Skip to main content

Cognitive and AI Systems Revenue will Reach $57.6B

What if the employees in your organization had access to intelligent automation that augmented their own skills and abilities? What if the routine processes and repetitive tasks could be executed by a trained computing system? Given that scenario, how might your organization improve employee productivity and enhance their job satisfaction?

That's the promise of cognitive and artificial intelligence (AI) technology. It's becoming a new reality, as numerous organizations across the globe start to embrace these trained computing systems.

Cognitive and AI Market Development

Worldwide spending on cognitive and AI systems is forecast to reach $57.6 billion in 2021, according to the latest global market study by International Data Corporation (IDC).

With many industries investing in cognitive and AI solutions, spending is expected to achieve a compound annual growth rate (CAGR) of 50.1 percent over the 2016-2021 forecast period.

Worldwide spending on cognitive and AI systems will total $12.0 billion in 2017, an increase of 59.1 percent over 2016.

"Cognitive and artificial intelligence solutions continue to proliferate across all industries resulting in significant growth opportunities," said Marianne Daquila, research manager at IDC. "Some of the use cases are very industry specific, such as diagnosis and treatment in healthcare, and in others they are common across multiple industries such as automated customer service agents."

The retail and banking industries are forecast to spend the most on cognitive and AI systems in 2017 with investments of $1.74 billion and $1.72 billion, respectively. The discrete manufacturing, healthcare, and process manufacturing industries are also forecast to spend more than $1 billion each this year.

These five industries will continue to be the industries with the largest spending amounts throughout the five-year forecast and, by 2021, their combined investments will represent nearly 55 percent of all worldwide spending.

In addition to spending the most on cognitive and AI systems, retail will also deliver the fastest spending growth with a 2016-2021 CAGR of 58.8 percent. Six other industries will see CAGRs greater than 50 percent over the forecast period.

Overall, the cognitive and AI use cases that will see the largest amount of spending in 2017 will be automated customer service agents ($1.5 billion) and diagnostic and treatment systems ($1.1 billion). These will remain the largest use cases in terms of spending throughout the forecast period.

Meanwhile, the fifth largest use case in 2017 – intelligent processing automation – will see enough investment growth over the forecast period to become the third largest use case in 2021. Moreover, automated preventative maintenance will see its spending levels fall from third largest in 2017 to fifth largest in 2021, despite a CAGR of 40.1 percent.

The use cases that will see the fastest spending growth over the 2016-2021 forecast are expert shopping advisors and product recommendations (96.6 percent CAGR), public safety and emergency response (96.2 percent CAGR), and intelligent processing automation (69.9 percent CAGR).

Outlook for Hardware, Software & Services

About half of all spending on cognitive and AI technology will go to software -- including cognitive applications and cognitive platforms -- over the course of the forecast period. Although software spending growth is expected to slow somewhat after 2019, services spending will experience steady growth throughout the forecast, achieving a five-year CAGR of 53.7 percent.

In contrast, cognitive and AI computing hardware will be the smallest and slowest growing area of spending, despite a robust CAGR of 40.4 percent.

Popular posts from this blog

Digital Transformation Spending Reaches $1.8 Trillion

Ongoing investment in business technology will remain on track, despite concerns about the global economic outlook which continues to evolve in 2022. Enterprise CIOs and CTOs are focused on operational profitability and digital business growth goals that are enabled by strategic IT initiatives. Global spending on the Digital Transformation (DX) of business practices, products, and organizations is forecast to reach $1.8 trillion in 2022 -- that's an increase of 17.6 percent over 2021, according to the latest market study by International Data Corporation (IDC). Many anticipated DX investments will sustain this pace of growth throughout the 2021-2025 forecast period, with a five-year compound annual growth rate (CAGR) of 16.6 percent. Digital Transformation Global Market Development "IDC expects to see aggressive DX technology investment growth in 2022 following a minor slowdown during the pandemic period," said Craig Simpson, senior research manager at IDC . "As orga

Flexible Working: Why Company Culture Matters

The main reasons for the Great Resignation are obsolete leadership, fearful middle managers, and a toxic culture that hinders employee engagement. Perhaps that's why some organizations are still struggling with the consideration and development of a flexible working model.  They're incapable of evolving to a more enlightened approach to work where employees are treated with respect. They're stuck in a bygone era of the 20th-century industrial revolution where 'shareholder value' tops all other values, and where spreadsheets and financial data analysis drives all key decision making. We should not be surprised that 76 percent of human resource (HR) leaders now feel that hybrid work challenges an employee's connection to organizational culture, according to a recent survey by Gartner. A 2022 poll of HR leaders reveals the most challenging aspect of setting their hybrid strategy is adjusting the current organizational culture to support a hybrid workforce. In fact,

Energy Sector IoT Cybersecurity Gains Momentum

The electric distribution industry continues to invest in digital transformation projects. Advanced Metering Infrastructure (AMI) technology is becoming a driver for connected electricity meters, which will reach an installed base of 1.3 billion by 2027. AMI growth is prompting utilities and energy suppliers to revisit their IT infrastructure security and device management operations, according to the latest worldwide market study by ABI Research. Energy Infrastructure Security Market Development Digitization of traditional electricity grids and the modernization of the aging energy infrastructure is among the top concerns for utility operators and governments worldwide. Security for last-mile energy consumption applications was frequently overlooked. "However, the introduction of AMI, smart metering, and grid digitization is steadily increasing spending for secure management services, assisting implementers to transition to IT (information technologies) and OT (operational techno