Now there's an effective approach to making sense of all the unstructured 'big data' that many organizations have captured and stored, but have yet to interpret and apply in a meaningful way. Cognitive systems and cloud-based object storage technologies are going to transform the analysis of very large data sets. It's a very significant breakthrough.
International Data Corporation (IDC) has identified cognitive computing as one of six 'innovation accelerators' that will drive digital business transformation by opening new revenue streams, creating information-based organizations, and changing the way work is performed in a variety of key industries.
IDC has forecast that global spending on cognitive systems will reach nearly $31.3 billion in 2019 with a five year compound annual growth rate (CAGR) of 55 percent. The latest projections expand on IDC's previous cognitive software forecasts by including expenditures for cognitive-related hardware and services.
More than 40 percent of all cognitive systems spending will go to software, which includes cognitive applications -- such as text and rich media analytics, tagging, searching, machine learning, categorization, clustering, hypothesis generation, question answering, visualization, filtering, alerting, and navigation -- plus, cognitive software platforms, which facilitate the development of intelligent, advisory, and cognitively enabled solutions.
IT Tools for Unstructured Big Data Analysis
As both the largest and fastest-growing category of cognitive systems, cognitive software applications spending is forecast to approach $13.4 billion in 2019. Cognitive-related services (business services and IT consulting) represent the second largest spending category, while hardware spending -- primarily on computing servers and object storage -- will grow nearly as fast as software spending.
"Unstructured and semi-structured data is fueling a renaissance in the handling and analysis of information, resulting in a new generation of tools and capabilities that promise to offer intelligent assistance, advice, and recommendations to consumers and knowledge workers around the world," said David Schubmehl, research director at IDC.
IDC analysts believe that solutions are being developed and implemented on cognitive software platforms that offer the tools and capabilities to extract and build knowledge bases and knowledge graphs from unstructured and semi-structured information -- as well as provide predictions, recommendations, and intelligent assistance through the use of machine learning, artificial intelligence, and deep learning.
The markets for these cognitively enabled applications and cognitive software platforms is just beginning, and IDC expects spending to accelerate throughout the forecast period.
Cognitive Systems Application Market Development
Banking will be the vertical industry that spends the most on cognitive systems, with nearly a 20 percent share of the worldwide total throughout the forecast period. Leading uses of cognitive systems in banking include fraud analysis and investigation, automated threat intelligence and prevention, and program advisory or recommendations.
Retail and healthcare are the second and third largest vertical industries with combined spending on cognitive systems forecast to reach over $10 billion in 2019. The leading use cases in retail are automated customer service agents and merchandising for omni-channel operations while the leading use case in healthcare is diagnosis and treatment systems.
The potential use cases for cognitive systems are as wide and varied. Automated threat intelligence, for instance, is helping organizations interpret threat detection information to improve security, while in healthcare, cognitive systems are improving the quality of people's lives by assisting in diagnosis and treatment at the individual patient level.
On a geographic basis, North America is by far the largest region for cognitive systems spending, with almost 80 percent of the worldwide total throughout the forecast. Europe, the Middle East and Africa (EMEA) is currently the second largest region. However, IDC forecasts that cognitive systems spending in Asia-Pacific including Japan will overtake EMEA by the end of the forecast period.