A new industry analysis forecasts cognitive computing to have revenues of nearly $14B by the end of the decade. What exactly is cognitive computing, and why is it becoming such a prominent computing approach?
- What is Cognitive Computing?
- Why is Cognitive Computing Becoming so Prevalent?
- Automated Reasoning to Grow at 37% Annually
- North America the Largest Cognitive Computing Region
- Summary: Key Research Highlights
A study by industry analyst Allied Market Research (AMR) projects that the cognitive computing market will hit $13.7 billion in global revenue by 2020, meaning that its CAGR between 2015 and 2020 would be a stunning 33.1%.
What is Cognitive Computing?
As its name suggests, cognitive computing is a subset of artificial intelligence. It is a form of computing that simulates aspects of the human mind. Systems are designed so that they are capable of learning. Specific methods that are used in these settings include natural language processing, data mining, and pattern recognition. The objective of this form of computing is to allow IT automation to problem-solve without the need for human intervention.
Machine learning algorithms are set up to allow these systems to work, explains Margaret Rouse in TechTarget. “Such systems continually acquire knowledge from the data fed into them by mining data for information,” she says. “The systems refine the way they look for patterns… as well as the way they process data so they become capable of anticipating new problems and modeling possible solutions.”
This IT area is used to perform artificial intelligence within virtual reality, robotics, neural networks, natural language coding, and expert systems.
Why is Cognitive Computing Becoming so Prevalent?
The broad recognition and adoption of this AI field has been in line with other aspects of the third-platform technological revolution (cloud, mobile, big data, and social). Cognitive computing has been spurred by the rapid growth of cloud hosting, big data, and the prioritization of speed.
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“Cognitive analytics have optimum capabilities in handling huge volumes of data and facilitate the quick transitioning of manufacturing footprints and technologies,” notes AMR. “The increasing adoption of cognitive computing in business applications has led to significant improvements in the productivity and standard of operations in numerous organizations.”
Automated Reasoning to Grow at 37% Annually
To understand the cognitive computing market, the report by AMR segments the field into technology, applications, end users, and modes of deployment. Technology is subdivided into information retrieval, automated reasoning, machine learning, and natural language processing. The applications are subdivided into various industries, such as healthcare, security, and BFSI (banking, financial services and insurance). The end users are categorized as sizes of businesses: SMBs and enterprises. Modes of deployment are public cloud and on-site infrastructure.
The top form of technology in 2014 was natural language processing. It represents the lion’s share of the market with 40%, or 2 out of every 5 dollars spent, and will continue to be the biggest money-maker moving forward. However, there is another huge chunk as well: machine learning, which represents 30%. Automated reasoning is currently smaller but is expected to grow at a 37% CAGR during the forecast period; computational biology is a primary application for that segment.
In terms of applications, the two top industries are healthcare and BFSI. Healthcare alone accounted for $745.1 million in revenue in 2014, which was approximately 30% of the market. According to AMR, “[t]he growth in the segment is driven by medical imaging technology,” such as “the ability of cognitive analytics to help physicians and nurses in analyzing mammogram images and detecting suspicious areas that indicate potential abnormalities.”
North America the Largest Cognitive Computing Region
The global region that has the most early-adoption of cognitive computing apps is North America. Measuring $1.06 billion in 2014, the continent is projected to continue as the leading region through the end of the decade. Europe is second. Also, Asia-Pacific will likely be a big market because of fast cloud growth in the region’s SMEs.
Companies such as Accenture, PwC, and Deloitte primarily use cognitive computing internally, for employee training and to increase workplace efficiency. Within healthcare, the computing method is used to glean a better understanding from health records.
Summary: Key Research Highlights
In summary, here are five top findings of the cognitive computing study:
- Growth will accelerate due to expansion of unorganized big data within healthcare, finance, security, and IT/telecommunications.
- The highest-revenue technology is natural language processing.
- Highest adoption through 2020 will be in healthcare, retail, and finance/insurance.
- The top region for these applications is North America, with 41.6% of worldwide revenue in 2014.
- “Asia-Pacific and LAMEA are expected to be the most lucrative markets in terms of growth,” reports AMR, “owing to the developments in the healthcare and the insurance sector along with the growing adoption of advanced technologies.”