According to a recent study by Grand View Research, Inc., the global advanced analytics market size was valued at USD 12.17 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 25.7% from 2021 to 2028.
The outbreak of the COVID-19 pandemic has triggered the adoption of analytics across businesses as part of the efforts to ensure business continuity and process optimization.
The adoption of advanced analytics is gaining traction in line with the advances in the latest technologies, such as machine learning, data mining, semantic analysis, neural networks, and multivariate statistics, and the rising volumes of data generated by businesses. As such, incumbents of various industries and industry verticals, including IT and telecom, financial services, insurance, and energy and utilities, are adopting cutting-edge analytics for continuous and accurate data processing and rapid decision making to maintain their competitive edge in the market. The growing usage of analytical solutions for demand forecasting, trade promotion optimization, and behavior analytics, especially in industries such as retail, is emerging as a decisive factor driving the growth of the market.
The volume of unorganized data, such as surveillance data, corporate emails, and consumer data generated from streaming activity for media subscription services, such as Amazon Prime Video, NetFlix, and Hulu, has been rising in recent years. Hence, the demand for database management tools has also been rising. This has particularly translated into the rising demand for analytics for data management and strategic decision-making.
At the same time, the continued integration of analytics with geographical information system (GIS) and improvements in location-based services have increased the volumes of geospatial data significantly, thereby necessitating the adoption of advanced analytics for optimal management of the data. Several businesses are adopting progressive analytics solutions, which can potentially utilize geospatial data, to locate clients on a map and draft new strategies accordingly.
The growing adoption of advanced analytics in predicting and forecasting trading patterns, electricity consumption patterns, and traffic conditions is propelling the growth of the market. The use of analytics in demand forecasting allows organizations to make data-based informed decisions and augment profitability. Apart from incumbents of various industries and industry verticals, such as manufacturing, banking, and professional services; government agencies are also investing aggressively in big data analytics, thereby driving the demand for advanced analytics. The rising demand for IoT-based predictive solutions, which can potentially help in collecting and analyzing data from sensors, including temperature sensors, air quality sensors, and motion sensors, among others, within the IoT network, is expected to boost the adoption of advanced analytical tools over the forecast period.
The big data analytics segment accounted for the largest share of around 30% in 2020 owing to the increasing popularity of social media and the rise in the number of virtual or digital offices that produce large volumes of data. Information management is emerging as an area where big data analytics can have a significant impact on business processes and productivity. The growing adoption of big data analytics across businesses for enhancing operational efficiency and strengthening market strategies is expected to drive growth of the segment.
The customer analytics segment is expected to grow significantly in line with the increasing demand for improved lead management, customer retention, and customer experience management. The strong emphasis businesses are putting on understanding the customers’ buying patterns and behavior, and accordingly offering a highly customizable customer experience is driving the demand for customer analytics. Continued introduction of business process automation, advances in the latest technologies, such as machine learning and artificial intelligence, and the integration of these technologies into customer analytics are expected to contribute to the growth of the segment. Efforts being pursued by the incumbents of the retail industry to offer an omnichannel experience to their customers and the growing adoption of customer analytics by large retailers to roll out marketing programs and personalized communications also bode well for the growth of the segment.
The on-premise segment held the largest revenue share of around 54% in 2020. Organizations opting for on-premise deployment can enjoy more flexibility and control to customize their IT infrastructure. The on-premise deployment also allows organizations to reduce the dependency on the internet infrastructure and protect their data from online fraud and potential losses. Such benefits are anticipated to encourage organizations, especially large organizations, to opt for on-premise deployment.
On the other hand, large vendors, such as SAP, IBM, and Microsoft, are aggressively introducing cloud-based advanced analytics solutions, thereby driving the growth of the cloud segment. Several organizations are also opting for deploying analytics solutions by integrating those with their existing business solutions, including enterprise asset management (EAM) and customer relationship management (CRM), thereby encouraging product innovation and development.
The large enterprise segment held the largest revenue share of over 60% in 2020. The segment is projected to witness significant growth over the forecast period, owing to the adoption of analytics solutions across functions, such as customer analytics and business analytics, for efficiently managing large databases of customers and other data assets. The large volumes of data generated by large enterprises are particularly driving the demand for predictive analytics and big data analytics, thereby propelling the growth of the segment. The strong emphasis the large enterprises are putting on data governance, location intelligence, and enterprise planning is anticipated to fuel the segment growth.
The demand for analytics from small and medium enterprises is rising in line with the exponential rise in the number of small and medium enterprises in countries, such as China, Japan, Australia, and Singapore. Initiatives being pursued by various governments to provide funding to small and medium enterprises for adopting cloud-based solutions are particularly expected to drive the growth of the SMEs segment. For instance, the Digital Australia 2020 initiative being pursued by the Government of Australia envisages providing funds to startups for the adoption of cloud-based advanced analytics solutions.
The banking, financial services, and insurance (BFSI) segment accounted for the largest market share of around 30% in 2020 as incumbents of the BFSI industry continued to adopt advanced analytics for identifying fraudulent transactions, optimizing processes, and handling data risks.
Analytics helps banks and other financial institutions in sorting unstructured data while ensuring regulatory compliance. Moreover, analytics can also allow financial institutions to ensure better operational efficiency and enhance customer experience. The growing demand for replacing conventional anti-fraud technology tools with advanced analytics is also expected to drive the growth of the BFSI segment.
Other segments with notable market share include IT and telecom, healthcare, military and defense, and government.
The growing demand for collaboration tools, such as video conferencing and web conferencing, from the IT and telecommunications industry, is anticipated to drive the growth of the advanced analytics market over the forecast period. Organizations are also adopting analytical tools to prevent fraudulent transactions, such as illegal authorization, illegal access, and cloning. Telecom operators serving a large subscriber base are particularly adopting big data analytics to build micro-segmentation and personalize the needs of every individual customer.
North America dominated the market with a revenue share of over 50% in 2020. The high volumes of data generated within North America, adequate availability of the supporting infrastructure required for the implementation of analytics, and the increase in the adoption of solutions based on the latest technologies such as machine learning and big data analytics are anticipated to drive the growth.
The growth of the regional market can also be attributed to the growing popularity of social media and the implementation of advanced analytical tools by automotive manufacturers. North America is home to some of the leading advanced analytics solutions providers, such as SAS, Microsoft, Oracle, and IBM.
The Asia Pacific regional market is anticipated to exhibit a remarkable growth rate over the forecast period. While businesses in the region continue to aggressively adopt big data analytics tools and solutions, they are also coping with the rising incidences of digital fraud. The growth of the e-commerce industry in countries such as India, Japan, China, Malaysia, and Singapore has particularly triggered the demand for predictive analytics for demand forecasting.
The market players are investing aggressively in R&D activities to drive organic growth, improving their internal processes, actively engaging in new product development, and improving their existing products as part of the efforts to acquire new customers and increase their respective market shares. They are also focusing on mergers, acquisitions, and strategic partnerships to develop technologically advanced products and gain a competitive edge in the market.
Some of the prominent players operating in the global advanced analytics market are:
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Article published by icrunchdata
Image credit by Getty Images, Moment, dowell
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