stimulated by growing advances in natural language processing, which includesNLP and dialogexchanging tools. As a result, the uptake of NLP tools is forecast to increase and thus lead to growth opportunities on the market due to increased use of Web services and cloud based applications.
Conversational Systems Market: Amount of Artificial Intelligence (AI) Companies in Major Economies Worldwide in 2023, in Number

Asia Pacific is Expected to be the Fastest Growing Market

  • The primary driver for the growth of the Asia-Pacific geographic segment is the significant presence of technology providers and the increasing usage of advanced technology-enabled bot solutions across major industries. These players in the region are focusing on developing innovative solutions to stay in the competitive market landscape.
  • The region is witnessing rapid industrialization, raising the need for chatbots in the market under consideration. The growing retail and e-commerce sector in emerging economies, including China, India, Indonesia, Vietnam, Malaysia, the Philippines, Taiwan, and Thailand, has accelerated the high demand for and widespread adoption of chatbots by retailers and e-commerce business owners.
  • The Asian-Pacific conversational systems market during the COVID-19 pandemic experienced steady growth. Due to increased COVID-19-infected patients in the region and the lockdown announced by the government of significant economies in the area, the deployments of chatbots by various organizations to handle the patients' queries related to their medication and consultation with doctors online from a remote location increased.
  • Owing to the increased technological need, the region is witnessing the emergence of medium and large enterprises to help provide a better customer experience. In June 2022, Tanla, one of the global CPaaS suppliers, and, one of the world's largest enterprise conversational AI software platform and solutions firms, announced an agreement in four Asian countries India, Indonesia, Vietnam, the Philippines, and UAE. This collaboration represents a significant step forward in providing enterprises and brands with the ability to improve the digital experiences of their key stakeholder's customers, partners, and employees, using a advanced conversational artificial intelligence (AI) based natural language processing (NLP) system.
Conversational Systems Market - Growth Rate by Region

Conversational Systems Industry Overview

The conversational systems market is highly fragmented with the presence of major players like IBM Corporation, Microsoft Corporation, Google LLC (Alphabet Inc.), Amazon Web Services, Inc., and Nuance Communications Inc. Players in the market are adopting strategies such as partnerships and acquisitions to enhance their offerings and gain sustainable competitive advantage.

In July 2023, IBM watsonx is available to help meet enterprises' AI for business needs, Watsonx allows clients and partners to specialize and deploy models for various enterprise use cases or build their own. To date, the platform has been shaped by more than 150 users across industries – from telco to banking participating in the beta and tech preview program

In December 2022, TTEC Holdings, Inc., one of the largest global customer experience (CX) technology and services innovators for end-to-end digital CX solutions, announced that VoiceFoundry, a TTEC Digital company, has earned the Amazon Web Services (AWS) Conversational Artificial Intelligence (AI) Competency. This award highlights VoiceFoundry's competence in creating high-quality, high-performance chatbots, virtual assistants, and interactive voice response (IVR) systems.

In October 2022, IBM expanded its embeddable AI software portfolio by releasing three new libraries designed to let IBM Ecosystem partners, customers, and developers build and market their AI-powered products more easily, rapidly, and cost-effectively. The AI libraries, now generally available, were developed in IBM Research and were designed to provide independent software vendors (ISVs) across industries with an easily scalable way to build natural language processing, speech-to-text, and text-to-speech capabilities into applications across any hybrid, multi-cloud environment.

Conversational Systems Market Leaders

  1. IBM Corporation

  2. Microsoft Corporation

  3. Google LLC (Alphabet Inc.)

  4. Amazon Web Services, Inc.

  5. Nuance Communications Inc.

*Disclaimer: Major Players sorted in no particular order

Conversational Systems Market Concentration
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Conversational Systems Market News

  • March 2023: Google LLC (Alphabet Inc.) has announced Plans to integrate artificial intelligence into health related initiatives, including an update on the use of language generation technology in medical examinations and AI assisted research, ways to help consumers find information more quickly through Internet searching and tools to help developers build healthcare apps throughout the world.
  • November 2022: Moveworks, a pioneer in corporate conversational AI, partnered with Wipro Ltd, a renowned technology services and consulting firm. Due to the partnership's collaborative solutions, customers may turn their IT departments from cost centers to strategic assets. These collaborative solutions offer a scalable, cost-effective IT solution that enhances operational efficiency and employee happiness.
  • May 2022: DRUID, a global leader in conversational artificial intelligence (AI) technology for enterprise productivity, and BARQ Systems, one of the leading regional IT services providers serving business and government clients in the Middle East and Africa (MEA), announced a partnership to accelerate digital transformation and RPA implementations in the region. The combination of the two organizations' team expertise, strengths, and portfolios would provide measurable value to businesses in the public sector, enterprise, finance, insurance, health industry, and services.

Conversational Systems Market Report - Table of Contents


    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study




    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.2.1 Threat of New Entrants

      2. 4.2.2 Bargaining Power of Buyers/Consumers

      3. 4.2.3 Bargaining Power of Suppliers

      4. 4.2.4 Threat of Substitute Products

      5. 4.2.5 Intensity of Competitive Rivalry

    3. 4.3 Impact of COVID-19 on the Market


    1. 5.1 Market Drivers

      1. 5.1.1 Rising Usage of AI-based Solutions for Customer Services

    2. 5.2 Market Challenges

      1. 5.2.1 Accuracy Problems Related to Conversational Platforms


    1. 6.1 By Modality Type

      1. 6.1.1 Uni-Modal

      2. 6.1.2 Multi-Modal

    2. 6.2 By Type

      1. 6.2.1 Voice Assisted

      2. 6.2.2 Text Assisted

      3. 6.2.3 Other Types

    3. 6.3 By Deployment

      1. 6.3.1 On-Premise

      2. 6.3.2 Cloud

    4. 6.4 By Enterprise Size

      1. 6.4.1 Small & Medium Enterprises

      2. 6.4.2 Large Enterprises

    5. 6.5 By End-user Verticals

      1. 6.5.1 IT & Telecommunication

      2. 6.5.2 BFSI

      3. 6.5.3 Government

      4. 6.5.4 Retail

      5. 6.5.5 Energy & Power

      6. 6.5.6 Other End-User Verticals (Educational Institutions, Travel & Tourism, Transportation & Logistics)

    6. 6.6 By Geography

      1. 6.6.1 North America

      2. 6.6.2 Europe

      3. 6.6.3 Asia Pacific

      4. 6.6.4 Latin America

      5. 6.6.5 Middle East and Africa


    1. 7.1 Company Profiles*

      1. 7.1.1 IBM Corporation

      2. 7.1.2 Microsoft Corporation

      3. 7.1.3 Google LLC (Alphabet Inc.)

      4. 7.1.4 Amazon Web Services, Inc.

      5. 7.1.5 Nuance Communications Inc.

      6. 7.1.6, Inc.

      7. 7.1.7 Oracle Corporation

      8. 7.1.8 SAP SE

      9. 7.1.9

      10. 7.1.10 Inbenta Technologies Inc.



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Conversational Systems Industry Segmentation

A conventional system is a technology that processes and converts simple bidirectional text and conversation into meaningful output. Traditional systems are sophisticated instruments equipped with sensors, IoT systems, and appliances. These systems use enhanced methods of communication, such as sight, sound, and tactile, to communicate across a digital device network.

The conversational systems market is segmented by modality type (uni-modal and multi-modal), by type (voice assisted and text assisted), by deployment (on-premise, cloud), by enterprise size (small & medium enterprises, large enterprises), by end-user verticals (IT & telecommunication, BFSI, government, retail, energy & power, and other end-users), and geography (North America, Europe, Asia Pacific, Latin America, and Middle East and Africa).The market sizes and forecasts are provided in terms of value in (USD) for all the above segments.

By Modality Type
By Type
Voice Assisted
Text Assisted
Other Types
By Deployment
By Enterprise Size
Small & Medium Enterprises
Large Enterprises
By End-user Verticals
IT & Telecommunication
Energy & Power
Other End-User Verticals (Educational Institutions, Travel & Tourism, Transportation & Logistics)
By Geography
North America
Asia Pacific
Latin America
Middle East and Africa
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Conversational Systems Market Research FAQs

The Conversational Systems Market size is expected to reach USD 53.13 billion in 2024 and grow at a CAGR of 21.06% to reach USD 20.43 billion by 2029.

In 2024, the Conversational Systems Market size is expected to reach USD 53.13 billion.

IBM Corporation, Microsoft Corporation, Google LLC (Alphabet Inc.), Amazon Web Services, Inc. and Nuance Communications Inc. are the major companies operating in the Conversational Systems Market.

Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).

In 2024, the North America accounts for the largest market share in Conversational Systems Market.

In 2023, the Conversational Systems Market size was estimated at USD 43.89 billion. The report covers the Conversational Systems Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Conversational Systems Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.

Conversational Systems Industry Report

Statistics for the 2024 Conversational Systems market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Conversational Systems analysis includes a market forecast outlook 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.

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Conversational Systems Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)