Cognitive Computing Market Size, Share & Trends Analysis Report By Technology (Natural Language Processing, Machine Learning, Automated Reasoning, Others), By Deployment Type (On-Premise, Cloud), By Enterprise Size (Large Enterprises, Small and Medium Enterprises), By Industry Vertical (Healthcare, BFSI, Retail, Government and Defense, IT and Telecom, Energy and Power, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global cognitive computing market size was valued at USD 34.40 billion in 2023. It is expected to reach USD 394.61 billion in 2032, growing at a CAGR of 31.14% over the forecast period (2024-32). Technological advancements in AI and ML have significantly contributed to the development of cognitive computing systems. These systems can process large volumes of data, learn from it, and make decisions or provide insights similar to human cognitive functions. This capability is driving adoption across various industries.

Cognitive computing refers to developing a computer systems model that simulates the human thought process as a human brain. These systems use natural language processing capability to tackle complex situations and learn from experience. They can interact with humans in a natural/human way and help make decisions based on learning. Cognitive computing includes self-learning systems that use pattern recognition, data mining, and natural language processing to impersonate how the human brain works or makes decisions. Typically, cognitive computing systems are utilized to complete tasks requiring enormous amounts of data processing. Moreover, cognitive computing is a sub-technology of artificial intelligence (AI) that includes almost the same underlying technologies to power applications, such as neural networks, expert systems, robotics, and virtual reality.

Highlights

• Natural language processing dominates the technology segment
• On-premise dominate the deployment type segment
• Healthcare dominates the industry vertical segment
• North America is the highest shareholder in the global market

Market Dynamics

Market Drivers

Advancement in Enabling Technology

Businesses strive to gain some reasoning out of the big digital data available. Across the globe, companies are experimenting with enabling technologies to analyze dark data with the increase in digital data. Thus, a system that can analyze this information in digital form and provide meaningful insights enabling technology is needed. Cognitive technology has increased its adoption in R&D organizations at a significant rate owing to its ability to forestall every possible solution required to solve particular situations, a significant factor driving the market's growth.

Cognitive computing systems are developed with machine learning algorithms and natural language processing (NLP) to analyze, predict, and conclude a situation. For instance, IBM Watson relies on deep learning algorithms and neural networks to process information based on data sets. Moreover, cognitive computing has gained high momentum recently as the performance of these technologies has widely improved, given the extensive R&D efforts. In addition, commercialization investment in these technologies has increased the sale and deployment of cognitive computing applications, positively impacting the market growth.

Increase in Volume of Large Complex Data

There is an increase in the large complex data owing to a surge in the volume of digitalization. Nowadays, an enormous amount of data in business organizations is in human language, videos, and pictures. Hence, advanced computing systems are strongly needed to process this dark data. In turn, this has led to an upsurge in need for cognitive computing recently. Similarly, the growth of social media networks has led to increased data volume and the quantity of data produced by websites, portals, and online apps.

Additionally, the rise in trends of big data-set implementation among various industries fuels the growth of the global cognitive computing market. As these data sets comprise humongous information and traditional data analytics systems are not compatible with computing this information, businesses across the globe are shifting their focus toward applying cognitive computing systems. This shift also acts as a significant growth driving factor forth the global cognitive computing market during the forecast period.

Market Restraint

High Cost of Deploying Cognitive Computing System

High costs associated with installing cognitive computing in industries such as healthcare, BFSI, research, and education restrain the growth of the cognitive computing market. In the current scenario, the cost involved in deploying cognitive computing is high due to the expensive technologies used. The prospect of providing optimum solutions to organizations by analyzing unstructured data incurs additional expenses to the end user. Expenses could be in the form of hardware, software, and IT skills to understand the process and its impact on the business. The end-user bears these additional costs, limiting the market growth.

Market Opportunities

Impact on Business Application

Data-driven decision-making is one of the critical advantages of cognitive computing. The process of the cognitive system still needs to be fully understood by most organizations. It has been anticipated that the decisions derived from big data would positively impact the business in years to come. This would result in increasing the overall revenue for the organizations. In addition, demand for cognitive systems is increasing in large organizations owing to the high deployment of cloud-based services.

Furthermore, there is a subsequent increase in the overall requirement for cloud-based services due to decreased cost of deploying cognitive computing in the organization. For instance, IBM Watson, a leading player operating within the cognitive computing market, plans to introduce Watson Analytics cloud-based service in the coming years to boost the adoption of cognitive computing through the cloud. In addition, cognitive computing is gaining momentum in developed countries. This competent factor of cloud-based services is expected to create growth opportunities for the global cognitive computing market.

Regional Analysis

Based on region, the global cognitive computing market is bifurcated into North America, Europe, Asia Pacific, and LAMEA.

North America Dominates the Global Market

North America is the most significant shareholder in the global cognitive computing market and is expected to grow at a CAGR of 29.4% over the forecast period. North America is one of the largest cognitive computing markets due to numerous large industries and IT infrastructure. The government's initiatives have helped the region expand its IT infrastructure by using advanced computing systems to serve the people better. Cognitive computing is being extensively implemented across the healthcare sector in North America. Additionally, U.S. hospitals are working with Watson to facilitate the proper treatment of cancer patients and help doctors. This is done by analyzing/studying the patient's past medical records. Watson is capable of answering questions in natural language, thereby contributing to providing the best course of treatment to patients. In addition, IBM is working with the Cleveland Clinic and New York Genome Centre to build a Watson app that would identify patterns in genome sequencing. This app would help doctors and patients to make better decisions about the patient's health. Therefore, the abovementioned factors are anticipated to drive the North American market growth.

Europe is predicted to grow at a CAGR of 30.1% over the forecast period. Europe is the second largest revenue contributor to the cognitive computing market owing to a surge in demand from various verticals such as healthcare, banking and finance, research and education, and government support. European countries are advancing their IT infrastructure to remain competitive in the technologically advanced scenario. For instance, the Science and Technology Facilities Council (STFC), a publicly-funded research council, has helped the region spearhead international science and technology. This council has helped the region overcome many societal problems, such as research and education, global energy and power, and climate change. In addition, European countries are enabling scientists, retailers, doctors, bankers, and others to extract the absolute value of data and make accurate decisions. Government support is one of the key reasons for the growth of cognitive computing in the European region.

Asia-Pacific is one of the emerging regions in science and technology. Countries such as China, Japan, and India are considered IT hubs in terms of technological advancements, owing to which these regions have become attractive markets for cognitive system providers. With the betterment of the IT infrastructure in Asian countries, cognitive computing is considered imperative for national competitiveness. In addition, China leads the Asia-Pacific cognitive computing market. The MilkyWay-2 system was designed and developed by the China's National University of Defense Technology. This system is considered one of the highest-performing supercomputers in the world. MilkyWay-2 system, or Tianhe-1A, would provide a platform for research and education. Key players in the cognitive market are also focusing on the Asian region to enhance their market share.

Furthermore, industry participants realize the importance of providing a multi-modal platform to ensure superior customer self-service. An increase in the penetration of mobility is anticipated to be the key trend influencing the market growth in this region. For instance, IBM plans to establish two Asian-Pacific centers to maximize profit and generate more revenue for its supercomputer Watson. IBM and SoftBank Telecom Corp. announced a global alliance to bring Watson to Japan to bring new apps and services powered by Watson.

LAMEA comparatively has slower IT infrastructure and technology growth than other regions. It primarily uses a cognitive system in research and education to enhance the overall quality in this region. Technology is expected to gain traction in the region owing to the involvement of cognitive computing in various applications such as healthcare, BFSI, research, and education. For instance, EMC Corporation has devised a strategic plan to establish a big data R&D center to serve Brazil's customers and invest USD 100 million. The R&D department of the company would help the region by providing meaningful insights driven by unstructured data.

Segmental Analysis

The global cognitive computing market is bifurcated into technology, deployment type, enterprise size, and industry vertical.

Based on technology, the global market is divided into natural language processing, machine learning, automated reasoning, and others. 

The natural language processing segment is the highest contributor to the market and is projected to grow at a CAGR of 29.6% over the forecast period. Natural language processing (NLP) is a specific technology based on computer and human language interactions. In other words, NLP is the ability of a computer to understand human language. Major challenges in the natural learning process involve understanding and generating human language. In addition, NLP is witnessing steady growth/implementation across various applications such as e-commerce and web, IT and telecommunication, and healthcare to enhance operational processes and customer experience by integrating NLP software solutions. Hence, even though this technology is being adopted in the healthcare sector, technology innovations in software solutions are expected to continue to show rapid growth in other applications.

Based on deployment type, the global market is bifurcated into on-premise and cloud. 

The on-premise segment owns the largest market share and is expected to grow at a CAGR of 29.0% over the forecast period. On-premise is installed and operated from a customer's in-house server and computing infrastructure. It is considered secure and reliable as the entire software is installed on the organization's premises. Though on-premise is comparatively more expensive than cloud-based services, it is preferred owing to its reliability. It is relatively more costly than cloud-based services because of the cost associated with the requirement of IT infrastructure, such as servers, utilization of the organization's native computing resources, and IT staff for support and maintenance. However, organizations are deploying applications on-premise as this software has complete control over data and processes. The market is expected to remain stable over the period, which limits its scope in complex environments.

Based on enterprise size, the global market is bifurcated into small and medium enterprises and large enterprises. 

The small and medium enterprises segment is the highest contributor to the market and is predicted to grow at a CAGR of 30.9% over the forecast period. Small and medium businesses are using cognitive systems to uplift the data processing standards and generate revenue for the company. The market for SMBs is anticipated to expand significantly in the approaching years due to the trend toward cloud-based services, which deploy cognitive systems at a relatively low cost. An increase in the number of data sources and diversification of businesses would lead to an exponential growth of cognitive systems. In addition, the lack of standardization and awareness among end users is expected to be a key challenge for market players in the future. CHIPS Technology Group, an IT help desk provider for Large Enterprises, uses Watson to help their engineers revolutionize. Watson enables CHIPS engineers to source quickly and provides clients with exhaustive IT solutions and improved customer service.

Based on industry vertical, the global market is divided into healthcare, BFSI, retail, government and defense, IT and telecom, energy and power, and others. 

The healthcare segment owns the largest market stake and is predicted to grow at a CAGR of 29.7% during the forecast period. Cognitive computing is applied broadly across the healthcare sector to analyze high volumes of electronic medical records and better treat patients. Although it is still in the early research stages, it is anticipated that this technology will be used to address several healthcare-related challenges. Makers of medical imaging technology are now using cognitive computing to make radiologists more effective. Computer vision algorithms help identify areas of mammograms consistent with breast cancer. In addition, the system analyses mammogram images to detect suspicious areas that indicate potential abnormalities. Recently, VuCOMP developed medical imaging technique with the help of machine learning that has helped radiologists to identify cancer. This would revolutionize the healthcare sector in years to come.

Recent Developments

• May 2024 - The recently founded Amity Cognitive Computing and Brain Informatics Centre (ACCBI) and the Nottingham Trent University (UK) Cognitive Computing and Brain Informatics research group signed a Memorandum of Understanding (MoU). The Memorandum of Understanding was signed by Prof. Kanad Ray, Director of the Amity Cognitive Computing and Brain Informatics Center at Amity University Rajasthan, and Dr. Mufti Mahmud, Director of the Cognitive Computing and Brain Informatics (CCBI) Research Group at Nottingham Trent University (UK).
• December 2023 -ArisGlobal, a market leader in Life Sciences technology and the creator of LifeSphere®, launched LifeSphere NavaX. This cutting-edge cognitive computing engine accelerates R&D IT Digitization by leveraging advanced technologies such as Large Language Models (LLM) and Generative AI (Gen AI).