Cognitive computing: A diverse and fast-growing market
The worldwide market for cognitive and AI systems reached $24 billion in 2018, according to IDC, which was an increase of more than 50% over 2017. The market is predicted to grow to over $77 billion by 2022, an increase of 36% per year from 2017 to 2022, representing a tripling in expenditures during that time period. The U.S. market is expected to account for the largest market share (about 60%) over this time period, followed by Western Europe and China.
The retail and banking industries are at the forefront, accounting for more than $4 billion each in 2018. In retail, the primary applications are automated customer service agents, and expert shopping advisors/product recommendations. In banking, applications focus on threat intelligence and prevention and fraud analysis and investigation, as well as program advisors and recommendation systems. Other major industry sectors utilizing cognitive and AI systems include manufacturing and healthcare. Among the fastest-growing sectors will be federal and central government agencies, with a growth rate of over 40% per year.
Looking at the data from an application viewpoint, the largest one is automated customer service agents, accounting for nearly $3 billion in 2018. The most rapidly growing use cases are expected to be pharmaceutical research and discovery, and expert shopping advisors and product recommendations are each predicted to grow at 47% per year for the next 5 years.
Cognitive/AI software, which includes cognitive applications and cognitive platforms, will account for about 40% of spending over 5 years, growing at 43% per year. Conversational AI applications such as personal assistants and chatbots are expected to be a primary area of focus, along with deep learning and machine learning applications. The remainder of the cognitive/AI expenditures are for hardware for the systems, and services. Hardware is the larger category at the moment, but IT and business services spending is expected to overtake that category toward the end of the forecast period.