Enterprises’ growing appetite for AI and data-driven insights drives growth
The data analytics and management market is forecast to be worth $116 billion by year’s end, fueled by enterprise demand for data-driven insights and ESG compliance as well as increasing adoption of AI.
Further, the market is expected to grow by a CAGR of 10.9% from 2021 to 2026, according to the “Software Market Forecasts: Analytics and Data Management, 2021-26” report from sister research firm Omdia.
"Lessons learned from the COVID-19 pandemic have created a lasting demand for business optimization, expense compression, and adaptive innovation. These demands are in turn fueling a healthy increase in buyer spending across all technologies that support data-driven insights,” said report author Bradley Shimmin, chief analyst of AI and data analytics.
Opening up opportunities for growth are the increase in the variety of data, along with evolving data workloads and growth of self-service tools. Savings from going cloud native also are driving market growth, with ultra-affordable storage and serverless computing options leading to large-scale enterprise projects such as customer 360 and supply chain visibility.
Adding to the demand as well is a desire to automate processes and improve human decision-making through advances in AI by a new crop of business users and domain experts, according to Shimmin.
“This demand is being further propelled by access to specialized hardware and software infrastructure both capable of aligning capability and cost for highly demanding use cases such as real-time AI inferencing at scale.”
Fastest growing segments
Within this market, the data science platforms, tools and services segment is forecasted to remain the fastest growing, with a CAGR of 17.82% through 2026. Its market value is expected to reach $12.8 billion by 2026 from $5.6 billion this year.
Enterprise demand for business optimization, automation and innovation, as well as advanced analytics, should fuel growth in this category.
The second fastest growing segment is projected to be data governance, privacy and security, with a CAGR of 13.1% through 2026. Its market value is seen rising from $15 billion to $24.6 billion. Shimmin said this is a mature market due to the critical role it plays in almost all industries and geographies, but regulatory catalysts should fuel further growth.
“A global cry for better control over the responsible use of both data and AI is increasingly driving significant new legislative oversight that will lead to new market opportunities for data observability, accountability and auditability of software and services,” the analyst wrote.
Among geographic regions, North America will continue to lead the rest of the world with revenue expected to reach $66 billion by the end of 2026. But Asia and Oceania will see the fastest growth of 17.4% CAGR in the five-year period.