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Thursday, October 27, 2016

How Cognitive Computing will Transform Every Industry

Historically, computers had to be told what to do -- programmed by software developers -- before they could complete an assigned task. Now, computers will begin to learn how to perform various tasks that are based upon experience -- similar to the development of human cognitive skills attainment.

However, unlike humans, these intelligent computing systems will retain and recall everything that they learn. That said, imagine the possibilities of every human worker having access to an informed assistant that will always be prepared to offer useful information and guidance. That's the essence of a cognitive computing era.

It's forecast that the adoption of cognitive systems and artificial intelligence (AI) technologies across all industries will drive worldwide revenues from nearly $8.0 billion in 2016 to more than $47 billion in 2020.

Cognitive and AI Solutions Market Development

According to the latest worldwide market study by International Data Corporation (IDC), the market for cognitive or AI solutions will experience a compound annual growth rate (CAGR) of 55.1 percent between 2016 and 2020.

"Software developers and end user organizations have already begun the process of embedding and deploying cognitive or artificial intelligence into almost every kind of enterprise application or process," said David Schubmehl, research director at IDC.

According to the IDC assessment, identifying, understanding, and acting on the best applications, use cases and growth opportunities for these systems will be a strategic business imperative for the savvy CEO. Clearly, there's compelling motivation. The digital disruption caused by these technologies will be significant.

The ability to recognize and respond to data flows enables these systems to automate a broad range of functions. The applications with the most investment in 2016 are automated customer service agents, quality management investigation and recommendation systems, diagnosis and treatment systems, and fraud analysis and investigation.

The use cases with the anticipated fastest revenue growth over the next five years are public safety and emergency response, pharmaceutical research and discovery, diagnosis and treatment systems, supply and logistics, quality management investigation and recommendation systems, and fleet management.

IDC says the industries that will invest the most in cognitive in 2016 are banking and retail, followed by healthcare and discrete manufacturing. Combined, these four industries will generate more than half of all worldwide 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 percent and 61.4 percent, respectively. Education and process manufacturing will also experience significant growth over the forecast period.

Outlook for Cognitive Apps Market Growth

Nearly half of all cognitive or AI revenue throughout the forecast will go to software, which includes both cognitive applications and cognitive software platforms, which facilitate the development of intelligent, advisory, and cognitively enabled solutions.

IDC believes that cognitive applications development spending is forecast to reach $18.2 billion in 2020. Professional services -- i.e. business strategy and IT consulting -- represent the second largest revenue category. Meanwhile, hardware revenues will grow with five-year CAGRs of more than 60 percent.

Furthermore, IDC predicts that North America is already the largest region for these solutions, with 2016 revenues approaching $6.2 billion. Europe, the Middle East and Africa (EMEA) will remain the second largest region throughout the forecast. However, revenues from the Asia-Pacific region (including Japan) will nearly reach the same growth rate with EMEA by 2020.