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Predictive analytics market set for strong growth
The global market for predictive analytics solutions is set to experience strong growth over the coming years as the demand for faster, higher-quality insight increases.
This is according to a new report from Markets and Markets, which forecast that the sector will see a compound annual growth rate (CAGR) of 25.2 percent between 2013 and 2018. By the end of this period, the company predicted the market for these solutions will reach $5.24 billion. This is up from $1.7 billion in 2013.
It was noted by the research firm that the emergence of big data and a range of innovative technology solutions for integrating this information into a business' operations has been one of the key drivers of the sector.
As a result of a greater understanding of the importance of data to enterprises, as well as how firms will need to analyze this quickly in order to guide their decision-making, many organizations have refocused their data-related activities to favor predictive and real-time analytics. However, it added that traditional business intelligence solutions are struggling to keep up with this new, highly competitive environment.
North America will be the region to show greatest interest in predictive analytics investment over the next four years, Markets and Markets stated. But emerging economies in Asia-Pacific, the Middle East, Latin America and Africa are also expected to gain significant traction in the area and record high CAGRs for the forecast period.
The research organization observed that the increased demand for this technology will not be without its challenges. One of the biggest issues for many users will be a lack of awareness within their company about what predictive analytics entails and how they can take full advantage of the solutions.
The time-consuming process of many analytics activities will also pose difficulties for many businesses, which may lead many companies to investigate ways that they can improve the performance of their solutions in this respect. Therefore, tools such as in-memory computing, which can greatly reduce the time it takes to run queries, may also be in high demand in the coming years.
But Markets and Markets warned that such challenges could act as a barrier to the take-up of predictive analytics solutions in many business processes unless organizations have a clear plan in place for how to overcome these obstacles.
It was also stated recently that predictive analytics will be one of the most important technologies of the coming years to many businesses. ITBusiness.ca contributor Cindy Gordon stated it will become "ubitquitous" in many organizations in the future, as more companies come to understand how it can be used to harness the power of big data.
"Diving into the realities of big business, there is nothing more important than accurately predicting revenue forecasts and making financial market expectations," she said. "As predictive analytics embed more deeply into mainstream core applications in both sales and marketing processes, we will start to see improvements."
Figures from McKinsey suggest that implementing these tools could help companies achieve a CAGR of around ten per cent, Ms Gordon continued.