Analyst firm IDC has identified cognitive computing as one of six ?Innovation Accelerators? that will drive digital transformation by opening new revenue streams, creating information-based organizations, and changing the way work is performed.
In the new Worldwide Semiannual Cognitive Systems Spending Guide, IDC forecasts global spending on cognitive systems will reach nearly $31.3 billion in 2019 with a five-year compound annual growth rate (CAGR) of 55%.
The new spending guide expands on IDC’s previous cognitive software forecasts by including expenditures for cognitive-related hardware and services. The spending guide also provides greater detail on spending for cognitive systems by geography, industry, and use case.
More than 40% of all cognitive systems spending throughout the forecast will go to software, which includes both cognitive applications (i.e., text and rich media analytics, tagging, searching, machine learning, categorization, clustering, hypothesis generation, question answering, visualization, filtering, alerting, and navigation) and cognitive software platforms, which facilitate the development of intelligent, advisory, and cognitively enabled solutions.
As both the largest and fastest-growing category of cognitive systems, cognitive applications spending is forecast to approach $13.4 billion in 2019.
Cognitive-related services (business services and IT consulting) represent the second largest spending category while hardware spending (primarily on servers and storage) will grow nearly as fast as software spending.
“Unstructured and semi-structured data is fueling a renaissance in the handling and analysis of information, resulting in a new generation of tools and capabilities that promise to offer intelligent assistance, advice, and recommendations to consumers and knowledge workers around the world,” said David Schubmehl, research director for cognitive systems and content analytics at IDC.
“These cognitively enabled solutions are being developed and implemented on cognitive software platforms that offer the tools and capabilities to extract and build knowledge bases and knowledge graphs from unstructured and semi-structured information as well as provide predictions, recommendations, and intelligent assistance through the use of machine learning, artificial intelligence, and deep learning. The markets for these cognitively enabled applications and cognitive software platforms is just beginning, and IDC expects spending to accelerate throughout the forecast period.”
Banking is the vertical industry that spends the most on cognitive systems with nearly a 20% share of the worldwide total throughout the forecast.
Leading uses of cognitive systems in banking include fraud analysis and investigation, automated threat intelligence and prevention, and program advisors and recommendations.
Retail and healthcare are the second and third largest industries with combined spending on cognitive systems forecast to reach over $10 billion in 2019.
The leading use cases in retail are automated customer service agents and merchandising for omni-channel operations while the leading use case in healthcare is diagnosis and treatment systems.
“The potential use cases for cognitive systems are as wide, varied, and rich as the imagination. Automated threat intelligence, for instance, is helping organizations connect the dots between pieces of information to improve security, while in healthcare, cognitive systems are improving the quality of people’s lives by assisting in diagnosis and treatment at the individual patient level,” said Jessica Goepfert, program director for customer insights and analysis at IDC.
“Wherever cognitive systems are in play, workers and organizations can expect to be impacted by the power of more information, intelligence, and automation.”
On a geographic basis, North America (the United States and Canada) is by far the largest region for cognitive systems spending with almost 80% of the worldwide total throughout the forecast.
Europe, the Middle East and Africa (EMEA) is currently the second largest region, but IDC forecasts that cognitive systems spending in Asia-Pacific including Japan will overtake EMEA by the end of the forecast.