Natural Language Processing Market Size, Share & Trends Analysis Report By Component, By Deployment Model, By Enterprise Size, By Type, By Application, By End-use, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global natural language processing market size was valued at USD 27.73 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 40.4% from 2023 to 2030. Natural language processing (NLP) is a prominent component of artificial intelligence, it has applications in consumer chatbots and digital assistants and commercial applications like sentiment analysis, text analysis, voice sense (speech analysis), and change effect analysis. The NLP market is witnessing rapid growth owing to the rapid acceptance of novel technology advancements. Additionally, the growing requirement for data management and increased complexity in major businesses is also fostering the growth of the industry.

Increased customer demands for cloud-based technology and advancements in communication infrastructure are accelerating market growth. NLP is the interface between humans and machines, and it comprises executing computer programs and analyzing data. Low cost, high scalability, and high usage of smart devices across industries are expected to contribute to the industry’s expansion over the forecast period. Moreover, the expansion of the e-commerce industry and perception of online sales channels is projected to ascend the demand for NLP for enhancing consumer experience through personal attention and query handling.

Increasing demand for sentiment analytics and content management is augmenting the market expansion. Businesses can utilize sentiment analytics to offer their clients customized deals and discounts based on previous trends. Sentiment analytics is essential for examining consumer behavior and gauging the type of consumers. Moreover, Social media platforms are used by the retail and e-commerce industries because they are a major source of data for sentiment analytics, the anticipation of demand and supply, and enhancement in the consumer experience.

Post COVID-19 Outlook

The global COVID-19 outbreak has significantly impacted businesses worldwide. However, the COVID-19 pandemic has positively influenced the adoption of NLP-based services due to the nationwide lockdowns imposed by governments in countries across the globe. Post-COVID-19, enterprises are focused on cutting-edge technology to undertake contactless operations, including artificial intelligence (AI), machine learning (ML), analytics, and computing technology, across industries like BFSI, healthcare, IT, & telecommunication. This contributes to the demand for Al-driven NLP technology, which propels the global natural language processing (NLP) market growth.

Component Insights

The solution segment accounted for the dominant revenue share of 72.6% in 2022. The engines, platforms, tools, and interfaces that make up an NLG program process the translation of computer code into a language that is intelligible by humans. Deep learning is used by data analysis scientists as well as non-technical persons to analyze information and data. Natural language processing software also aids in producing actionable insights based on digital data.

With accelerating software implementation, lowering deployment costs & risks, maximizing the value of existing installations by optimizing them, and other associated factors, the service segment is expanding at a substantial CAGR during the forecast period. The service segment consists of a range of services offered to businesses that use tools for generating natural language. The demand for these services is projected to increase significantly with the increased use of natural language generation software across various industries since they help businesses implement and utilize natural language generation tools effectively and utilize the full potential of the software.

Deployment Insights

The on-premise segment is estimated to account for the leading share of 59.8% in 2022. The on-premises NLP deployment offers full control, visibility, and authentication security controls over data. In addition, it is easier to scale to match corporate demand and improve efficiency with built-in redundancy. The increased adoption of cloud-based NLP is anticipated to fuel the expansion of the market. The cloud segment is expected to experience the fastest growth over the forecast period.

The advances in cloud computing have created a transformation by enabling the creation of cloud-based NLP applications. The competency of cloud-based solutions to handle huge data sets and provide an improved consumer experience has stimulated several businesses to opt for cloud-based deployment over on-premises. Since most enterprises do not have the infrastructure and networks capable of handling large datasets, there is a massive demand for cloud-based deployment in the NLP market.  

Enterprise Size Insights

The large enterprise's segment held the leading revenue share of 61.9% in 2022, attributable to the strong demand for predictive approaches to maintain data security. Most businesses have already adopted natural language processing-based tools for processing their data in the cloud owing to easy availability and scalability. However, owing to the expensive infrastructure setup costs and lack of knowledge regarding the extensive benefits of NLP on various fronts, the adoption of natural language generation technologies has been relatively low in SMEs.

The affordability of NLP tools in the cloud and the expanding global market for cloud service providers are likely to transform the situation and propel the category of small and medium-sized businesses. SMEs are likely to have a greater propensity for orchestrating processes to combine and coordinate multiple instruments. Additionally, the COVID-19 epidemic and the accompanying market disruptions forced SMEs to rethink their business plans to enhance customer satisfaction and become more competitive on the global stage.

Type Insights

The statistical NLP segment held the largest revenue share of 39.3% in 2022. However, rule-based NLP and hybrid NLP segments are projected to witness prominent growth during the forecast period. Pattern matching, a highly valuable skill in the healthcare sector, is the main emphasis of rule-based NLP. The aforementioned technique is useful for the healthcare sector since it enhances the electronic health record (EHR) process by facilitating the discovery of arbitrary phrases and enhancing data management effectiveness.

The hybrid approach combines the best rule-based and machine-learning approaches and combines natural language processing, machine learning, and human input. Accurate analysis is guided by human expertise, but machine learning makes scaling that analysis simple. With a combination of rule-based and statistical NLP technologies in a hybrid way, organizations can utilize the features, and advantages of both technologies. While using the hybrid approach in NLP, there are various options available to choose the best course for managing data and accelerating business decisions.

Application Insights

The automatic summarization segment is expected to account for the leading share of 17.6% revenue share in 2022. As natural language processing assists compliance teams in analyzing and identifying critical information stored in structured data and uncovering anomalies and hidden patterns from massive datasets with the help of topic tagging, sentiment analysis, and other techniques, NLP tools are also being used more and more in risk and threat detection activities.

As natural language processing assists compliance teams in analyzing and identifying vital information deposited in structured data and uncovering anomalies and concealed patterns from huge datasets with the help of sentiment analysis, topic tagging, and other techniques, NLP tools are being used more and more in risk and threat detection activities. The text summarizing method develops algorithms or software that condenses the text and generates a summary of text data.

The challenge of text summarization is to condense a document's meaning into fewer sentences and words. The methods used to extract data from unstructured text data and use it for a summarization model can be broadly divided into Extractive and Abstractive methods.

End-use Insights

The healthcare segment is expected to account for a leading share of 22.9% in 2022. The leading share is attributable to the increasing adoption of advanced technologies and software such as predictive analytics, NLP tools, automation tools, and cloud-based software in the healthcare sector. Healthcare researchers can monitor prominent online comment boards to understand consumer apprehensions during the COVID-19 pandemic.

The IT & telecommunication segment is projected to witness the highest growth rate during the forecast period. The field of communications can benefit greatly from natural language processing technologies. An NLP engine can automatically fix grammatical errors in messaging applications and also can be used to analyze and parse various languages. As a result, a comprehensive system that automatically parses texts in any language can be offered.

Problems on the consumer side would be automatically debugged just by a message from the customer. The "AMITIES" project in Europe is a well-known example of how NLP is used in the telecom industry. It facilitates an easier billing system for the customers. Additionally, telecom users communicate with the system directly.

Regional Insights

North America is estimated to hold the largest revenue share of 30.7% in 2022. The region dominates AI and machine learning technologies, making it one of the key marketplaces for natural language processing technologies. Further, the prevalence of key market participants in the U.S. drives innovation in the region subsequently fueling the natural language processing market growth. Regional governments are also increasingly encouraging the use of AI, ML, and NLP technologies, which is allowing market participants to expand their presence in the region.

Asia Pacific is projected to expand at the highest CAGR of 42.7% during the forecast period. The growth is attributable to increasing smartphone usage, rapid technological advancements, the digitalization of economies, and government initiatives in developing countries from the region. Furthermore, this region holds leading positions in cutting-edge industries like robotics and has a strong IT infrastructure, software, and service offerings. These factors would create profitable growth prospects for the market.

Key Companies & Market Share Insights

The key vendors focus on the expansion of their consumer base to obtain a competitive advantage. Therefore, key companies take several strategic actions, including mergers & acquisitions, new product/technology development partnerships, and collaborations. Stakeholders can also emphasize product differentiation and technological advancements. Intensive efforts on organic and inorganic growth strategies are likely to help companies expand their penetration across untapped areas.

For instance, in July 2022, SAP SE acquired Askdata, a data interaction, and collaboration platform. The key objective of the acquisition is to assist consumers in making appropriate choices with AI-driven natural language searches. In another instance, in May 2020, Apple Inc. completed the acquisition of a machine learning startup, Inductiv Inc. The acquisition is aimed at the enhancement of the performance of Apple’s virtual assistant Siri. Some prominent players in the global natural language processing market include:

• 3M

• Apple Inc.

• Amazon Web Services, Inc.

• Baidu Inc.

• Crayon Data

• Google LLC

• Health Fidelity

• IBM Corporation

• Inbenta

• IQVIA

• Meta Platforms Inc.

• Microsoft Corporation

• Oracle Inc.

• SAS Institute Inc.

Natural Language Processing Market Report Scope

Global Natural Language Processing Market Segmentation

This report offers revenue growth forecasts at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global natural language processing market report based on component, deployment, enterprise size, type, application, end-use, and region:

• Component Outlook (Revenue, USD Million, 2017 - 2030)

  • Solution

  • Services

• Deployment Outlook (Revenue, USD Million, 2017 - 2030)

  • Cloud

  • On-Premises

• Enterprise Size Outlook (Revenue, USD Million, 2017 - 2030)

  • Large Enterprises

  • Small & Medium Enterprises

• Type Outlook (Revenue, USD Million, 2017 - 2030)

  • Statistical NLP

  • Rule Based NLP

  • Hybrid NLP

• Application Outlook (Revenue, USD Million, 2017 - 2030)

  • Sentiment Analysis

  • Data Extraction

  • Risk And Threat Detection

  • Automatic Summarization

  • Content Management

  • Language Scoring

  • Others (Portfolio Monitoring, HR & Recruiting, And Branding & Advertising)

• End-use Outlook (Revenue, USD Million, 2017 - 2030)

  • BFSI

  • IT & Telecommunication

  • Healthcare

  • Education

  • Media & Entertainment

  • Retail & E-commerce

  • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • U.K.

    • Germany

    • France

  • Asia Pacific

    • China

    • Japan

    • India

  • South America

    • Brazil

  • Middle East & Africa (MEA)