Advanced Analytics: The Fastest Growing Segment of the Business Intelligence (BI) Market
Gartner predicts that by 2018, more than half of large organizations globally will compete using advanced analytics and proprietary algorithms, causing the disruption of entire industries.
As described by Gartner, Advanced Analytics is the autonomous or semi-autonomous examination of data or content using sophisticated techniques and tools, typically beyond those of traditional business intelligence (BI).
Advanced analytic techniques include: data/text mining, machine learning, pattern matching, forecasting, visualization, predictive analysis, semantic analysis, sentiment analysis, network and cluster analysis, multivariate statistics, graph analysis, simulation, complex event processing and neural networks.
Why Use Advanced Analytics?
Advanced analytics enables organizations to:
Discover deeper insights.
See how to alter the way they service customers and improve customer experience.
Predict competitive initiatives with accuracy.
Generate recommendations based on the predictions.
Identify the market demand and innovate products to meet it.
Explore market outlook, opportunities, challenges, trends, size and growth, competitive analysis and major competitors.
Understand end-user trends and behaviors in order to drive better business performance, strategic decisions, and operational efficiency.
The State of Advanced Analytics
Advanced analytics continues to be the fastest-growing segment in the business intelligence (BI) and analytics market, which is forecasted to grow almost 14 percent to reach $1.5 billion in 2016, according to Gartner, Inc.
Massachusetts Institute of Technology claims that companies which inject big data and analytics into their operations outperform their peers by minimum 5 percent in productivity and 6 percent in profitability.
Today’s growth is data driven and traditional analytics gets an organization nowhere. It has become mainstream to anticipate trends by looking at patterns that have resulted in the market in order to achieve and optimize the desired business outcomes.
Accuracy and efficiency in predicting and analyzing are the most important factors in advanced analytic solutions. The reason is that advanced analytics is an enhancement to the existing technologies and business operation models as it will empower them to diagnose pain points and foresee trends. Therefore, the more accurate data collected, the deeper and closer the insight gained.
Since advance analytics has the capability to extract meaningful data and convert it into actionable insights from tremendously extensive unstructured data, organizations are able to make much faster decisions in their business strategies to keep up with the fast pace of modern technology and market. The real challenge is to turn this data into relevant, useful, actionable, intuitive, digestible and interactive information to the right person at the right time. Last year around this time, our hosts Butch Stearns, Scott Liewehr and special guest Ray Wang, the Principal Analyst, Founder & Chairman at Constellation Research, Inc. discussed smart data on the CMS-Connected Show. Here is the web broadcast with deep insight by our expert analysts:
Another great way to see today’s big picture is Gartner’s Magic Quadrant. Once again this year, Gartner evaluated 16 analytics and data science firms over 10 criteria and placed them in 4 quadrants, based on completeness of vision and ability to execute in the 2016 Magic Quadrant for Advanced Analytics Platforms (the latest report published February 2016).
The same 4 firms: SAS, IBM, KNIME, and RapidMiner, which were Leaders in both 2014 and 2015, kept their Leader positions on the quadrant this year as well. Dell, the latest player in the MQ is also sitting in the Leaders section. In addition to the leaders segment, the 2016 MQ portrays that both SAS and IBM have lost a little in the ability to execute, and both KNIME and RapidMiner have gained a little in vision.
It’s very clear that the ROI of advanced analytics is highest when applied to targeted, vertical market use cases. This will continue to be the way in 2016 and beyond, with manufacturing leading the direction.
24% of global manufacturers ($500M+) predict advanced analytics will make the greatest impact to their supply chain’s performance this year, according to the State of Global Supply Chain Report published this week by GTNexus in partnership with global research firm, YouGov. Large-scale manufacturers also predict the Internet of Things (11%), 3D printing (9%) and RFID (3%) will also make a positive contribution to supply chain performance this year as the chart below demonstrates the technologies of all manufacturers expect to have the greatest positive impact on their supply chains in 2016.
Predictions from the Numbers
MarketsandMarkets forecast that the advanced analytics market will grow from $7.04 billion in 2014 to $29.53 billion in 2019 at a Compound Annual Growth Rate (CAGR) of 33.2% during the forecast period 2014-2019.
The predictive analytics market size is expected to grow from USD 2.74 billion in 2015 to USD 9.20 billion by 2020, at an estimated Compound Annual Growth Rate (CAGR) of 27.4% during the forecast period while the advance analytics global market to grow at a Compound Annual Growth Rate (CAGR) of 26.80 percent over the period 2016-2021, according to Research and Markets.
The Analytics-As-A-Service (AaaS) market is expected to grow from $4,230 million in 2015 to $23,030 million in 2020, at a CAGR of 40.3% during the forecast period.
Salesforce estimated adding analytics and Business Intelligence (BI) applications will increase their Total Addressable Market (TAM) by $13B in 2014. The new prediction is that adding new apps in analytics is projected to increase their TAM to $82B for calendar year (CY) 2018, fueling an 11% CAGR in their total addressable market from CY 2013 to 2018.
Related video: Vendor Spotlight / Salesforce Marketing Cloud Review
The global text analytics market has the potential to reach $6.5B by 2020, attaining a CAGR of 25.2% from 2014 to 2020, according to the Allied Market Research Report. Customer Relationship Management (CRM), predictive analytics and brand reputation are the top three projected applications.
In conclusion, this trend will continue to rise substantially as organizations keep realizing the meaningful value in leveraging advanced analytics and experiencing how it helps foster better decision making and improve business outcomes.
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