International Data Corporation (IDC) yesterday shared their predictions that cognitive and artificial intelligence (AI) systems will reach $12.5 billion this year, an increase of nearly 60% compared to 2016. Beyond this current growth spurt, IDC forecast “a compound annual growth rate (CAGR) of 54.4% through 2020 when revenues will be more than $46 billion.”

This growth is being driven by the enormous potential of cognitive computing AI, and deep learning to completely transform the way enterpries are creating value by rolling out more useful goods and services, by operating exponentially more effectively, and by engaging with their customers and consumers through highly personalized and sensitive recommendation engines.

In their news release issued March 3rd, they categorized the greatest levels of investment in 2017 as “Quality Management Investigation and Recommendation Systems; Diagnosis and Treatment Systems; Automated Customer Service Agents; Automated Threat Intelligence and Prevention Systems; and Fraud Analysis and Investigation.” which, combined, will account for nearly half of investment in cognitive AI solutions this year.

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The industry use cases poised for growth between IDC’s 2015-2020 forecast period are Public Safety and Emergency Response (85.5% CAGR) and Pharmaceutical Research and Discovery (74.2% CAGR).

What The Artificial Intelligence World Needs Now Is Network, Smart Network

In order for cognitive AI systems to manifest the greatest value – those systems need to be connected, between every engagement endpoint (whether machine or human), access to the network, transport over the network, delivery to a cognitive computing engine hosted somewhere in “the cloud,” and able to return an instant action, all within seconds in this hyper-connected world.

And these massive, growing number of “sessions” need to be processed securely, precisely and in “high definition” particularly when humans are interacting with machines, including using their voices, as cognitive AI evolves into advanced applications including “sentiment analysis” measuring the strength of consumers’ “feelings” in contact center scenarios, for example.

NetFoundry AppWAN for IBM Watson

Last month, we announced NetFoundry has been working closely with IBM Watson including interoperating with their new Voice Gateway for Watson, and our demo (presented at IBM InterConnect last month in Las Vegas) showed how much better IBM’s world-leading Watson engine worked better when the clarity of the human voice enabled a more accurate read.

We have been working in many of the same areas IDC’s announcement identified as the most aggressive levers, according to Marianne Daquila, research manager, Customer Insights and Analysis at IDC. “Heavily regulated markets such as banking and securities investment services are among the early growth drivers. Collectively, these two financial industries will represent a quarter of worldwide spending on cognitive/AI solutions. Stringent compliance requirements are key drivers for these industries as they seek new innovations in fraud and risk detection. Additionally, companies in this sector are adopting cognitive-based program advisors and recommendations to better match products with clients.”

Compliance Matters, Connectivity Is Key

Healthcare and pharma, two other heavily regulated industries, are also represented in the enteprise applications we are supporting by connecting them with higher Quality of Experience over ultra-secure private networks spun up over the public Internet but made impenatrable based on the patented session splitting technology and other software defined perimeter and networking capabilities built into our connectivity offerings, including our AppWAN for Watson and AppWAN for Office 365. We are seeing increasing demand for layering cognitive capabilities into real time human communications (for example enterprise internal communications as well as external communications, with the greatest emphasis today on cognitive contact center platforms).

“Intelligent applications based on cognitive computing, artificial intelligence, and deep learning are the next wave of technology transforming how consumers and enterprises work, learn, and play,” said David Schubmehl, research director, Cognitive Systems and C ontent Analytics at IDC, as part of their announcement yesterday.

“These applications are being developed and implemented on cognitive/AI software platforms that offer the tools and capabilities to provide predictions, recommendations, and intelligent assistance through the use of cognitive systems, machine learning, and artificial intelligence. Cognitive/AI systems are quickly becoming a key part of IT infrastructure and all enterprises need to understand and plan for the adoption and use of these technologies in their organizations.”

The Worldwide Semiannual Cognitive Artificial Intelligence Systems Spending Guide sizes the market for technologies that analyze, organize, access, and provide advisory services based on a range of unstructured information. The spending guide quantifies the cognitive computing opportunity by providing data for more than 20 use cases across 16 industries in eight regions. Data is also available for the related hardware, software, and services categories. Unlike any other research in the industry, the detailed segmentation and timely, global data is designed to help suppliers targeting the market to identify market opportunities and execute an effective strategy.

IDC’s news release can be accessed here.