IDC sees widespread adoption of cognitive systems and Artificial Intelligence (AI) across a broad range of industries will drive worldwide revenues from nearly $8.0 billion in 2016 to more than $47 billion in 2020. According to a new Worldwide Semiannual Cognitive/Artificial Intelligence Systems Spending Guide from International Data Corporation (IDC), the market for cognitive/AI solutions will experience a compound annual growth rate (CAGR) of 55.1% over the 2016-2020 forecast period.
"Near-term opportunities for cognitive systems are in industries such as banking, securities and investments, and manufacturing," said Jessica Goepfert, program director, Customer Insights and Analysis at IDC. "In these segments, we find a wealth of unstructured data, a desire to harness insights from this information, and an openness to innovative technologies. Furthermore, the value proposition of cognitive systems aligns well with industry executives' chief priorities. For instance, cognitive technologies are being used in the banking industry to detect and combat fraud – consistently a top industry pain point.
Meanwhile, in manufacturing, executives cite improving product quality as a top initiative. In this case, cognitive systems recognize and know how to respond to dynamic fluctuations in product specs by adapting the production to stay within quality targets."
The industries that will invest the most in cognitive/AI systems in 2016 are banking and retail, followed by healthcare and discrete manufacturing. Combined, these four industries will generate more than half of all worldwide cognitive/AI revenues in 2016, with banking and retail each delivering nearly $1.5 billion. Healthcare and discrete manufacturing will deliver the greatest revenue growth over the 2016-2020 forecast period, with CAGRs of 69.3% and 61.4%, respectively. Education and process manufacturing will also experience significant growth over the forecast period.
Nearly half of all cognitive/AI revenue throughout the forecast will go to software, which includes both cognitive applications (i.e., text and rich media analytics, tagging, searching, machine learning, categorization, clustering, hypothesis generation, question answering, visualization, filtering, alerting, and navigation) and cognitive software platforms, which facilitate the development of intelligent, advisory, and cognitively enabled solutions. As both the largest and fastest-growing category, cognitive applications spending is forecast to reach $18.2 billion in 2020. Cognitive/AI-related services (business services and IT consulting) represent the second largest revenue category while hardware revenues (primarily from dedicated purchases of servers and storage) will grow nearly as fast as software with five-year CAGRs of more than 60%.
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1. Natural Language Generation: Producing text from computer data. Currently used in customer service, report generation, and summarizing business intelligence insights. Sample vendors: Attivio, Automated Insights, Cambridge Semantics, Digital Reasoning, Lucidworks, Narrative Science, SAS, Yseop.
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