According to a new market report the market for predictive analytics software is forecast to reach $6.5bn globally by 2019. The market growth is driven by increased demand for customer intelligence and fraud/security intelligence software. Cloud-hosted predictive analytics software solution is seen as an emerging market and is expected to drive growth in the near future.
The study, The Predictive Analytics Market, (including Customer intelligence, Decision support systems, Data mining and management, Performance management, Fraud and security intelligence, Risk management, Financial intelligence, Operations and Campaign management) is published by Transparency Market Research.
Globally, the predictive analytics market was valued at $2.08bn in 2012 and is forecast to grow at 17.8% CAGR from 2013 - 2019. End-use sectors such as banking and finance services, insurance, government, pharmaceuticals, telecom and IT, and retail, are seen as key demand drivers during the forecast period. Collectively these segments accounted for 71.8% of the marker share in 2012.
Among all, companies under BFSI (banking, finance services, and insurance) sector are expected to account for the largest market share throughout the forecast period. However, retail and manufacturing, are expected to record faster growth as compared to any other segment. This is largely due to fast growing consumer driven digital data and the subsequent need to extract strategically critical information from the same.
The rise in incidences of frauds, payment defaults, over or under stock inventory levels, and stringent regulations regarding GRC (governance, risk, and compliance), have pushed companies to adopt predictive analytical models, so they can gain futuristic insights and take preventive measures.
Demand for industry specific software solutions has caused customer intelligence, fraud and security intelligence, and campaign management to emerge as leading segments. These segments together accounted for approximately 50% of market revenue in 2012.
These different software solution types are used for supporting organizational functions/applications such as sales and marketing, customer and channel management, operations and workforce management, and finance and risk management. Among these software solutions for finance and risk management applications accounted for 40.9% of revenue share in 2012. The demand has seen a surge amidst the restraining impact of current global economy, where companies have been looking for measures to effectively manage their finances and associated risks.
Most of these software solutions are currently delivered through on-premises installation, and such installed solutions alone accounted for more than three-fourth of revenue share. Demand from companies with strong financial arms has been a key contributor to their high revenue share. However, with rise in awareness pushing the demand up from small and medium businesses, cloud based predictive analytics software solutions and services are expected to emerge as an alternative. Low cost, ease of switching the vendor, and scope for upgrade as per requirements, are some of the factors supporting demand for cloud hosted software solutions.
North America, which has been at the forefront of generating big data in large quantities, is expected to remain the largest market for predictive analytics software solutions. This is due to demand for advanced business intelligence being directly affected by need to analyse big data. The growth of the predictive analytics aspect of Business Intelligence has seen a revival ever since big data gained popularity and has been growing exponentially. As a result, big data vendors too have been entering the market for predictive analytics, making the competition intense. Currently players such as SAS Institute Inc., SAP AG, Oracle Corporation, IBM Corporation, Microsoft Corporation, Teradata Corporation, and Tableau Software, are among key players in the market. The top five players accounted for 80% of the global market in 2012 making it challenging for the new entrants to establish themselves in the market. Other vendors in the market are Fair Isaac Corporation, TIBCO Software, Inc., Information Builders, Alteryx, Inc., QlikTech International AB, and MicroStrategy, Inc., among others, it says.