Worldwide revenues for big data and business analytics (BDA) will reach $150.8 billion in 2017, according to the Worldwide Semiannual Big Data and Analytics Spending Guide from International Data Corporation (IDC). This is an increase of 12.4% over 2016. Commercial purchases of BDA-related hardware, software, and services are expected to maintain a compound annual growth rate (CAGR) of 11.9% through 2020 when revenues will be more than $210 billion.
"After years of traversing the adoption S-curve, big data and business analytics solutions have finally hit mainstream," said Dan Vesset, group vice president, Analytic s and Information Management. "BDA as an enabler of decision support and decision automation is now firmly on the radar of top executives. This category of solutions is also one of the key pillars of enabling digital transformation efforts across industries and business processes globally."
Banking and manufacturing will make the largest investments
The industries that will be making the largest investments in big data and business analytics solutions in 2017 are banking, discrete manufacturing, process manufacturing, federal/central government, and professional services. Combined, these five industries will spend $72.4 billion on BDA solutions this year. They will also be the largest spenders in 2020 when their total investment will be $101.5 billion. The industries that will experience the fastest growth in BDA spending are banking (13.3% CAGR) and healthcare, insurance, securities and investment services, and telecommunications, each with a CAGR of 12.8%. IDC notes that all but two of the industries covered in IDC's BDA Spending Guide will experience double-digit CAGRs from 2015-2020.
"The three industries that comprise the financial services sector – banking, insurance, and securities and investment services – all show great promise for future spending on big data and business analytics. This technology can be applied across key use cases throughout these financial institutions from fraud detection and risk management to enhancing and optimizing the customer's journey," said Jessica Goepfert, program director, Customer Insights and Analysis.
Compelling opportunities in other industries
"Outside of financial services, several other industries present compelling opportunities," Goepfert added. "Within telecommunications, for instance, big data and analytics are applied to help retain and gain new customers as well as for network capacity planning and optimization. Meanwhile, the media industry has been plagued by massive disruption in recent years thanks to the digitization and massive consumption of content. Here, big data and analytics can help firms make sense of and monitor their readers' habits, preferences, and sentiment. Vendors targeting the big data and analytics opportunity would be well-served to craft their messages around these industry priorities, pain points, and use cases."
BDA technology investments will be led by IT and business services, which together will account for more than half of all big data and business analytics revenue in 2017 and throughout the forecast. Services-related spending will also experience the strongest growth with a five-year CAGR of 14.4%. Software investments will grow to more than $70 billion in 2020, led by purchases of End-User Query, Reporting and Analysis Tools and Data Warehouse Management Tools. Non-relational Analytic Data Store and Cognitive Software Platform will experience strong growth (CAGRs of 38.6% and 23.3% respectively) as companies expand their big data and analytic activities. BDA-related purchases of servers and storage will grow at a CAGR of 9.0%, reaching $29.6 billion in 2020.
Big companies will invest the most
From a company size perspective, very large businesses (those with more than 1,000 employees) will be responsible for more than 60% of all BDA spending throughout the forecast and IDC expects this group of companies to pass the $100 billion level in 2018. Small and medium businesses (SMBs) will also be a significant contributor to BDA spending with nearly a quarter of the worldwide revenues coming from companies with fewer than 500 employees.
On a geographic basis, the United States will be the largest market for big data and business analytics solutions with spending forecast to reach $78.8 billion in 2017. The second largest region will be Western Europe with spending of $34.1 billion this year, followed by Asia/Pacific (excluding Japan) at $13.6 billion. Latin America and APeJ will experience the fastest growth in BDA spending with five-year CAGRs of 16.2% and 14.4% respectively.