More CIOs and CTOs are exploring the commercial value of intelligent systems that can enhance their organization's performance. Global business value from artificial intelligence (AI) is forecast to total $1.2 trillion in 2018 -- that's an increase of 70 percent from 2017, according to the latest market study by Gartner.
Moreover, AI-derived business value is forecast to reach $3.9 trillion in 2022. According to the Gartner assessment, there are three different sources of AI business value:
AI Technology Market Development
"AI promises to be the most disruptive class of technologies during the next 10 years due to advances in computational power, volume, velocity and variety of data, as well as advances in deep neural networks (DNNs)," said John-David Lovelock, research vice president at Gartner.
Gartner analysts believe niche solutions that address one specific use-case very well will be a key adoption strategy for new AI-enhanced products and services acquired by the leading enterprises.
AI business value growth shows the typical S-shaped curve pattern associated with an emerging technology. In 2018, the growth rate is estimated to be 70 percent, but it will slow down through 2022. After 2020, the curve will flatten, resulting in somewhat low growth over time.
In 2021, driving new digital revenue streams will become the dominant application, as companies uncover business value in using AI to increase sales of existing products and services, as well as to discover opportunities for new products and services.
Breaking out the global business value derived by AI type, decision support or augmentation (such as DNNs) will represent 36 percent of the global AI-derived business value in 2018. By 2022, these apps will have surpassed all other types of AI initiatives to account for 44 percent of global AI-derived business value.
"DNNs allow organizations to perform data mining and pattern recognition across huge datasets not otherwise readily quantified or classified, creating tools that classify complex inputs that then feed traditional programming systems. This enables algorithms for decision support or augmentation to work directly with information that formerly required a human classifier," said Mr. Lovelock.
'Virtual agents' allow corporate organizations to reduce human labor costs as they take over simple requests and tasks from a call center, help desk and other service 'human agents', while handing over the more complex questions to their human counterparts.
Virtual agents will account for 46 percent of the global AI-derived business value in 2018, and 26 percent by 2022, as other AI types mature and contribute to business value.
Outlook for Emerging AI Applications Growth
As unstructured data growth accelerates in the corporate world, utilizing decision automation will bring significant new business value to organizations. For now, decision automation accounts for just 2 percent of the global AI-derived business value in 2018, but it will grow to 16 percent by 2022.
Furthermore, smart products account for 18 percent of global AI-derived business value in 2018, but will likely shrink to 14 percent by 2022 as other DNN-based system types mature and overtake smart products in their contribution to business value.
Moreover, AI-derived business value is forecast to reach $3.9 trillion in 2022. According to the Gartner assessment, there are three different sources of AI business value:
- Customer experience: The positive or negative effects on indirect cost. Customer experience is a necessary precondition for widespread adoption of AI technology to both unlock its full potential and enable value.
- New revenue: Increasing sales of existing products and services, and/or creating new product or service opportunity beyond the existing situation.
- Cost reduction: Reduced costs incurred in producing and delivering those new or existing products and services.
AI Technology Market Development
"AI promises to be the most disruptive class of technologies during the next 10 years due to advances in computational power, volume, velocity and variety of data, as well as advances in deep neural networks (DNNs)," said John-David Lovelock, research vice president at Gartner.
Gartner analysts believe niche solutions that address one specific use-case very well will be a key adoption strategy for new AI-enhanced products and services acquired by the leading enterprises.
AI business value growth shows the typical S-shaped curve pattern associated with an emerging technology. In 2018, the growth rate is estimated to be 70 percent, but it will slow down through 2022. After 2020, the curve will flatten, resulting in somewhat low growth over time.
In 2021, driving new digital revenue streams will become the dominant application, as companies uncover business value in using AI to increase sales of existing products and services, as well as to discover opportunities for new products and services.
Breaking out the global business value derived by AI type, decision support or augmentation (such as DNNs) will represent 36 percent of the global AI-derived business value in 2018. By 2022, these apps will have surpassed all other types of AI initiatives to account for 44 percent of global AI-derived business value.
"DNNs allow organizations to perform data mining and pattern recognition across huge datasets not otherwise readily quantified or classified, creating tools that classify complex inputs that then feed traditional programming systems. This enables algorithms for decision support or augmentation to work directly with information that formerly required a human classifier," said Mr. Lovelock.
'Virtual agents' allow corporate organizations to reduce human labor costs as they take over simple requests and tasks from a call center, help desk and other service 'human agents', while handing over the more complex questions to their human counterparts.
Virtual agents will account for 46 percent of the global AI-derived business value in 2018, and 26 percent by 2022, as other AI types mature and contribute to business value.
Outlook for Emerging AI Applications Growth
As unstructured data growth accelerates in the corporate world, utilizing decision automation will bring significant new business value to organizations. For now, decision automation accounts for just 2 percent of the global AI-derived business value in 2018, but it will grow to 16 percent by 2022.
Furthermore, smart products account for 18 percent of global AI-derived business value in 2018, but will likely shrink to 14 percent by 2022 as other DNN-based system types mature and overtake smart products in their contribution to business value.