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Cognitive Computing Market Size, Share, COVID-19 Impact & Industry Analysis, By Component (Platform, and Services), By Technology (Machine Learning (ML), Natural Language Processing (NLP), Automated Reasoning) By Deployment (Cloud-based, and On-premise), By Enterprise Size (Small & Medium Enterprise (SMEs), and Large Enterprise), By End-user (BFSI, Healthcare, Retail & e-commerce, IT & Telecom) and Regional Forecast, 2020-2027

Last Updated: June 03, 2024 | Format: PDF | Report ID: FBI103377

 

KEY MARKET INSIGHTS

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The cognitive computing market size was valued at USD 11.11 billion in 2019 and is projected to grow from USD 72.26 billion by 2027 to USD 185.62 billion by 2031, exhibiting a CAGR of 26.6% during the forecast. North America dominated the global market with a share of 39.78% in 2019. The growing volume of data has increased the use of big data analytics among organizations, thereby fostering the market progress.


The market growth is primarily driven by the rising penetration towards artificial intelligence (AI), machine learning (ML), and neural networks. According to Data.gov, global spending on cognitive and artificial intelligence (AI) systems was USD 37.5 billion in 2019 and will reach USD 77.6 billion in 2022.


Covid-19 Impact on Market


Cognitive Computing Being Increasingly Adopted by Organizations Owing to COVID-19 Outbreak


The rising threat of the COVID-19 pandemic has been causing social stress and leading to economic troubles. Although major businesses have been put on hold, the cognitive technology platform seems to be widely adopted. Under this worrying scenario, cognitive technologies are used for screening of the population as well as assessing the infection risks. As a result, the market will shrug off the impact of the Covid-19 pandemic and witness considerable industry growth in the coming years.  


The government and organizations are likely to invest in artificial intelligence (AI), machine learning (ML), cognitive technology, internet of things (IoT), and cloud computing. These technologies are beneficial for early detection, diagnosis of disease, environmental situations, mitigating risk of economic crisis, and analysis of the large volumes of data. Additionally, key players are focusing on launching new products to improve customer experience. For instance, in May 2020, Deeper Insights, UK-based Company, launched a free research discovery app - "COVID Insights". This app will keep medical experts up to date with recent data on COVID-19 and enable clinicians to find the COVID related information.


LATEST TRENDS


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Rising Demand for Cognitive Technology Based on Cloud Platform to Drive the Market


One of the emerging trends for the market is the shifting focus of enterprises towards the deployment of cloud-based cognitive technology. Cognitive cloud computing helps the companies to increase revenue, reduce costs, and increase operational efficiencies. Also, organizations are focused on adopting cognitive cloud computing solutions and other cloud-based services, to cater to the real-time user cases, such as supply chain optimization and production for product enhancement. Key players in the market are focused on developing a cognitive cloud computing platform, to cater to the rising demand across industries and business organizations.


COGNITIVE COMPUTING MARKET GROWTH FACTORS


Burgeoning Demand for Big Data Analytics among Organizations to Aid Market Growth


One of the significant market drivers is the rising demand for big data analytics across various industries such as IT and telecom, healthcare, aerospace & defense. The rising volume of data and the adoption of big data tools are likely to drive the demand for big data analytics. According to Data Science Association, the global revenue for big data analytics solutions is around USD 189.1 billion in 2018. Also, major players in the market are focusing on investing in startups to expand their market presence. For instance, in December 2019, Multiples Alternate Asset Management Private Limited (MAAM), Indian private equity firm invested around USD 20 million in Quantiphi, Inc., an Indian AI, and big data company. According to this investment, MAAM will provide artificial intelligence, machine learning, and big data solutions across sectors such as healthcare, retail, insurance, media, and entertainment, among others.


RESTRAINING FACTORS


High Costs Involved at Initial Stage Proving to be Inhibiting Factor for Market Growth


To develop cognitive solutions, the high upfront investment is required to set up maintenance architecture and infrastructure that leads to high operational costs. The operation and setup process is much more complex and requires exhausted resources. This process consumes a huge amount of energy, network components, data centers, and others. Furthermore, issues relating to government standards and uncertain regulatory compliance are expected to limit the cognitive computing market growth. The market is anticipated to experience several challenges owing to the lack of awareness among SMEs.


SEGMENTATION


By Components Analysis


Platform Segment to Hold Highest Market Share


Based on the components, the global market is segmented into platform and services. The increasing adoption of cognitive platforms such as cloud among the end-users is expected to drive the demand for the cognitive platform. Further, the services segment is expected to show significant growth during the forecast period. Enterprises can reduce analytics timelines from weeks to minutes using cognitive services. Companies are investing heavily in cloud-based cognitive solutions and related services. For instance, in January 2017, Amazon Web Services launched a three AWS Cloud Cognitive Services. This service includes computer vision (Amazon Rekognition), text-to-speech (Amazon Polly), and chatbot (Amazon Lex).


By Technology Analysis


Natural Language Processing (NLP) Segment to Grow at Faster Pace


Based on technology, this market is divided into machine learning (ML), natural language processing (NLP), automated reasoning, and others. Among them, the natural language processing segment is expected to hold the highest market share during the forecast period. The intrinsic capacity to process natural language interactions is significantly contributing to the growth of this segment. NLP technology is a core ability of cognitive computing systems that helps in analyzing unstructured data for improving customer expectations and their needs. Hence, with the help of NLP, enterprises get better insights to optimize the business processes, customer perception, and reduction in operational cost which in turn is propelling the growth of the segment. Thus, key players are focused on adopting various marketing strategies such as new product launches to improve customer experience. For instance, in November 2019, Amazon Web Series (AWS) launched the NLP service “Amazon Comprehend”. This service uses the ML to find insights in the unstructured text.


The automated reasoning technology is expected to grow at the highest CAGR owing to its user-friendly and cost-effective deployment in various applications.


By Deployment Analysis


Cloud-Based Deployment to Gain Traction


Based on the study, the deployment segment is categorized into on-premises and cloud.


The cloud segment is expected to rise with the highest CAGR owing to the rising demand for secure, reliable, and cost-effective cognitive solutions among enterprises. With the advancements in technology, organizations are likely to adopt cloud-based cognitive solutions.


The on-premises segment is likely to have maximum market revenue share during the forecast period. For instance, in May 2017, the Australian Defense Department invested USD 4 million in the Watson cognitive computing infrastructure. The Australian Defense Department has made a three-year contract with IBM Australia to provide the on-premise cognitive platform.


By Enterprise Size Analysis


Implementation of Cost-Effective Cognitive Solutions to Boost the Adoption in SMEs


Based on enterprise size, this market for Cognitive Computing is segmented into small & medium-sized enterprises (SME’s) and large enterprises. SMEs segment is expected to grow at higher CAGR in the forthcoming years. This is attributable to the implementation of “Intelligent Chabot” to ensure better consumer experience for retaining and engaging consumers.


The large enterprises segment is expected to hold a major market share during the forecast period. The growth is attributed to the rising inclination towards the adoption of technologies such as artificial intelligence (AI), internet of things (IoT), and machine learning (ML), among others.


By End-user Analysis


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Retail and E-commerce to Register a Higher CAGR


Based on the end-user, the market scope for Cognitive Computing includes BFSI, healthcare, retail & e-commerce, IT & telecom, government & defense, and others. The retail and e-commerce segment is predicted to grow at the highest CAGR during the forecast period. Major players in the market including IBM Corporation, and Microsoft Corporation are adopting cognitive services to reduce and eliminate threats & fraud, and enhance transparency in payment operations.  For instance, IBM Watson Commerce, predictive analysis, and voice assistant trends are transforming the retail and e-commerce industry.


The healthcare segment is expected to hold the highest market share in 2018. The growing adoption of cognitive solutions in healthcare to provide remote assistance to access patient health records and improve the patient experience is expected to drive the market.


REGIONAL INSIGHTS


North America Cognitive Computing Market Size, 2019 (USD Billion)

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Geographically, the market is divided into five regions, including North America, Asia Pacific, Europe, Middle East & Africa, and Latin America.


North America dominated the Cognitive Computing Market with a share of 39.78% and was valued at USD 4.42 billion in 2019. North America held the maximum market share due to the rising penetration of core technologies such as AI, IoT, big data.


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Asia Pacific market is anticipated to grow with the highest CAGR during the forecast period. The rising investment made by major organizations and the government for the development of AI-based projects is expected to significantly accelerate the demand for cognitive services. According to Tsinghua University, in 2017, Chinese AI organizations have raised around USD 27.7 billion on AI and cognitive technology and services.   The market in Europe is expected to grow at a significant CAGR owing to the rising investment by major players to improve customer experience. The Middle East and Africa and Latin America are estimated to grow at a considerable rate.


KEY INDUSTRY PLAYERS


Emphasis of Key Players towards Developing Innovative Cognitive Services to Strengthen Position


Microsoft Corporation develops and offers Microsoft office licenses, and provides a wide range of products, services, software, and electronic devices. Microsoft Corporation offers Azure Cognitive Services under its product segment. This service includes AI services and cognitive APIs that help users to build intelligent apps. The Azure cognitive service offered by Microsoft is easy to operate and deploy. The company is currently investing in the development of various cognitive services projects all across the globe.


March 2018 – Microsoft Corporation launched new offerings and several enhancements for its Azure Cognitive Services cloud APIs. This launch will help developers to leverage AI-based capabilities in mobile apps.


LIST OF KEY COMPANIES PROFILED IN COGNITIVE COMPUTING MARKET:



  • Alphabet, Inc. (Google LCC) (U.S.)

  • Microsoft Corporation (U.S.)

  • IBM Corporation (U.S.)

  • SparkCognition, Inc. (U.S.)

  • Tata Consultancy Services (TCS) (India)

  • Red Skios (Spain)

  • Saffron Technology, Inc. (U.S.)

  • Acuiti (Australia)

  • Enterra Solutions (U.S.)

  • Cognitive Scale, Inc. (U.S.)

  • Palantir Technologies (U.S.)

  • ColdLight Solutions, LLC (U.S.)

  • Numenta (U.S.)

  • Vicarious (U.S.)


KEY INDUSTRY DEVELOPMENTS:



  • March 2023: Tata Consultancy Services (TCS), a global IT services and consulting firm, introduced its TCS Cognitive Plant Operations Adviser, a 5G-enabled solution, on the Microsoft Azure Private Mobile Edge Computing (PMEC) platform. This launch is aimed at helping industries such as manufacturing, oil and gas, consumer packaged goods, and pharmaceuticals enhance their production processes.

  • June 2023: Wisedocs, an AI software platform tailored for the insurance sector, unveiled its AI Medical Summary Platform. This platform builds upon their existing medical record review software, providing insurance companies with a means to efficiently condense extensive medical records and extract valuable insights to expedite reviews and streamline decision-making processes.


REPORT COVERAGE


An Infographic Representation of Cognitive Computing Market

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The Cognitive Computing Market report provides a detailed market analysis and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the advanced market over recent years.


Report Scope and Segmentation


























































 ATTRIBUTE



  DETAILS



Study Period



  2016–2027



Base Year



  2019



Forecast Period



  2020–2027



Historical Period



  2016 – 2018



Unit



  Value (USD billion)



Segmentation



  Component, Technology, Deployment, Enterprise Size, End-User   and Region



By Component




  • Platform

  • Services



By Technology




  • Machine Learning (ML)

  • Natural Language Processing (NLP)

  • Automated Reasoning

  • Others (Computer Vision, Deep Learning, Robotics, etc.)



By Deployment




  • Cloud-based

  • On-premise



By Enterprise Size




  • Small & Medium Enterprise (SMEs)

  • Large Enterprise



By End-user




  • BFSI

  • Healthcare

  • Retail & e-commerce

  • IT & Telecom

  • Government & Defense

  • Others (Energy & Utilities, Transportation, etc.)



By Region


 




  • North America (the U.S., Canada, and Mexico)

  • Europe (U.K., Germany, France, Italy, Spain, and the Rest of Europe)

  • Asia-Pacific (Japan, China, India, South Korea, Australia, and the Rest of Asia- Pacific)

  • South America (Brazil, Argentina, and the Rest of South America)

  • The Middle East & Africa (South Africa, UAE, Saudi Arabia and the Rest of the Middle East & Africa)






Frequently Asked Questions

Fortune Business Insights says that the Cognitive Computing Market value stood at USD 11.11 billion in 2019.

By 2027, the market size is expected to reach USD 72.26 billion

The market is expected to grow at a CAGR of 26.6% in the forecast period (2020-2027).

Within component, the platform segment is expected to lead the market during the forecast period

Burgeoning demand for big data analytics among organizations is one of the key drivers for market growth

Alphabet, Inc. (Google LCC), Microsoft Corporation, IBM Corporation, SparkCognition, Inc., and Tata Consultancy Services (TCS) are the top companies in the market.

The retail & e-commerce segment is expected to grow significantly at the highest CAGR during forecast period.

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