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The cognitive analytics market size was valued at USD 3.01 billion in 2022. The market is projected to grow from USD 3.95 billion in 2023 to USD 29.46 billion by 2030, exhibiting a CAGR of 33.3% during the forecast period. North America dominated the global market with a share of 37.21% in 2022.
Cognitive analytics companies deploy technologies such as artificial intelligence, machine learning, natural language process, deep learning, and others to understand unstructured and structured data. The technology offers analysis of large sets of information, images, or recognizes certain objects that helps enterprises in enhancing its business model operations. The advanced technology further supports the cognitive application with real-time insights. The increase in digitalization and increased adoption of analytical tools is expected to boost market growth.
Rapid Changes in Business Models amid Pandemic Boosted Market Growth
COVID-19 severely impacted global markets and economic growth in the year 2020. The fastest way for enterprises to deal with the COVID-19 restrictions was to implement remote working policies. Industries such as healthcare, retail, manufacturing, IT and telecom, BFSI, and others swiftly implemented technologies that could support remotely working staff and help continue business operations. This propelled the adoption of cognitive analytics for various applications across industries.
The healthcare industry witnessed tremendous workload to provide treatment and care for patients. Various healthcare providers and research institutes implemented the analytics tools to understand pandemic patterns, disease history, different patients’ medical records, and others to understand the future outcomes. Further, the governments of several countries implemented cognitive analytics to make quicker decisions and provide proper governance. Thus, the COVID-19 pandemic pushed the market growth.
Focus on Hyper-personalization to Boost Market Growth
The enterprises are facing higher competition in acquiring customers across industries. To boost sales, companies are focusing on acquiring new customers and maintaining loyal customers with various strategies. These strategies are focused on the personal experience of the customers and enterprises are keen in understanding the need and changing trends amongst the customers.
This has fueled the demand for cognitive analytics tools that support real-time insights helping businesses with better decision making. As the technology uses customer buying behavior patterns, it can help in offering personal marketing strategies. These tools can help access social media data and provide current trends insights for the businesses to prepare customer targeting strategies. Thus, the rising product adoption by customer-centric enterprises is estimated to boost cognitive analytics market share.
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Growing SME Investments in Digital Tools to Drive Market Growth
Aimed at digital transformation, small & medium enterprises are significantly investing in cognitive analytics tools for better decision making. It helps small businesses in tackling the operational challenges by providing real-time insights. Furthermore, these enterprises lack in funding and acquiring skillful staff. This makes it essential for such businesses to integrate technologically advanced solutions.
Similarly, there is a rise in digitalization and involvement of customers in online transactions. With the adoption of advanced and intelligent analytical tools, SMEs can gain insights such as identifying bottlenecks, purchasing habits, and others. This can help in enhancing the business strategies and deliver customer satisfaction. Thus, growing SMEs’ investments in digital solutions is expected to propel the cognitive analytics market growth.
Security Concerns and Safety Challenges May Hamper Market Growth
The tool requires ample data to understand the pattern and provide analysis. Besides, it uses advanced technologies such as AI, machine learning, natural language processing, and others. It increases the risk of data theft and security breach. Furthermore, the increasing number of government policies, such as Europe’s General Data Protection Regulation, to reduce the usage of customer personal information for businesses may hamper the market growth.
Cloud-Based Segment to Grow as Real-time Data Analysis Fuels Demand for Cloud-Based Solutions
By deployment, the market is segmented into cloud and on-premises. The cloud-based segment is expected to gain maximum segment share and is set to grow at a rapid CAGR during the forecast period. The cloud computing model helps enterprises in expanding their businesses and offers easy digital transformation. The cloud-based analytics offers real-time data that help business operations.
The on-premises segment is expected to showcase steady growth rate during the forecast period. This can be attributed to the in-house data storage feature of these solutions.
Large Enterprises Segment to Lead as Ease of Business Management Fuel Product Demand
Based on enterprise type, the market is fragmented into small and medium enterprises and large enterprises. The large enterprises segment is poised to record maximum revenue during the forecast period. The secured IT budget and increase in adoption of advanced digital solutions by the large enterprises is expected to drive the growth rate. These enterprises cater to a vast set of customers. Therefore, quick business decisions are needed to solve the operational challenges. This is expected to boost the market growth.
The small and medium enterprises segment is set to register rapid growth rate over the forecast period. This is due to steady investment in advanced solutions by these enterprises to attract new customers.
Customer Management Segment to Lead Due to Rising Focus on Enhancing Sales
By application, the market is subdivided into customer management, fraud detection & security, supply chain management, sales & marketing management, and others. The customer management segment is set to register dominant share during the projected time frame. The analytics tools with technologies such as machine learning and AI support businesses in gaining deep customer insights, thus further driving segment growth.
The fraud detection and security segment is poised to witness substantial growth rate during the estimated period. The technology with the help of natural language processing, data mining and others detects any kind of anomalies and change in patterns.
The supply chain management segment is expected to exhibit significant growth rate during the forecast period. The technology helps with tracking the inventories, analyzing entry logs to offer a smoother process.
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IT & Telecom Segment Share to Propel Owing to Exponential Growth in Number of Customers
By industry, the market is classified into BFSI, IT & telecom, government, retail, healthcare, education, and others. The IT and telecom segment is set to record maximum share during the forecast period. As the industry faces challenges in managing the wide sets of customer data, the demand for cognitive analytics is set to gain traction in the coming years. To equip the industry with new and innovative technology, the need for cognitive tools is expected to grow.
The education segment is slated to witness rapid growth rate during the forecast period. The increase in self-learning and distance learning courses is set to drive the demand for advanced analytics. The healthcare segment is poised to showcase significant growth rate over the forecast period. This is owing to the surging demand for understanding patient patterns, disease outbreaks, and others.
The BFSI segment is poised to record prominent revenue share over the study period. This is owing to the increase in fraud cases and vulnerability. The technology offers advanced alerts by continuously monitoring the data and operations. Retail to invest in technology to enhance customer service.
Geographically the market is studied across Asia Pacific, Europe, the Middle East & Africa, North America, and South America.
North America Cognitive Analytics Market Size, 2022 (USD Billion)
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North America is set to record the largest revenue over the study period. The region is an early adopter of the advanced analytics tools, artificial intelligence, and machine learning, among others. The increasing security concerns and fraud practices is driving the adoption of technologies that can predict and analyze potential occurrences in advance. The U.S. is estimated to gain dominant market share owing to the presence of prominent market players.
Europe is poised to register significant market share during the forecast period. The rise in adoption of technologies such as machine learning and artificial intelligence, is set to fill the digital gap. As per the leading analytics report on Europe AI frontier, the European countries have 25% of AI start-ups, thus likely to drive Europe market expansion.
Asia Pacific is set to showcase substantial growth during the forecast period. Increase in investment in digital solutions and analytics tools are expected to fuel the product demand. South Korea, India, China, and others are likely to invest in the technology to understand the customer trends and demand.
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The Middle East and Africa market is expected to exhibit a significant growth rate over the forecast period. This is owing to the government emphasis on digitalization. The countries’ future endeavors on implementing digital solutions are expected to propel market growth.
Similarly, South America is estimated to showcase steady growth rate during the forecast period. The region offers numerous digital transformation opportunities, which is likely to boost market growth.
Focus on Addressing Business Operation Challenges Through Industry-specific Offering to Boost Key Players Revenue Share
Key players in the market are investing in research and innovation to address the industry related business issues. The players are providing advanced analytics capabilities by enabling technologies such as cloud platforms, 5G, and others. The rise in collaboration and partnership with various businesses to boost the competitive edge of the key players.
August 2022: Kyndryl Inc. announced collaboration with Fice9 Inc. to offer contact center services to the customers powered with automation, AI, and cognitive analytics solution capabilities. Together, the companies aimed to offer modern business solutions with personalized IT support.
An Infographic Representation of Cognitive Analytics Market
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The market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.
CAGR of 33.3% from 2023 to 2030
Value (USD Billion)
By Enterprise Type
According to Fortune Business Insights, the market is projected to reach USD 29.46 billion by 2030.
In 2022, the market was valued at USD 3.01 billion.
The market is projected to grow at a CAGR of 33.3% during the forecast period.
By end-user, the IT and telecom industry segment is expected to lead the market.
The rising investments by SMEs in digital technology is a key factor driving market growth.
IBM Corporation, Capgemini SE, Google LLC, SAS Institute, Inc., Microsoft Corporation, Nuance Communications, Inc. are the top players in the market.
North America is expected to hold the highest market share.
The cloud segment is expected to exhibit the largest share in the market.
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