Overall market growth of AI technology
IBM’s (IBM) Watson AI platform seems to be seeing higher adoption across the industry, driven by the ongoing digitalization trend. Watson AI technology, combined with machine learning, offers key insights to complex business problems for IBM’s Fortune 500 clients.
According to research firm IDC (International Data Corporation), the overall investment on cognitive and AI is anticipated to grow at a staggering rate of 54.2% YoY (year-over-year) to $19.1 billion in 2018. IDC also predicted that cognitive and AI spending between 2016 and 2021 will grow at a CAGR (compound annual growth rate) of 46.2% to $52.2 billion.
Ample opportunity for IBM
There’s a huge scope for growth in AI technology across healthcare, financial services, and IoT (Internet of Things). Each segment has huge growth potential. IBM’s AI platform is comprised of Watson Health, Watson Financial Services, and Watson IoT. Watson AI belongs to the company’s Cognitive Solutions segment.
In the graph above, you can see the revenue growth for IBM’s Cognitive Solutions segment in the last five quarters. In that period, the company generated $23.3 billion in revenue at an average of $4.7 billion per quarter. It exited Q2 2018 with $4.6 billion, up 0.9% YoY (year-over-year).
Watson Financial Services is buoyed by the RegTech and commercial payments offerings. Large financial institutions such as JPMorgan (JPM) are using AI for risk and portfolio optimization. IBM Watson Health is gaining market share by landing a lot of deals. So IBM is tapping the growing AI market with its innovative technology and secure cloud service.