The cognitive computing market size was valued at over USD 8.00 billion in 2015 and is anticipated to gain traction over the forecast period. The rise in the penetration of Artificial Intelligence and integrated cloud platform is expected to bolster the growth of cognitive computing solution.
The increase in concern among all the major business organizations to analyze a large volume of data to estimate the risk associated with any strategic initiative is further instrumental in accelerating the industry growth. The necessity for industries, such as healthcare, retail, and financial institutions, to analyze large volumes of data optimally on a real-time basis, is presumed to impact the industry favorably. Technological proliferation is leading to the adoption of innovative techniques, such as machine learning and automated reasoning, in dispensing systems.
Cognitive computing is a technology platform based on the scientific premises of signal processing and artificial intelligence. Natural Language Processing (NLP) is the most prominent technology utilized owing to its inherent capacity to process natural language interactions. The extended usage of automated reasoning, big data, and machine learning technology, along with artificial intelligence and probabilistic logic, has paved the way for a greater development of data science. The evolution of Internet of Things (IoT) has also accelerated the growth momentum of the cognitive computing market with its diverse applications in the development of the interactive software platform.
However, the data analytics industry is vulnerable to the constant rising cyber security threats. International Cyber Security Protection Alliance (ICSPA) facilitates channel funding, expertise, and assistance directly to restore law enforcement against cybercrime in both domestic and international markets.
The industry is further segregated into seven reportable segments with respect to applications, which include healthcare, IT & telecommunication, banking, financial services, and insurance (BFSI), security, retail, aerospace & defense, and others. The adoption of cognitive computing solution is phenomenal in the BFSI domain. The BFSI application segment was valued at over USD 1.5 billion in 2014 and is presumed to grow at a CAGR of over 20% from 2016 to 2025. The adoption of cognitive solution entails effective and efficient data analytics capabilities customized to the requirement of the business organization.
The healthcare segment is also expected to exhibit a decent growth at a CAGR of over 19.20% over the forecast period. Cognitive solutions enable medical practitioners to emphasize on patient treatment by reducing the requisite paperwork.
The industry is segregated with respect to its deployment capabilities into two reportable segments: on-premises and cloud. The cloud segment was valued over USD 5.50 billion in 2015 and is anticipated to grow at a CAGR of 20.2% over the forecast period. The recent development of data storage facilities, such as integrated cloud storage facilities, and the evolvement of customized cloud solution, such as private and public cloud, have strengthened market growth.
Major players are investing significant resources in building on-premises storage solutions, which facilitate the traditional file and block storage platforms. The market for on-premise storage is anticipated to exhibit a significant growth at a CAGR of 19.16% over the forecast period.
The North American region dominated the market with over 40% revenue share in 2015. This growth is attributed to the rapid adoption of integrated cloud platform and the emergence of new business models. Favorable mandates in countries such as the U.S. and Canada, promoting the importance of data security, are accelerating the deployment of these systems in the region. Asia Pacific is expected to emerge as the fastest-growing region over the next nine years.
Prominent players dominating the market include Google, IBM, Microsoft Corporation, Oracle Corporation, SAP, Statistical Analysis System (SAS), Saffron Technology, Cognitive Scale, Numenta, Palantir, Tibco Software, and Vicarious.
Industry players are increasingly focusing on adopting the Artificial Technology (AI) platform by acquiring relatively smaller industry participants and other ecosystem players. For instance, in November 2016, IBM acquired the Expert Personal Shopper (XPS) division of Fluid, an innovator in digital customer experiences, to promote Watson to develop an indigenous customized interface for the retail industry.