How new use cases for artificial intelligence are driving demand – with telecoms at the heart of it

There's been a significant increase in enterprise investment on technologies that analyse, organise, access, and provide advisory services that are based on use cases for unstructured data. In fact, worldwide spending on cognitive and artificial intelligence (AI) systems will reach $19.1 billion in 2018 - that's an increase of 54.2 percent over the amount spent in 2017.

With industries investing aggressively in projects that utilise cognitive and AI software capabilities, International Data Corporation (IDC) now forecasts cognitive and AI spending will grow to $52.2 billion in 2021 and achieve a compound annual growth rate (CAGR) of 46.2 percent over the 2016-2021 forecast period.

Cognitive systems and AI market development

"Interest and awareness of AI is at a fever pitch. Every industry and every organisation should be evaluating AI to see how it will affect their business processes and go-to-market efficiencies," said David Schubmehl, research director at IDC.

IDC has estimated that by 2019, 40 percent of digital transformation initiatives will use AI services and by 2021, 75 percent of enterprise applications will use AI. From predictions, recommendations, and advice to automated customer service agents and intelligent process automation, AI is changing the face of how we interact with computer systems.

Retail will overtake banking in 2018 to become the industry leader in terms of cognitive and AI spending. Retail firms will invest $3.4 billion this year on a range of AI use cases, including automated customer service agents, expert shopping advisors and product recommendations, and merchandising for omni-channel operations.

Much of the $3.3 billion spent by the banking industry will go toward automated threat intelligence and prevention systems, fraud analysis and investigation, and program advisors and recommendation systems.

Discrete manufacturing will be the third largest industry for AI spending with $2 billion going toward a range of use cases including automated preventative maintenance and quality management investigation and recommendation systems. The fourth largest industry, healthcare providers, will allocate most of its $1.7 billion investment to diagnosis and treatment systems.

The cognitive and AI use cases that will see the largest spending totals in 2018 are: automated customer service agents ($2.4 billion) with significant investments from the retail and telecommunications industries; automated threat intelligence and prevention systems ($1.5 billion) with the banking, utilities, and telecommunications industries as the leading industries; and sales process recommendation and automation ($1.45 billion) spending led by the retail and media industries.

Three other use cases will be close behind in terms of global spending in 2018: automated preventive maintenance; diagnosis and treatment systems; and fraud analysis and investigation. The use cases that will see the fastest spending growth over the 2016-2021 forecast period are: public safety and emergency response (75.4 percent CAGR), pharmaceutical research and discovery (70.5 percent CAGR), and expert shopping advisors and product recommendations (67.3 percent CAGR).

A little more than half of all cognitive and AI spending throughout the forecast will go toward cognitive software. The largest software category is cognitive applications, which includes cognitively-enabled process and industry applications that automatically learn, discover, and make recommendations or predictions.

The other software category is cognitive platforms, which facilitate the development of intelligent, advisory, and cognitively enabled applications. Industries will also invest in IT services to help with the development and implementation of their cognitive or AI systems and business services -- such as consulting and horizontal business process outsourcing related to these systems.

According to the IDC assessment, the smallest category of IT spending will be the hardware (servers and storage) needed to support these systems.

Outlook for cognitive and AI market growth

On a geographic basis, the United States will deliver more than three quarters of all spending on cognitive and AI systems in 2018, led by the retail and banking industries. Western Europe will be the second largest region in 2018 - led by retail, discrete manufacturing and banking.

The strongest spending growth over the five-year forecast will be in Japan (73.5 percent CAGR) and Asia-Pacific (excluding Japan and China) (72.9 percent CAGR). China will also experience strong spending growth throughout the forecast (68.2 percent CAGR).

https://www.iottechexpo.com/northamerica/wp-content/uploads/2018/09/all-events-dark-text.png Interested in hearing industry leaders discuss subjects like this and sharing their use-cases? Attend the co-located IoT Tech Expo, Blockchain Expo, AI & Big Data Expo and Cyber Security & Cloud Expo World Series with upcoming events in Silicon Valley, London and Amsterdam and explore the future of enterprise technology.

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