More takers for cognitive and AI solutions this year
Most companies today, regardless of which industry they belong to, are working on developing or incorporating AI and cognitive solutions into their workflow – to make workflows more intelligent, improve efficiencies, and boost productivity.
Technology-research specialists IDC recently forecasted that worldwide spending on cognitive and AI systems will reach US$19.1 billion in 2018, an increase of 54.2 percent over the amount spent in 2017.
Further, cognitive and AI spending, according to IDC, will grow to US$52.2 billion in 2021 and achieve a compound annual growth rate (CAGR) of 46.2 percent over the 2016-2021 forecast period.
“Interest and awareness of AI is at a fever pitch. Every industry and every organization should be evaluating AI to see how it will affect their business processes and go-to-market efficiencies,” said David Schubmehl, Research Director, Cognitive/Artificial Intelligence Systems at IDC.
“By 2019, 40 percent of digital transformation initiatives will use AI services and by 2021, 75 percent of enterprise applications will use AI,” added Schubmehl.
Everyone who’s watching the technology space knows that AI is changing the face of how people interact with computer systems – whether through the use of predictions, recommendations, or automated customer service agents and intelligent process automation.
It takes drones 15 minutes to scan a construction site and make a map of its terrain—a process that takes a team of humans several days. https://t.co/aO5SGwYhtY
— MIT Tech Review (@techreview) March 18, 2018
Who’s investing how much in AI projects?
An analysis of forecasts categorized by industries reveals that retail will overtake banking in 2018 to become the industry leader in terms of cognitive/AI spending.
Retail firms will invest US$3.4 billion this year on a range of AI use cases, including automated customer service agents, expert shopping advisors & product recommendations, and merchandising for omnichannel operations.
Much of the US$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 US$2.0 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 US$1.7 billion investment to diagnosis and treatment systems.
The cognitive/AI use cases that will see the largest spending totals in 2018 are:
- Automated customer service agents (US$2.4 billion) with significant investments from the retail and telecommunications industries
- Automated threat intelligence and prevention systems (US$1.5 billion) with the banking, utilities, and telecommunications industries as the leading industries
- Sales process recommendation and automation (US$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
- Fraud analysis and investigation
According to IDC, 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 (70.5percent CAGR)
- Expert shopping advisors and product recommendations (67.3 percent CAGR)
A little more than half of all cognitive/AI spending throughout the forecast will go toward cognitive software.
The largest software category is cognitive applications, which includes cognitively-enabled process and industrial 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/AI systems and business services such as consulting and horizontal business process outsourcing related to these systems.
The smallest category of technology spending will be the hardware (servers and storage) needed to support the systems.
“The latest iteration of the Cognitive/AI Spending Guide is a roadmap for the journey of organizational digital transformation through the use of AI, deep learning, and machine learning. Organizations should be evaluating and starting to use AI throughout their systems and the Cognitive/AI Spending Guide is an indispensable resource in that effort,” said Schubmehl.
8 June 2023