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Spending on Cognitive/AI Systems to Reach $19.1 Billion in 2018- IDC
New spending guide revealed by International Data Corporation (IDC) shows that worldwide spending on cognitive and artificial intelligence (AI) systems will reach $19.1 billion in 2018, an increase of 54.2% over the amount spent in 2017.
With industries investing aggressively in projects that utilize cognitive/AI software capabilities, the International Data Corporation (IDC) Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide forecasts cognitive and AI spending will grow to $52.2 billion in 2021 and achieve a compound annual growth rate (CAGR) of 46.2% over the 2016-2021 forecast period.
David Schubmehl, research director, Cognitive/Artificial Intelligence Systems at IDC, said “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.
“IDC has estimated that by 2019, 40% of digital transformation initiatives will use AI services and by 2021, 75% of enterprise applications will use AI.
“From predictions, recommendations, and advice to automated customer service agents and intelligent process automation, AI is changing the face of how we interact with computer systems.”
Retail will overtake banking in 2018 to become the industry leader in terms of cognitive/AI spending.
Retail firms will invest $3.4 billion this year on a range of AI use cases, including automated customer service agents, expert shopping advisors and product recommendations, and merchandising for omni channel operations.
Much of the $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 $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 $1.7 billion investment to diagnosis and treatment systems.
Marianne Daquila, research manager, Customer Insights & Analysis IDC, said “Enterprise digital transformation strategies are increasingly including multiple cognitive/artificial intelligence use cases,”
“Business transformation is occurring across all industries as successful companies embrace the array and potential impact of these solutions.
“Automated customer service agents, increased public safety, preventative maintenance, reduction of fraud, and improved healthcare diagnosis are just the tip of the iceberg driving spend today.
“With double-digit year-over-year spending growth forecast, IDC expects to see an increase in general use cases, as well as a refinement of industry-specific use cases.”
The cognitive/AI use cases that will see the largest spending totals in 2018 are: automated customer service agents ($2.4 billion) with significant investments from the retail and telecommunications industries; automated threat intelligence and prevention systems ($1.5 billion) with the banking, utilities, and telecommunications industries as the leading industries; and sales process recommendation and automation ($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; and fraud analysis and investigation.
The use cases that will see the fastest spending growth over the 2016-2021 forecast period are: public safety and emergency response (75.4% CAGR), pharmaceutical research and discovery (70.5% CAGR), and expert shopping advisors and product recommendations (67.3% 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 industry 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.
On a geographic basis, the United States will deliver more than three quarters of all spending on cognitive/AI systems in 2018, led by the retail and banking industries.
Western Europe will be the second largest region in 2018, led by retail, discrete manufacturing and banking.
The strongest spending growth over the five-year forecast will be in Japan (73.5% CAGR) and Asia/Pacific (excluding Japan and China) (72.9% CAGR). China will also experience strong spending growth throughout the forecast (68.2% CAGR).
“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,” added Schubmehl.
The Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide sizes spending for technologies that analyze, organize, access, and provide advisory services based on a range of unstructured information.
The spending guide quantifies the cognitive computing opportunity by providing data for more than 20 use cases across 16 industries in eight regions.
Data is also available for the related hardware, software, and services categories.
Unlike any other research in the industry, the detailed segmentation and timely, global data is designed to help suppliers targeting the market to identify market opportunities and execute an effective strategy.
French antitrust regulators have fined Apple 150 million euros ($162 million) over its App Tracking Transparency (ATT) feature, which is facing scrutiny in multiple European countries.
The French Competition Authority ruled that Apple’s implementation of ATT was “neither necessary nor proportionate to the company’s stated goal to protect user data” and unfairly penalized third-party publishers.
Alongside the financial penalty, Apple has been ordered to publish the decision on its website for seven days. The ruling comes amid ongoing investigations in Germany, Italy, Romania, and Poland into ATT, which Apple introduced in 2021 as a privacy safeguard.
ATT requires apps to obtain explicit user consent via a pop-up before tracking activity across other apps and websites. If users decline, the app loses access to their advertising identifier, limiting targeted advertising. Critics argue that the system disproportionately benefits Apple by restricting competitors while promoting its own advertising services.
The French watchdog found that ATT forces users to navigate excessive consent windows for third-party apps on iPhones and iPads, making the process unnecessarily complicated.
Additionally, Apple’s system requires users to opt out of ad tracking twice rather than once, which the authority said undermines the feature’s neutrality and causes economic harm to app publishers and ad service providers.
The ruling emphasized that smaller publishers, which rely heavily on third-party data collection for revenue, are particularly affected.
The French regulator initially declined to impose emergency measures in 2021 after complaints from the advertising industry, but continued its investigation, ultimately leading to Monday’s decision.
Pan-African technology company Cassava Technologies, in a strategic collaboration with Microsoft, has launched a community engagement initiative focused on South Africa.
Through this initiative, the two organisations will establish training hubs for youth in the local communities that will help spur employment opportunities in the renewable energy industry.
By prioritising renewable energy skills development, energy efficiency, and community microgrids, the initiative will empower the next generation to lead in the transition to clean energy. Activities will be focused in Johannesburg and Cape Town, where Cassava and Microsoft operate.
The project’s training hubs will play a vital role in equipping Africa’s women and youth with the skills they need to thrive in the renewable energy industry and ensure that the benefits of the energy transition are realised by all.
Cassava Technologies, through its renewable energy company and co-location companies, will be a key player in this collaboration. Their local renewable energy expertise will ensure that the initiative delivers tangible benefits linked to clean energy jobs and projects to the communities that are involved.
Through this initiative, Cassava and Microsoft are supporting community engagement and sustainable development in the region and across the continent, which lays the groundwork for expansion into other African markets.
Finhai Munzara, Chief Corporate Development Officer of Cassava Technologies, said, “We are honoured to collaborate with Microsoft on this project, which ensures that we bring all Africans along as we transition to a digitally connected future using sustainable energy. By leveraging our technological expertise, on-the-ground experience, and Microsoft’s global reach, we are poised to make a lasting, positive impact on South African communities.”
“We are pleased to work with Cassava to support climate initiatives in South Africa that enhance local communities, ensuring that those all have the tools to thrive,” said Markus Swart, Director of Data Centre Operations in South Africa at Microsoft.
MTN South Africa, in partnership with Lynk Global, has successfully conducted Africa’s first satellite-to-mobile phone call touted as a groundbreaking development.
This historic trial, conducted in Vryburg, North West province, marks a major step toward bridging connectivity gaps in underserved and rural regions across the continent.
The test involved making a voice call using a standard smartphone connected via a low-Earth orbit (LEO) satellite.
This innovative approach eliminates the need for traditional network infrastructure, providing a viable solution for remote areas with limited or no mobile coverage.
According to Charles Molapisi, CEO of MTN South Africa, this initiative aligns with the company’s broader strategy to extend network coverage to hard-to-reach areas.
“This achievement demonstrates our commitment to leveraging cutting-edge technology to ensure connectivity for all, regardless of location,” Molapisi stated.
The trial also assessed SMS capabilities over the LEO satellite connection, proving the technology’s potential for widespread application.
With successful implementation, satellite-to-mobile communication could revolutionise telecommunications in Africa, enabling digital inclusion and economic opportunities in regions previously disconnected from mainstream networks.
This milestone underscores the growing role of satellite technology in Africa’s telecommunications landscape.
By integrating satellite solutions with existing mobile networks, MTN and Lynk Global aim to provide seamless connectivity that overcomes traditional infrastructure challenges.
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