Artifical intelligence set to become multi-billion dollar market

Posted by Mike Vizard on Apr 30, 2015 2:00:00 PM

455279239_720dfc98c8_zAfter many false starts over the past decade, it looks like artificial intelligence (AI) applications are finally starting to make their way into everyday applications across the enterprise market.

Most notably, AI is gaining traction in the form of machine learning software and cognitive computing applications powered by the IBM Watson platform. Having access to massive amounts of data is making it easier to justify the cost of investments in AI technologies that promise to transform the way most organizations operate.

High profile investment in AI systems

In fact, a new report from the market research firm Tractaca says the market for AI systems in the enterprise will grow from $202.5 million in 2015 to $11.1 billion by 2024.

Not only are venture capitalists investing millions of dollars in developing these technologies, but major players such as Microsoft and IBM are also pouring millions into the category.

At the Microsoft Build 2015 conference this week, Microsoft outlined how it’s building an intelligent cloud on top of the Microsoft Azure platform. This addition will make use of machine learning software to continuously update enterprise applications inside and outside of the cloud.

IBM, meanwhile, has published application programming interfaces (APIs) that are at the heart of an ecosystem of cognitive computing applications that it wants to see developers deploy on the IBM SoftLayer cloud.

In addition, Kleiner Perkins Caufield & Byers recently led a $55 million investment in Ayasdi, which has developed a machine learning platform based on technology originally developed at the Defense Advanced Research Projects Agency (DARPA).

On a smaller scale, Adatao this week announced general availability of an entire machine learning software stack that includes everything from the underlying predictive analytic engine to the dashboards required to make sense of the data. Investments in Adatao were led by Andreesen & Horowitz to the tune of $13 million.

The potential outcome for IT service providers

With all this money being poured into these applications, things are looking good for IT services firms because there’s an opportunity for them  to develop expertise in the next generation of AI technologies. While most IT organizations are still trying to figure out how they will employ platforms such as Hadoop in an actual production environment, they will soon have access to massive amounts of data.

At the other end of the spectrum, the cost of computing has fallen through the floor thanks mainly to the rise of public cloud computing services. When those two ingredients are combined, it’s clear that the primordial soup of emerging technologies is awaiting some type of application catalyst to turn those capabilities into something that is worth much more than the sum of the parts.

It’s hard to say how all this AI potential will actually be realized, but we do know that enterprise applications are about evolve. The future of enterprise application software is one where machines will not only automatically identify patterns and anomalies in that data, but also make suggestions about what questions should be asked.

Naturally, these types of capabilities are likely to have a profound effect on our entire society. But now that  the AI genie is out of the proverbial bottle, there’s no going back from here.

 

Photo Credit: Nic McPhee on Flickr. Used under CC 2.0 license. 

Topics: Cloud Trends

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