Industrial and Commercial Robotics Upside Investment

Some technology sector M&A activity is relatively immune to market disruptions. The robotics industry received significant investment in 2019, reaching $46 billion. A total of $17.8 billion went to acquisitions and a further $29 billion went into investments, according to the latest worldwide market study by ABI Research.

Most of the funding was focused on autonomous passenger vehicles (APV’s), surgical robotics, and warehouse automation, with significant new growth for field robotics and drone services.

Robotics Technology Market Development

"Despite not having commercialized their technology, autonomous passenger vehicle developers like Waymo, Cruise, Zoox and company have continued to amass enormous funding from the corporate and VC world," said Rian Whitton, senior analyst at ABI Research.

Surgical robots also received significant new funding, and have already been commercialized to a considerable extent, with Intuitive Surgical selling over 5,000 Da Vinci robot systems to date.

The localization of funds to a few specific sectors is related to the anticipated effect of the technology and the relative market power of major auto manufacturers such as Toyota, health companies such as Johnson & Johnson and E-retailers such as Amazon.

According to the ABI Research assessment, the United States and China account for 89 percent of all investment value, in terms of companies located in their various technology clusters. Other countries with considerable investment in robotics included Canada, Israel, Japan, and the United Kingdom.

Aside from venture capitalists, a few major corporations have taken a significant interest in artificial intelligence and related automation technologies, including Amazon with their investment in vision-based navigation developer Canvas Technology.

Meanwhile, Softbank made a considerable investment in a variety of robot companies -- including robotics service provider CloudMinds, hospitality robot developer Bear Robotics, and fulfillment automation company Berkshire Grey.

FLIR, the thermal camera manufacturer, also invested heavily in drones and ground robots to shore up its solutions for security and industrial inspection. Among their acquisitions include Aerodyne Group and Endeavour Robotics, formerly part of iRobot.

"Major corporations understand that, while the robotics industry isn’t a short-term proposition, it will be the source of considerable productivity growth that will be necessary to compete in the future," said Whitton.

Outlook for Robotics Technology Investment Growth

Markets with an easy route to commercialization, such as surgical robots and warehouse automation, could benefit from the current COVID-19 pandemic crisis. Also, the autonomous passenger vehicle market could be adversely affected due to lack of business-readiness, though this has not prevented big investments in APV developers like Pony AI and Waymo in the first quarter of 2020.

"Prior to the pandemic’s massive impact became clear, 2020 was already shaping up to be a strong year for robotics investment, with autonomous forklift and tow tractor developers Seegrid and Vecna already receiving funding," Whitton concludes.

Exploring the Enterprise Blockchain Multiverse of Apps

The internet continues to fuel the Global Networked Economy as more innovators develop and deploy their digital business offerings. Global trade will be enhanced by trusted online entities that ensure their peer-to-peer network transactions are secure and verifiable.

Frost & Sullivan has completed a worldwide market study of a blockchain-enabled world, laying out a long-range view of potential industry impacts as IT vendors race to build the foundations of the next-generation internet.

Blockchain Applications Market Development

"Existing IT systems are not fit-for-purpose when it comes to addressing the most pressing systemic problems of our time. Enterprises are being forced to adapt to complex structural change as the technology industry undergoes a paradigm shift that undermines long-held assumptions," said Maya Cotton, industry analyst at Frost & Sullivan.

According to their assessment, all organizations and institutions will be challenged to keep track of the moving pieces and identify the ecosystem levers to push that will ensure their near-term sustainability and long-term relevance.

Standard models of platform use and digital business service use are giving way to strategic blockchain projects and collaborations among unique sets of industry ecosystem players that pursue distributed ledger applications.

In summary, enterprise blockchain solutions have reached a minimum viable product (MVP). Technical barriers are falling fast in the building of a new 'network of networks'. Hot spots of development are now making visible the shape of things to come and the leaders who are likely to dominate this emerging market.

It's currently being led by transitions in global financial and monetary systems where blockchain capabilities enable trust and digital connective tissue. That said, all industry verticals will eventually be impacted to some degree.

Blockchain application growth opportunities include:

Global trade: Multiple process rails within the international trade ecosystem are migrating to blockchain-enabled networks and applications. Within eCommerce trade, the challenge to supply chains posed by COVID-19 arrives at a time when they were already being retooled to capture 50x-100x gains in efficiency, creating a timely synergy.

Cryptocurrencies, digital finance and the global monetary system: Dominant players in these systems, including the world’s largest financial institutions and central banks, are expected to roll out cryptocurrency strategies in the near term. The foundations of a global blockchain network are already in place while new services are being reimagined and developed.

Healthcare: This ecosystem represents some of the highest-complexity and highest-reward opportunities. The coronavirus stress-test has laid bare the many cracks in these traditional healthcare systems that need to be filled.

Social impact ecosystems to make a better-interconnected world: In the blockchain multiverse, developing markets and social enterprises are attracting attention as blockchain is used to provide solutions to problems in ways that were not possible before.

Outlook for Blockchain Use Case Development

To date, the commercial applications of blockchain technologies have been limited to the few forward-looking organizations that championed the early-adopter mindset. Many of the initial applications focused on improving transactions within established industries, such as the diamond and other precious gems sector.

Looking to the future, more industries that have previously been impacted by fraudulent activity will choose to adopt blockchain solutions. Demand for distributed ledger technologies will continue to thrive and grow as more organizations explore new use cases and pilot new projects.

However, given the recent history, it appears that enterprise blockchain market development progress will evolve slowly.

The Evolution of Commercial Voice Assistant Applications

Voice-enabled user interfaces have reached mainstream adoption. The value chain for voice assistants is rapidly expanding to include emerging applications. Device vendors, system integrators, software app developers and cloud providers will offer solutions for a growing list of voice assistant use cases.

Juniper Research estimates that voice assistants will be in use on over 4 billion devices by the end of 2020. The mass adoption of artificial intelligence, and chatbots in particular, is fueling the rapid shift towards voice-activated services.

Voice Assistant Market Development

Internet of Things (IoT) devices and more practical applications are enabling voice assistants to deliver tangible value. Microphones are everywhere and access to voice assistants has become ubiquitous, with more technology companies eager to monetize this trend.

Voice communication isn't the only method of interaction with artificial intelligence (AI) software. For example, Google Assistant also supports text-based interaction with the device user, as well as voice interaction.

According to the latest worldwide market study by Juniper Research, people will interact with voice assistants on over 8.4 billion devices by 2024 -- overtaking the world’s population and growing by 113 percent. Despite this growth, the monetization of the voice assistants remains a challenge.

The new study found that automotive voice assistants and those connected to TV sets will have the highest rate of growth, largely due to the ability to use voice assistants through peripherals, rather than new devices.

However, this use case depends on changing consumer behavior -- it's estimated that less than half of TVs capable of voice assistant functions will actually use the capability to interact with the device.

"Ingrained habits of how devices are used will restrict opportunities for voice assistants and voice commerce," said James Moar, lead analyst at Juniper Research. "Vendors should focus on driving usage almost as much as promoting device sales."

Even with the growing proliferation of different voice assistant enabled devices, Juniper Research expects that smartphones will continue their dominance of this technology space. Other devices will be comparatively underused in many markets.

Despite having more than double the population of North America, the number of voice assistant devices in Europe will only exceed North America by 2022, and then only marginally, due to fewer devices being launched into those markets.

Outlook for Commercial Voice Assistant Applications

Juniper analysts believe that while several voice assistant vendors are pivoting towards productivity applications and enterprise usage, this will likely be a relatively small market. As an example, less than 354 million PCs will have active voice assistants.

Juniper Research recommends voice assistant vendors and service providers that target the PC market should emphasize voice interaction as part of a wider ecosystem of device and data management, with more automation use cases.

I believe enterprise developers will design voice and visual experiences for smart devices such as mobile phones, speakers, and displays. They'll also build end-to-end conversational experiences with Dialogflow, Google's natural language platform which incorporates AI machine learning expertise.

Digital Darwinism: How the Trailblazers Gain Momentum

When we look back throughout history, market disruptions to the status quo create challenges for the many unprepared executives and opportunities for the few leaders that are able to envision a new environment that's free from the limitations of the past.

The Information Technology (IT) sector is essential to digital transformation within the enterprise. That said, we're about to witness the growing distinction between the visionary leaders and organizations, versus those that try to follow along and keep up with the trailblazers.

Ongoing IT Investment Strategies

Worldwide IT spending is projected to total $3.4 trillion in 2020 -- that's a decline of 8 percent from 2019, according to the latest global market study by Gartner.

The coronavirus pandemic economic effects are causing traditional CIOs to prioritize spending on technology and services that are deemed 'mission-critical' over initiatives aimed at growth or transformation. Few will have the foresight to see the upside potential during the recovery.

"CIOs have moved into emergency cost optimization which means that investments will be minimized and prioritized on operations that keep the business running, which will be the top priority for most organizations through 2020," said John-David Lovelock, vice president at Gartner.

According to the Gartner assessment, market recovery will not follow previous patterns as the forces behind this recession will create both supply-side and demand-side shocks as the public health, social and commercial restrictions begin to lessen.

All IT segments will experience a decline in 2020, with devices and data center systems experiencing the largest drops in spending.

However, as the COVID-19 pandemic continues to spur remote working, sub-segments such as public cloud services will be a bright spot in the forecast, growing 19 percent in 2020.

Gartner's analysts believe that cloud-based telephony and messaging and cloud-based conferencing will also see high levels of investment, growing 8.9 percent and 24.3 percent, respectively.

"In 2020, some longer-term cloud-based transformational projects may be put on hiatus, but the overall cloud spending levels Gartner was projecting for 2023 and 2024 will now be showing up as early as 2022," said Mr. Lovelock.

Outlook for Strategic IT Investment Leadership

Gartner says that IT spending recovery will be slow through 2020, with the hardest-hit industries -- such as entertainment, air transport and heavy industry -- taking over three years to come back to 2019 IT spending levels.

Gartner believes the eventual recovery requires a 'change in mindset' for most organizations. There's no miraculous outcome for the majority of short-sighted organizations. I believe that those who choose to cut-back excessively may become mortally wounded, unable to fully recover from their overreaction.

In contrast, the forward-thinking bold market leaders will benefit from the apparent decline of their less progressive peer group. Anticipating the need to adapt to market disruption and then embracing change is difficult for some, and impossible for many C-suites. The growing trend of Digital Darwinism is inevitable during the recovery.

How Digital Engineering Enables Resilient IT Decisions

Given the current economic environment, all business and technology decision-makers must come together in support of a cohesive strategy for ongoing information technology (IT) investment. In order to deliver custom digital products and services, resilient organizations will pivot from an 'operational mindset' to a more 'market-driven mindset'.

As IT and Operations Technology (OT) converge, companies will focus on using digital business capabilities to improve processes via better instrumentation, infrastructure, integration and insight.

To help organizations expand to the OT buyer and become resilient decision-makers, International Data Corporation (IDC) has published a new 'Future of Operations' (FoO) framework.

Digital Engineering Market Development

By 2025, intelligent enterprises will see a 100 percent increase in productivity, resulting in half the response time of peers due to the ability to anticipate market and operational changes and 25 percent increase in success rates of new digital product or service introductions.

IDC defines resilient decision making as having the ability to use all available data and information to rapidly and effectively make decisions that keep your operations aligned with customer expectations and demands.

Traditionally, operational data has been siloed by both technology and organization. Systems have typically been in place to pull critical financial and compliance information from operations by the IT organization.

And those same systems push down orders and demands as gathered by the IT systems. It is then up to the operation to have processes and systems in place to turn that flow into an executed business function.

"Digital Engineering is the piece that companies have been missing to become more resilient and to tightly align operations with their customers' needs," said Kevin Prouty, group vice president at IDC. "The convergence of IT and OT is the driving force behind digital engineering and the resiliency at its core."

To succeed with a market-driven mindset, IDC defines five key tenants:

• Evolve beyond continuous improvement, lean, and six sigma to resiliency and market focus.
• Embrace complexity in products, services, and markets while minimizing complications.
• Adapting to changing markets and demands while keeping the core operational purpose.
• Use digital capabilities to build a resilient organization and operation.
• Develop a converged IT and OT function into Digital Engineering.

Outlook for Digital Engineering Methodology Adoption

According to the IDC assessment, forward-thinking organizations will leverage the Future of Operations framework to structure and scope their future of operations initiatives. Key decision-makers will be able to define the technologies and related services essential to the new market-driven operational models.

Furthermore, technology suppliers and IT vendors can use the framework to ensure their solutions are meeting the demands of the enterprises that are and will be undergoing operations transformation efforts. In summary, there is no digital transformation without IT operations transformation.

Global Wireless Spectrum Policy Impacts Wi-Fi Innovation

Forward-thinking wireless communications policy is essential to every nation's plan to fully participate in the rapidly expanding Global Networked Economy. Faster, more reliable, more efficient, and more widespread Wi-Fi coverage is becoming increasingly vital to progress.

Wi-Fi-enabled devices will increase from 3.3 billion annual unit shipments in 2019 to more than 4.6 billion by 2024, a growth that underscores the need for a more robust Wi-Fi network, according to the latest worldwide market study by ABI Research.

While the growing reach of Wi-Fi will be driven by several advancements -- such as Wi-Fi 6 and Wi-Fi’s expansion into the 60 Gigahertz (GHz) and sub-1 GHz bands through WiGig and HaLow -- the most exciting change is the anticipated availability of 6 GHz spectrum over the next few years.

Wi-Fi Innovation Market Development

“It is hard to overstate the potential that 6 GHz and Wi-Fi 6E can bring to Wi-Fi networks,” says Andrew Zignani, principal analyst at ABI Research.

Currently, Wi-Fi faces several difficult challenges. Key among them is the growing demands being placed on Wi-Fi networks, leading to increased congestion, performance limitations, and reduced Quality of Service (QoS).

Most Wi-Fi devices are using increasing amounts of data per device, including streaming high-resolution music and videos, video calling, application and firmware updates, digital downloads, social networking, data-heavy web content, and online gaming, among others.

"The tremendous surge in active Wi-Fi devices at home in recent months and the resulting increase in traffic due to COVID-19 stay-at-home orders have reaffirmed Wi-Fi as a vital utility, acutely demonstrating both its importance and limitations," Zignani explains.

On April 23, 2020, the FCC voted to make additional spectrum in the 6 GHz band available for Wi-Fi, with other regions expected to follow suit in the not too distant future.

Once the global regulatory landscape for 6 GHz is finalized, the technology will bring about much higher throughput, much more capacity, greater reliability, lower latency, and better QoS than ever before.

Moreover, 6 GHz delivers much-needed additional wireless spectrum and higher throughputs. Wi-Fi 6E takes full advantage of what Wi-Fi 6 has to offer and can open new opportunities for Wi-Fi to better support 5G-class services reliant on high multi-gigabit throughput, low latency, high efficiency, broader coverage, and better mobility.

Outlook for Global Wi-Fi Regulation Advancement

There are still challenges ahead. "Perhaps the largest current barrier to 6GHz adoption is still the need to iron out various regulatory challenges and obstacles across different regions," Zignani points out.

Limited chipset availability, cost of supporting the technology, building out the 6 GHz ecosystem, and proximity to Wi-Fi 6 rollout are hurdles.

However, ABI Research anticipates that most of these challenges will be overcome and that opening the 6 GHz band for Wi-Fi will address many of the challenges it is facing today and in the next decade.

Global IoT Connections will Reach 83 Billion by 2024

The Internet of Things (IoT) has moved into the mainstream by virtue of the rapidly evolving key benefits across a variety of industries. Due to developments in radio technology and falling component costs, the Internet is now being used for machines to communicate with each other and/or directly with humans.

Juniper Research has identified private cellular wireless networks as a key driver of the growth of IoT adoption over the next five years. This trend has been slowly establishing itself as LTE networks can be leveraged to do so, offering a wireless data connection.

With the introduction of fifth-generation (5G) wireless networking technologies, Juniper Research now anticipates that the infrastructure deployment will serve to accelerate the adoption of private cellular networks over the next five years.

IoT Technology Market Development

According to the latest worldwide market study by Juniper Research, the total number of IoT connections will reach 83 billion by 2024 -- rising from approximately 35 billion connections in 2020.

This deployment represents a growth of 130 percent over the next 4 years. The study identified the industrial sector as a key driver of this growth. Juniper analysts forecast that this expansion will be driven by the increasing use of private networks that leverage cellular network standards.

Juniper found that the industrial sector -- including manufacturing, retail and agriculture -- will account for over 70 percent of all IoT connections by 2024.

They anticipated that the emergence of cost-efficient private cellular networks would be a key driver of growth over the next 4 years, and expects that the recent increase in demand for private LTE networks will carry forward to private 5G networks as the cost of the technology decreases over the next 2 years.

Moreover, analysts also forecast that the number of industrial IoT units in service will grow 180 percent over the next 4 years.

"Industrial networks will need to scale rapidly as industrial IoT users adopt new technologies to expand the services available on their networks. However, IoT platforms must ensure that the security processes can scale alongside this network growth," said Sam Barker, senior analyst at Juniper Research.

Outlook for IoT Applications Growth

According to the Juniper assessment, the increasing complexity of private IoT networks will mean that platforms must implement steps to maximize security in all layers of the IoT ecosystem, including devices, connectivity and the platform itself.

Therefore, IoT technology vendors must implement security procedures that are highly scalable and can cope as network architectures become increasingly complex.

Juniper analysts have suggested two key areas of focus; the use of network segmentation to mitigate the risks of lateral movement cybersecurity attacks, and ensuring that the lifecycle management of network assets is properly maintained.

Healthcare Executives Adopt Artificial Intelligence Apps

More informed healthcare executives will apply artificial intelligence (AI) strategies to leverage this new technology in five core areas that improve decision making during the current pandemic, according to the latest worldwide market study by Gartner.

"In the fight against COVID-19, AI offers an important arsenal of weapons," said Erick Brethenoux, research vice president at Gartner. "It allows predictions to be made about the spread of the virus, helps diagnose cases more quickly and accurately, measures the effectiveness of countermeasures to slow the spread, and optimizes emergency resources, to name a few."

Early Detection and Epidemic Analysis

AI techniques are used to understand, analyze and predict how and where the virus is spreading or slowing down.

Automated contact tracing, for example, is used to build detailed social interaction graphs by analyzing a myriad of citizen data such as mobile phone locations and public facial recognition and backtracking the movement of people to identify the likely virus source. Individuals who encountered the source can then be notified, tested or quarantined.

"Other AI applications that fall within this area include epidemic forecasting and monitoring the development of herd immunity. Such capabilities are obviously highly relevant in the short term as society tries to ‘flatten the curve’ and minimize the burden on our healthcare systems, but they are also important in the long term if new, hopefully smaller, outbreaks reoccur," said Mr. Brethenoux.

Containment

Considering the huge societal and economic impact of ‘one-size-fits-all’ measures such as lockdowns, collaboration with non-IT experts is paramount when applying AI to containment efforts.

"Behavior analytics derives new insights by accounting for the dynamics of human behavior, culture and individual thinking to answer questions around social distancing compliance or the emergence of unwanted group behaviors," said Pieter den Hamer, senior research director at Gartner.

Law enforcement can predict where and when people may not adhere to stay-at-home orders or social distancing through predictive enforcement and dispatch enforcement units accordingly.

Triage and Diagnosis

The use of AI-enabled self-triage has already gained popularity as telehealth practices, including virtual health assistants, were made available to help people identify if they are possibly infected and what the appropriate next steps are. Augmented medical diagnosis and triage are also key AI capabilities that help in this area.

"AI is known to improve the accuracy of certain diagnoses if augmented with human judgment, especially in more complex cases," said Mr. den Hamer. "Prognostic modeling, or predicting how the disease will likely develop in patients, can also be used to improve treatment recommendations."

The fact that AI has a role to play in assessing patient risk and prognosis is not something to overlook, especially when there is a possible shortage of medical professionals.

Healthcare Operations

AI plays an important role in streamlining healthcare operations and optimizing scarce hospital resources during a pandemic. Healthcare CIOs and CDOs can use predictive staffing to improve personnel allocation by analyzing anticipated patient numbers and their individual prognosis, and cross-referencing them with the availability of qualified medical staff, materials and equipment.

"Remote patient monitoring and alerting with the use of AI also allows patients to stay at home, lowers the burden on hospitals, and enables a better understanding of how symptoms develop over time," said Mr. den Hamer.

Vaccine Research & Development (R&D)

AI graphs and natural language processing (NLP) can enable medical researchers to scour through many thousands of relevant reports to draw connections between data at an unprecedented pace. Augmented vaccine R&D also identifies coronavirus countermeasures including those that have already been tested on humans.

"Healthcare CIOs and CDOs should explore every avenue of AI to fight COVID-19 using an ongoing and systematic process of AI application identification and prioritization," concluded Mr. den Hamer.

Gartner believes technologists shouldn't overestimate their ability to understand what makes sense from a public health and medical perspective. They should work with healthcare professionals to create and actively advertise an open marketplace that shares AI applications, models and data transparently.

Cloud IT Infrastructure Revenue will Reach $100.1 Billion

Total spending on IT infrastructure for cloud computing environments -- including public and private cloud -- recovered in the fourth quarter of 2019 (4Q19) after two consecutive quarters of decline, according to the latest worldwide market study by International Data Corporation (IDC).

The 12.4 percent year-over-year growth in 4Q19 yielded $19.4 billion in spending. The results also brought the full year into positive territory with annual growth of 2.1 percent and total spending of $66.8 billion for 2019.

Meanwhile, the overall IT infrastructure market results were mixed after a strong performance in 2018, up 3.3 percent to $38.1 billion in 4Q19 but declining 1.1 percent to $134.4 billion for the full year. In contrast, non-cloud IT infrastructure fell 4.6 percent to $18.7 billion for the quarter and declined 4.1 percent to $67.7 billion for the year.

Cloud IT Infrastructure Market Development

In 4Q19, growth in spending on cloud IT infrastructure was driven by the public cloud segment, which grew 14.5 percent year over year to $13.3 billion; private cloud grew 8.2 percent to $6.1 billion.

As the overall segment is generally trending up, it tends to be more volatile at the quarterly level as a significant part of the public cloud IT segment is represented by a few hyperscale service providers. After a weaker middle part of the year, public cloud ended 2019 barely up 0.1 percent to $45.2 billion. Private cloud grew in 2019 by 6.6 percent to $21.6 billion.

As investments in cloud IT infrastructure continue to increase, with some swings up and down in the quarterly intervals, the IT infrastructure industry is approaching the point where spending on cloud IT infrastructure consistently surpasses spending on non-cloud IT infrastructure.

The fourth quarter of 2019 marked the third consecutive quarter of cloud IT leadership with the annual share just slightly below the midpoint (49.7 percent). From here on out, IDC expects cloud IT infrastructure will stay above 50 percent of the IT Infrastructure market at both the quarterly and annual levels, reaching 60.5 percent annually in 2024.

Across the three IT infrastructure technology domains, storage platforms saw the fastest year-over-year growth in 4Q19 at 15.1 percent with spending reaching $6.6 billion. Compute platforms grew 14.5 percent year over year with $10.8 billion in spending while Ethernet switches declined 3.9 percent to $2 billion.

For the full year 2019, Ethernet switches led with year-over-year growth of 5 percent and $8.2 billion in spending, followed by storage platforms with 1.9 percent growth and spending of $23.1 billion, and compute platforms with growth of 1.5 percent and spending of $35.5 billion.

IDC's forecast for 2020, after taking into consideration the repercussions of the COVID-19 pandemic and its ensuing economic crisis, is for $69.2 billion in cloud IT infrastructure spending, a 3.6 percent predicted annual increase over 2019. Non-cloud IT infrastructure spending is expected to decline by 9.2 percent to $61.4 billion in 2020.

Together, overall IT infrastructure spending is expected to decline 2.9 percent to 130.6 billion.

"While the beginning of 2020 was marked by supply chain issues that should be resolved before the end of the second quarter, the negative economic impact will hit enterprise customers' CAPEX spending," said Kuba Stolarski, research director at IDC.

Outlook for Cloud IT Infrastructure Investment

IDC's new five-year forecast predicts cloud IT infrastructure spending will reach $100.1 billion in 2024 with a compound annual growth rate (CAGR) of 8.4 percent.

Non-cloud IT infrastructure spending will decline slightly to $65.3 billion with a -0.7 percent CAGR. Total IT infrastructure is forecast to grow at a 4.2 percent CAGR and produce $165.4 billion in spending in 2024.

The overall market outlook is subject to change, based upon macroeconomic shifts across the globe due to the pandemic. That said, there are cloud vendors and service providers that are better positioned to enable end-user organizations to achieve their digital transformation agenda. Therefore, new growth is unlikely to be evenly distributed across the IT infrastructure sector.

Pandemic Creates Huge Demand for Artificial Intelligence

Especially in times of crisis, technology can be the catalyst for much-needed change. The vendors that enable the Global Networked Economy have become essential to all forward-looking leaders that seek innovation as a tool to uncover new solutions to significant challenges.

Medical-related industries have discovered their New Normal. The Coronavirus outbreak has proven that healthcare institutions can no longer ignore the role of Artificial Intelligence (AI) in their daily workflow. And, cognitive systems are essential components of their solutions to the current crisis.

AI systems infrastructure spending in the healthcare and pharmaceutical industries is expected to increase from $463 million in 2019 to more than $2 billion over the next 5 years, according to the latest worldwide market study by ABI Research.

Medical AI Apps Market Development

"Artificial Intelligence is playing a key role in responding to the pandemic," said Lian Jye Su, principal analyst at ABI Research.

Several companies, including Alibaba, YITU, Graphen, and Google DeepMind, are already developing AI tools to help detect the virus, diagnose its evolution, track its geographical footprint, project its future, and even predict its potential protein structure to find a vaccine for it.

Aside from viral detection, AI will be adopted in the field of bioinformatics, where the Ribonucleic Acid (RNA) sequence of COVID-19 can be thoroughly analyzed to develop the right antiviral drugs.

"Now, no single drug can combat the virus effectively. In order to get ahead of the ever-evolving virus and to save as many lives as possible, new drug discovery, development, and testing processes need to be set up, as the conventional method is no longer suitable," Su explains.

Tools from established companies like Google DeepMind, startups like Graphen, and AI chipsets from vendors like NVIDIA and Intel will help accelerate the speed of drug discovery, development, and testing, allowing pharmaceutical companies and healthcare authorities to combat the pandemic.

Pharmaceutical companies and healthcare authorities will take lessons from the current chaotic situation, and anticipate universal programs and frameworks to better manage pandemic situations, predict the emergence and the spread of viruses, and, most importantly, find a cure for them in a timely fashion.

The situation will encourage healthcare agencies, pharmaceutical vendors, and webscale companies to enhance their Research and Development (R&D) investments in AI as a core technology for enabling these initiatives.

Outlook for Drug Development via AI Applications

ABI Research determined that global research and development (R&D) expenditures for the pharmaceutical industry are estimated to be between $180 billion and $195 billion in 2022.

Moreover, AI spending in the healthcare and pharmaceutical industries is expected to increase rapidly as more developed nations seek lasting solutions to the growing economic impacts of the ongoing COVID-19 pandemic crisis.

According to the assessment by ABI, the upside potential is huge. "The pharmaceutical industry is a significant market that AI hardware and software vendors should target," Su advises.