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The global natural language processing (NLP) market was valued at USD 10.93 billion in 2019, and it is expected to be worth USD 34.80 billion by 2025, registering a CAGR of 21.5% during 2020-2025
NEW YORK, March 24, 2020 /PRNewswire/ -- The global natural language processing (NLP) market was valued at USD 10.93 billion in 2019, and it is expected to be worth USD 34.80 billion by 2025, registering a CAGR of 21.5% during 2020-2025. Over the past few years, deep learning architectures and algorithms have made impressive advances in the fields of text analytics. Most of the marketing agencies are adopting text analytics solutions to enhance their marketing programs. The growing trend for mobile marketing is developing space for the studied segment to expand over the forecast period. Product innovation is still a significant trend in the text analytics market, which is mainly helping the market vendors to expand the customer base. For instance, Rosoka Software launched the analyst's notebook, Rosoka Text Analytics, which can be used to analyze unstructured documents in over 200 languages. This is expected to boost the company's audience reach, thereby fueling the financials.
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- The shifting trend from product-centric to customer-centric experience drives the market. The usage of the internet and an ever-expanding means of communication, consumption, and interaction has empowered consumers. Companies have been forced to rethink their branding and business models.
- Customer engagement vendors are incorporating AI capabilities into their platforms, in order to enable end users to create scalable, individualized customer experiences without the need for manual programming or logic building. It is estimated that the increased revenue due to the adoption of AI in customer relationship management activities may cross USD 125 billion, in the United States alone, by 2021.
- Increasing demand for smart devices across Industrial Internet of Things (IIoT) drives the market. The Industrial Internet of Things (IIoT) uses networked sensors and intelligent devices directly on the manufacturing floor, for collecting data to drive artificial intelligence and predictive analytics.
- Industries use products, such as networking devices, sensors for temperature, pressure, and flow measurement, and connected devices in huge numbers. The initial cost of implementation and the internal rate of return (IRR) period are the major factors impacting the decisions related to the implementation of such products, services, and software associated with them.
- However, complexity in the shift from traditional to advanced technology challenges the market to grow. The transition from the existing legacy system to SaaS platforms is an expensive process involving technical and non-technical resources and other challenges. Also, the lack of understanding of cloud computing migration leads to many migration failures in achieving organizational goals.
Key Market Trends
Speech/Voice is Expected to Register a Significant Growth
- Speech analytics solutions are gaining popularity among enterprises across the world since the conventional text-based analytics solutions adopted by enterprises is no longer enough to handle complex business issues. Many organizations are deploying speech analytics through a combination of internally recorded data, social media data, and external syndicated data, mainly to have a better understanding of ther customer requirements.
- The growing advancement in voice assistant technologies, such as Amazon's Alexa, is fueling the adoption of speech analytics over the forecast period. In 2017, May 16, the US President Donald Trump "addressed" a conference in Tianjin from Washington, where he speaks flawless Chinese. This advanced voice assistance feature was developed by iFlytek Co Ltd.
- Further, the e-commerce titan Alibaba joined the likes of Tencent Holdings and Baidu, in the race to develop AI that can enrich social media feeds and target ads and services, by using natural language processing. Moreover, NLP has been endorsed by the government as a part of its national-level plan that calls for the country to become the industry leader by 2030.
- During the Global Shopping Festival 2017, organized by Alibaba, the company handled 95% of customer service inquiries through its self-developed virtual customer service chatbot. Additionally, the company launched a smart speaker system, Tmall Genie, which uses NLP and AliGenie voice assistant to receive customers' requests in Mandarin Chinese. Thus, the advent of such speakers in the market is also anticipated to drive the demand for NLP in the country.
- Additionally, emerging companies, like Homebase has further developed new skills for voice assistants, which now can answer questions, such as what are the pool hours?, how much is my rent?, and what is the status of my maintenance ticket?, etc., which exhibit the advancements in AI-based assistants for NLP.
- Further, North America is one of the major markets for natural language processing, owing to its dominance in AI and machine learning (ML) technologies. According to RichRelevance, online shoppers in the United States are more inclined to use Google Assistant than the other platforms. Additionally, the utilization of smart speakers to obtain results on diverse topics is gaining increasing popularity, which, in turn, is expected to compel the companies to invest in the technology.
Asia-Pacific to Witness the Highest Market Growth
- The Asia-Pacific region is one of the most potential markets for the NLP industry. The region is also witnessing an increasing rate of adoption of the AI and ML technologies, especially among SMEs in the region. The voice assistance market is also booming in Asia, and the region is home to many consumer electronics manufacturers, including smart speakers and smartphones.
- In the present scenario, most of the AI development is done by large internet companies across the world. Apart from the United States, most of these companies are based in China. The Chinese government has also been very active in advancing its AI strategy. The growth of NLP in the country is mainly fueled by the governmental blueprint, which was outlined in 2017, in order to make the country the world's uncontested AI power in the next decade.
- Further, the Indian government is creating policies and making investments, with an aim to encourage AI-based startups. The growing digital adoption among the regional SMEs may also expand the growth of the market studied. Deploying an NLP-enabled chatbot can bridge the language gap between the English speaking and non-English speaking population of India, by providing multi-language support.
- Moreover, some of the prominent banks in India already deployed NLP and AI chatbots to enhance the customer-interaction process. For instance, HDFC Bank collaborated with Senseforth and launched 'EVA' (Electronic Virtual Assistant). The chatbot addressed 2.7 million queries in the first six months. These instances contributes to the growth of the market during forecast period.
Competitive Landscape
The natural language processing market is highly competitive and consists of several major players who are trying to gain larger shares. These major players with prominent shares in the market are focusing on expanding their customer base across foreign countries and are also providing new innovative solutions along with deals and mergers to increase their market shares and profitability. Key players are Google Inc., Microsoft Corporation, etc. Recent developments in the market are -
- Oct 2019 - Google LLC was planning to augment its search engine with natural-language processing features that were expected to be equipped with the most significant update of the past five years. Google planned to add new NLP models to its search engine that uses a technique called Bidirectional Encoder Representations from Transformers, or BERT, to analyze user queries. The method allows artificial intelligence algorithms to interpret text more accurately by analyzing how the words in a sentence relate to one another.
- Jan 2020 - NetBase announced the merger with Quid, which is one of the prominent companies in AI-driven text analytics. As a result of this merger, the combined company will have an enhanced portfolio in the next generation consumer and market intelligence solution. The merged company will deliver contextual insights that reveal business trends across all forms of structured and unstructured data.
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