Worldwide spending on Cognitive and AI to reach $12.5bn in 2017, says new IDC spending guide
A new update to the Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide from International Data Corporation (IDC) forecasts worldwide revenues for cognitive and artificial intelligence (AI) systems will reach $12.5 billion in 2017, an increase of 59.3% over 2016.
Global spending on cognitive and AI solutions will continue to see significant corporate investment over the next several years, achieving a compound annual growth rate (CAGR) of 54.4% through 2020 when revenues will be more than $46 billion.
“Intelligent applications based on cognitive computing, artificial intelligence, and deep learning are the next wave of technology transforming how consumers and enterprises work, learn, and play,” said David Schubmehl, research director, Cognitive Systems and Content Analytics at IDC.
“These applications are being developed and implemented on cognitive/AI software platforms that offer the tools and capabilities to provide predictions, recommendations, and intelligent assistance through the use of cognitive systems, machine learning, and artificial intelligence. Cognitive/AI systems are quickly becoming a key part of IT infrastructure and all enterprises need to understand and plan for the adoption and use of these technologies in their organisations.”
From a technology perspective, the largest area of spending in 2017 ($4.5 billion) will be cognitive applications, which includes cognitively-enabled process and industry applications that automatically learn, discover, and make recommendations or predictions.
Cognitive/AI software platforms, which provide the tools and technologies to analyse, organise, access, and provide advisory services based on a range of structured and unstructured information, will see investments of nearly $2.5 billion this year.
Spending on cognitive-related IT and business services will be more than $3.5 billion while dedicated server and storage purchase will total $1.9 billion. Each of these areas will experience strong growth throughout the forecast, led by cognitive applications with a five-year CAGR of 69.6%.
The cognitive/AI use cases that will see the greatest levels of investment this year are: Quality Management Investigation and Recommendation Systems; Diagnosis and Treatment Systems; Automated Customer Service Agents; Automated Threat Intelligence and Prevention Systems; and Fraud Analysis and Investigation.
Combined, these five use cases will deliver nearly half of all cognitive/AI systems spending in 2017. By the end of the forecast, slower spending on Diagnosis and Treatment Systems will drop it to the number 5 position. The use cases that will experience the fastest spending growth over the 2015-2020 forecast period are Public Safety and Emergency Response (85.5% CAGR) and Pharmaceutical Research and Discovery (74.2% CAGR).
“Double-digit spending growth is expected for cognitive and artificial intelligence systems across all industries but growth varies depending on how well particular use cases solve existing and future business priorities,” said Marianne Daquila, research manager, Customer Insights and Analysis at IDC.
“Heavily regulated markets such as banking and securities investment services are among the early growth drivers. Collectively, these two financial industries will represent a quarter of worldwide spending on cognitive/AI solutions. Stringent compliance requirements are key drivers for these industries as they seek new innovations in fraud and risk detection.
Additionally, companies in this sector are adopting cognitive-based program advisors and recommendations to better match products with clients. Elsewhere, manufacturing, retail, and healthcare are also expected to see very strong spending growth over the forecast period.”
On a geographic basis, the United States is by far the largest market for cognitive/AI spending with 2017 revenues totaling nearly $9.7 billion. Europe, the Middle East and Africa (EMEA) is currently the second largest region, but strong spending growth from Asia/Pacific (including a 107% CAGR in Japan) will move it ahead of EMEA by 2020.
The Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide sizes the market for technologies that analyse, organise, access, and provide advisory services based on a range of unstructured information. The spending guide quantifies the cognitive computing opportunity by providing data for more than 20 use cases across 16 industries in eight regions.
Data is also available for the related hardware, software, and services categories. Unlike any other research in the industry, the detailed segmentation and timely, global data is designed to help suppliers targeting the market to identify market opportunities and execute an effective strategy.
Comment on this article below or via Twitter: @IoTNow_ OR @jcIoTnow