• According to a new IDC projection, worldwide AI spending, including software, hardware, and services for AI-centric systems, is expected to exceed $300 billion by 2026.
• Also, the global market value of artificial intelligence solutions will surpass $450 billion in 2022 and climb further over the next five years.
• The whole worldwide AI spending was controlled by AI software in four areas: AI application delivery and deployment, AI applications, AI system infrastructure software, and AI platforms.
• According to IDC, the AI applications industry is still very competitive, with over 300 firms in the sector.
• The AI hardware industry is the smallest but fastest-growing segment of the AI business.

A new IDC estimate predicts the worldwide market value of artificial intelligence solutions will approach $450 billion in 2022 and will continue to rise over the next five years.

Worldwide AI spending will continue to increase

According to IDC’s Worldwide Semiannual Artificial Intelligence Tracker, global revenues for AI software, hardware, and services will reach $383.3 billion in 2021, representing a 20.7% increase over 2020.

Worldwide AI spending, including software, hardware, and services for AI-centric systems, is expected to exceed $300 billion by 2026. The continued adoption of AI into a wide range of goods will produce a compound annual growth rate (CAGR) of 26.5% from 2022 to 2026. This is more than four times the global IT spending CAGR of 6.3% during the same five-year period.

AI software in four areas dominated the total AI market: AI application delivery and deployment, AI applications, AI system infrastructure software, and AI platforms. In 2021, the market value of these categories will exceed $340 billion, with AI applications accounting for roughly half of the total. AI platforms grew at a 36.6% year-on-year pace.

According to IDC, the AI applications market remains extremely competitive, with around 300 players competing in the field. Customer relationship management apps (CRM) and AI enterprise resource management applications (ERM) were the category’s top players, accounting for around 16% of the total.

AI-centric applications, as defined by IDC as applications in which AI technologies are core and important to their function, accounted for 12.9% of the market in 2021, representing a 29.3% growth year on year. The remaining market share was held by AI non-centric apps, or those in which AI technologies are fundamental to particular application workflows but would still operate if those technologies were removed.

Cloud-deployed AI software is growing steadily, and IDC projects that by 2022, cloud deployment of newly acquired AI software will outnumber on-premises deployments. According to data, 47.3% of AI software purchases were deployed to the public cloud, representing a four percentage point rise over 2020 and an 8.4 percentage point increase over 2019.

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Another growing industry is the AI services market, which increased in total value by 22.4% yearly. According to IDC, the AI IT services sector climbed 21.9% yearly to $18.8 billion due to customer demand for production-grade AI solutions. Furthermore, the rising demand for AI governance, business process, and personnel strategy solutions raised the AI business services sector by 24.2% yearly worldwide AI spending.

AI hardware is the smallest but fastest expanding part of the AI market. IDC attributes the $18.8 billion in AI hardware growth to attempts to construct specialized AI systems capable of handling AI models and datasets’ rising computation and storage demands. AI servers and storage increased by 39.1% and 32.9% in worldwide AI spending, respectively, with server acquisitions totaling $15.6 billion.

Artificial intelligence as the cornerstone of emerging technologies

Rasmus Andsbjerg, associate vice president of Data & Analytics at IDC, said, “Across all industries and functions, end-user organizations are discovering the benefits of AI technologies, as increasingly powerful AI solutions are enabling better decision-making and higher productivity. The reality is AI offers solutions to everything we are facing at the moment. AI can be a source for fast-tracking digital transformation journeys, enable cost savings in times of staggering inflation rates, and support automation efforts in times of labor shortages.”

The International Data Corporation (IDC) has revealed in its 2014 Western Europe Enterprise Mobility Survey that Western Europe is relentlessly increasing its utilization of big data, despite the scarcity of an accomplished workforce and growing data security concerns.

“Western European organisations are catching up rapidly with their north American peers in terms of analytical maturity despite later adoption,” the study points out.

The late adoption of technology, smaller European datasets, and recent EU regulations, such as the right to be forgotten, have all contributed to Western Europe’s lag.

According to the study, enterprises are alarmed with the controversial new law, that “goes to the very heart of a company’s ability to mine even anonymised data”, and would also “negatively impact the value of collecting certain data if a company is not allowed to use it via big-data tools for business purposes,” reports Silicon Angle.

However, predictions for western Europe’s Big Data technology and services market are that it will expand from $2.3 billion in 2013 to $2.9 billion by the end of this year, managing $6.8 billion in 2018, exhibiting a ‘compound annual growth rate of 24.6 percent between now and 2018.’

The study divvies up Europe’s Big Data market into four parts, namely, networking software, servers, storage and services. Storage holds a major fraction of the market at $536m in 2013, followed by servers on $314m.

Individual western European countries show compound annual growth rates between 22.3 percent and 32.2 percent, where the existing extent of analytics use, macroeconomics, and the presence of larger organisations guide the rate of adoption.

“The UK, Benelux and Nordics tend to show higher initial adoption, though Germany and France are catching up rapidly, while southern Europe still lags behind,” the study says.

IDC also points out a shift of focus on buying services by Hadoop-inclined investments. Smaller, independent vendors will be pushing the use of big data to newer horizons with a lot of demand stemming from the public sector with primary usage in cutting costs and efficient processes.

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In a report recently published by IDC, it was suggested that cloud technologies are significantly disrupting infrastructure sales in EMEA, with estimates that $3.4 billion was spent on hardware going to cloud environments during 2013 (marking a 21% increase compared to 2012).

“Along with big data, social, and mobility, cloud represents one of the four pillars of IDC’s 3rd Platform vision — a new paradigm of IT usage that is revolutionizing the way technology is adopted in commercial and consumer environments,” said Giorgio Nebuloni, research manager at IDC.

“The rise of cloud has triggered a revolution in the hardware market. While white-box and few large OEMs fight to absorb the surge in demand for public cloud, most incumbent hardware players invest heavily in offerings enabling on-premises and hosted private cloud environments, such as integrated systems, high-end networks, and high-performance storage.”

Indeed, IDC’s forecasts on cloud infrastructure sales in 2014 are expected to see further growth, with the research house suggesting it could exceed $4 billion by the end of 2014 that spending will increase 19 percent annually. The main business drivers for cloud, IDC says, are related to scalability, agile mobile application support, and lower totally cost of ownership.

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(Big Data) Hadoop Market Expected to Grow 25x by 2020:

According to a report by Allied Market Research, the global market for Hadoop along with related hardware, software and services is expected to grow at a Compound Annual Growth Rate (CAGR) of 58.2 percent between 2013 and 2020. In 2013, the global Hadoop market accounted for approximately $2 billion in revenues and is estimated to increase by $48.2 billion over the next 7 years. Moreover, Asia-Pacific is forecasted to emerge over the next seven years, “with a compound annual growth for the region pegged at 52.9 percent.”

(Read the report here: Allied Market Research)

(Business Intelligence) Global BI Market Set to Reach $20.81 billion by 2018:

Redwood Capital released a report in April forecasting the global business intelligence market by 2018. The report claims that the global BI market is expected to reach $20.81 billion by 2018, up by $13.98 billion in 2013, translating to a Compound Annual Growth Rate of 8.28%

Of all the regions, North America is forecasted to capture nearly half of the global BI market (49%), and according to IDC, SAP was the leader in BI software market in 2012 (with 19.7% share). IBM (14.0%) and SAS (10.3%) came in next when it market share. Among the fastest growing segments in BI – which include Traditional, Mobile, Cloud and Social Business Intelligence – “Cloud based BI is estimated to grow nearly four-fold from $0.75 billion in 2013 to $2.94 billion by 2018, for a CAGR of 31%”.

(You can download the report for free here: Sector Report on Business Intelligence)

(Analytics) Advanced and Predictive Analytics (APA) Market Forecasted to reach $3.4 Billion by 2018:

The IDC released a report showing that APA software market will grow from $2.2 billion in 2013 to $3.4 billion, representing a CAGR of 9.9%. It was said in a recent Forbes article that the top three vendors in 2013 based on worldwide revenue were SAS ($768.3 million, 35.4% market share), IBM ($370.3 million, 17.1% market share) and Microsoft (64.9 million, 3% market share).

Alys Woodward, research director, Worldwide Advanced and Predictive Analytics, and European Big Data and Business Analytics, in IDC’s Software Research practice commented on the report:

“A wide range of APA solutions from vendors — from traditional modeling platforms through high-volume and high-velocity parallelized architectures to advanced analytical applications that output predictive results to end users — combine with the hype around Big Data and lead business users and technology buyers alike to consider how advanced and predictive analytics can help drive insights and business value from data.”

(Read the report here: IDC)

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In a recent study by IDC, Brazil and Mexico are said to be the biggest markets for sales of big data solutions. The study predicts that both countries will drive growth in Latin America through to 2016.

Analysts at IDC estimate that revenue generated from big data – hardware, software and services – will grow from US$551 million in 2013 to US$6.59 billion by 2018, a compound annual growth rate of 64% for 2013-2018.

Furthermore, the study estimates that 40 percent of Latin American firms make “moderate or high usage of analysis over structured and unstructured data sources,” although it was noted that the majority of this percentage is attributed to Brazil and Mexico. By 2017, however, Latin America will see a shift in growth rate; IDC expects Chile, Peru and Colombia to exceed the growth rate of Mexico and Brazil.

Some notable findings were found in the region in terms of big data budgets. Only 9% of the budget goes towards innovation, while nearly half is dedicated to operations. With this being said, “data exploration, analysis and management tools are the fastest growing category of software sales in Latin America, followed by CRM applications, storage solutions and middleware.”

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IDC Financial Insights released a report recently, “Best Practices: IDC Maturity Model Benchmark – Big Data and Analytics”, which aims to help financial institutions monitor their level of maturity in big data and analytics (BDA) against market and industry benchmarks. The report was created for institutions to use the IDC benchmarks to define short- and long-term goals and plan for improvement; prioritize BDA technology, staffing and other related investment decisions; and uncover “maturity gaps.”

“In-market adoption of big data and analytics has reached the point where the capabilities and applications these technologies enable are becoming main stream for a growing number of financial services firms,” said Michael Versace, research director, IDC Financial Insights. “Yet many do not yet have a set of completely mature BDA competencies across the five critical dimensions that are necessary to effectively reduce execution risks and compete with strong business, technology, and operational value propositions.”

The key insights drawn from the report are:

–       The majority of financial firms (67%) show a “repeatable” level of BDA maturity overall, the third level of IDC Financial Insights’ five-level BDA maturity model. 12% of financial services firms fall one maturity level below and another 21% are one maturity level above the majority.

–       Institutions investing in their BDA competencies report a positive correlation between BDA maturity and the successful outcomes of BDA initiatives. On average, higher levels of BDA maturity lead to better chances of generating value and achieving expected or greater-than-expected benefits.

The report presents benchmark data on the maturity of BDA capabilities of North American commercial, retail and investment banks; identifies the key capabilities that distinguish institutions whose BDA efforts have met or exceeded their overall expectations from their competitors whose BDA efforts have fallen short; and offers guidance for achieving BDA success.

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According to Technology Business Review Inc., big data analytics are driving sharp growth for public cloud computing vendors. The report suggests that the top 50 public cloud providers experienced a 47% increase in their combined revenues in the fourth quarter last year, bringing the total to $6.2 billion.

In particular, vendors across the IaaS and SaaS markets are using big data to drive their operations. “Public cloud vendors,” wrote TBR senior cloud analyst Jillian Mirandi, “can leverage usage statistics such as seats deployed, data stored, modules used, how frequent usage is, and how people are accessing the tools, i.e mobile vs desktop.”

The report on TBR has been backed by various other sources also. According to research conducted by IDC, the cloud was a “$47 billion annual industry last year” and is estimated to grow to $107 billion annual industry by 2017.

Within the SaaS arena, companies like Salesforce and Box are using big data analytics to track how customers are engaging with their product, while on the IaaS side, vendors like Amazon Web Services and Microsoft are building their big data platforms so that customers can use them on demand. The news of these events point towards the continued maturity of the “public cloud market from a business and sales perspective.”

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