The data-driven business era is creating demand for new products and services. Worldwide revenues for big data and business analytics (BDA) will grow from $130.1 billion in 2016 to more than $203 billion in 2020, according to the latest market study by International Data Corporation (IDC).
This market is forecast to grow 11.3 percent in 2016 after revenues reached $122 billion worldwide in 2015, and is forecast to continue at a compound annual growth rate (CAGR) of 11.7 percent through 2020.
"The availability of data, a new generation of technology, and a cultural shift toward data-driven decision making continue to drive demand for big data and analytics technology and services," said Dan Vesset, group vice president at IDC.
Big Data Analytics Market Development
The primary industries driving this growth include banking, discrete manufacturing, process manufacturing, federal government, and professional services. Together, they will account for nearly 50 percent of worldwide big data and business analytics investments in 2016 and will remain the top five industries through 2020.
In addition to being the industry with the largest investment in big data and business analytics solutions -- reaching nearly $17.0 billion in 2016 -- banking will see the fastest spending growth.
Telecommunications, utilities, insurance, and transportation will join banking as the leading industries with the largest CAGRs over the five-year forecast period.
However, these industries will not be alone. Sixteen of the eighteen industries covered in IDC market study will experience double-digit CAGRs from 2015-2020.
Moreover, respondents from organizations in these industries are placing a high priority on BDA initiatives over other technology investments. Within the banking sector, many of these efforts are focused on risk management, fraud prevention and compliance related activities.
Market Outlook for Big Data Analytics
Large and very large companies (those with more than 500 employees) will be the primary driver of the big data and business analytics opportunity, generating revenues of more than $154 billion in 2020.
Technology investments will be led by IT and business services, which together will account for more than half of all big data and business analytics revenue for most of the forecast period. Services-related spending will also experience the strongest growth, with a five-year CAGR of 14.9 percent.
Software investments will grow to more than $60 billion in 2020, led by purchases of End-User Query, Reporting and Analysis Tools and Data Warehouse Management Tools. Hardware investments will grow at a CAGR of 8.7 percent, reaching $29.9 billion in 2020.
From a geographic perspective, more than half of all big data and business analytics revenues will come from the United States. By 2020, IDC forecasts that the U.S. market for big data and business analytics solutions will reach more than $95 billion.