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Cognitive computing and AI market worth $458m in APeJ

APeJ banks to spend US$65.5 million spend cognitive and AI spend in 2017The Asia Pacific excluding Japan region will spend a total of US$458 million in 2017 on cognitive and AI systems, an increase of 53.3% over 2016, market analyst IDC estimates.

The analyst further predicts that spending on cognitive and artificial intelligence (AI) systems to reach US$4.6 billion in 2021, with banking and healthcare industries leading growth.

Also revealed in the latest update of the IDC Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide, cognitive and AI spending is expected to achieve a compound annual growth rate (CAGR) of 72.9% over the 2016-2021 forecast period.

“Cognitive and AI is being applied in all kinds of different areas by enterprises seeking to create better customer connections and increase efficiency and insight. Application of cognitive and AI systems is the foundation of the technology led transformation we are seeing drive change across almost every industry segment,” IDC Asia/Pacific research manager for customer insights and analysis Ashut osh Bisht said.

The banking and healthcare industries are forecast to have the highest spending on cognitive and AI systems in 2017 with investments of US$65.5 million and US$47.3 million respectively. Insurance, Central Government and Education will have the highest growth rate for 2016-21, with a CAGR greater than 83%.

The massive implementation of Cognitive and AI solutions in the region can be attributed to the fact that all industries have a CAGR greater than 50% for 2016-21.

IDC has identified 23 use cases for cognitive and AI, including digital assistants (US$46.3 million) and diagnostic and treatment systems (US$41.9 billion) - the use cases with the highest expected spending.

But intelligent processing automation - now the tenth largest use case – is predicted see enough investment growth to become the largest use case by 2021 with a CAGR (2016-21) of 104.2%.

Other use cases forecast to see rapid spending growth over the 2016-2021 period are expert shopping advisors & product recommendations (CAGR 127.1%), public safety and emergency response (CAGR 111.9%) and automated preventative maintenance response (109.5% CAGR).

The majority of spending on cognitive and AI technology will go to software and services over the course of the forecast, IDC said.

Although software spending growth is expected to slow down after 2019, services spending will experience steady growth throughout the forecast, achieving a five-year CAGR of 86.0%. Hardware will be the smallest and slowest growing area of spending, despite a robust CAGR of 42.4%.

“A message from technology solution vendors on cost reduction achieved by productivity and efficiency boost is likely to resonate with APeJ customers,” IDC senior research manager  Jessie Cai said.

Automation solutions is a compelling investment for organizations in the region more than anything else. Likewise, invest in ensuring good onboarding among new customers, providing them with necessary technical know-how to understand your offered solution.”

 

 

First published in Fintech Innovation