KNOWLEDGE MANAGEMENT Industry Trends 2021
AI continues to boom
According to IDC, revenues for the AI market, including software, services, and hardware, are expected to grow 17% per year from 2019 to 2024, to reach $300 billion by 2024. As of August 2020, the expected revenues for 2020 were $156.5 billion, an increase of 12.3% over 2019. This was a slight drop from previous years, attributed to the pandemic, but IDC expects a return to the higher growth rate. About 80% of this revenue comes from software, which accounted for $120 billion in 2020, and from AI platforms, which accounted for $4.3 billion. Within AI applications, customer relationship management (CRM) and electronic records management (ERM) were the two largest categories. CRM vendors are addressing both the customer experience and the employee experience in their use of AI.
In the services area, which accounted for $18 billion of the market in 2020, leaders are IBM, Accenture, Deloitte, Infosys, and Cognizant, which hold about a third of the market. Services for IT AI produced 80% of revenues in this category, and AI business services the remaining 20%. The most dynamic areas for embedding AI expertise are business analytics and intelligent automation programs, which IDC correlates with a crowded and fragmented services market, which includes 150 vendors.
In a study about AI use conducted by McKinsey & Co., approximately 2,400 individuals in a variety of specialty areas from companies in different industries, regions, and sizes were asked if their company had adopted AI for at least one function. About half of the respondents had done so, and McKinsey conducted interviews with them to obtain details about their use of the technology.
According to the McKinsey study, the industries most likely to report AI adoption were the high-tech, automotive, and assembly sectors. The top business functions were service operations, product or service development, and sales and marketing. AI had an impact on both revenue and costs among respondents in this study. Revenue increases were most commonly reported for inventory and parts optimization, pricing and promotion, and customer service analytics; two-thirds of respondents in these areas reported such increases.
In other use cases, including talent management, contact center automation, and warehouse automation, more than half of the respondents said that AI reduced costs. Few companies reported using deep learning in their AI applications (16%), and those that did were most likely to do so in the high-tech and telecom industries. Not surprisingly, companies that were successful in deploying AI were strong not only in the technical aspects but also in the management aspects, such as obtaining support from senior executives and developing strong in-house AI capabilities.
Graph databases—a high-value technology for KM
Although graph databases were developed decades ago, only in the last few years has this technology become mainstream. It is an emerging technology that has not yet reached widespread commercial application but is growing rapidly. The potential growth of graph databases is evidenced by the fact that over 90% of organizations in a survey by Gartner said they plan to use graph techniques within the next 5 years.
Organizations are turning to graph databases because of their processing speed and their native ability to store relationships among data elements, as well as their ability to easily process complex queries. Among the most common applications for graph databases are fraud detection and recommendation engines. In both cases, the ability to detect and surface relationships among entities is critical. Regulatory compliance and supply chain transparency are other use cases in which graph databases have significant advantages.
The global market for graph databases was $810 million in 2019, small relative to other technologies, but is expected to grow at nearly 30% per year to reach $4.5 billion by 2026, according to Facts & Factors. The banking and financial services industries account for about one-third of this market, with others such as healthcare, retail and ecommerce, and transportation also participating actively. MarketsandMarkets predicts a slightly lower growth rate, 22%, and a market that increases from $1 billion in 2019 to $2.9 billion in 2026.