The global predictive analytics market size was valued at USD 5.7 billion in 2018 and is expected to register a CAGR of 23.2% over the forecast period. Rising awareness among organizations about generated data that can be used for predicting future outcomes by using predictive analysis solutions is driving the growth of the market. Growing usage of internet, coupled with the availability of several means of accessing the internet, has led to a massive increase in the volumes of data being generated. This has led to the expansion and advancement of high-speed internet services across the globe. Furthermore, growing penetration of integrated and connected technologies has provided a platform to vendors of predictive analytics solutions for leveraging this unprecedented evolution of the internet.
Globalization, coupled with economic growth in various countries, also plays a crucial role in higher data generation across the globe. With the exponential rise in organizational data, companies are increasingly hiring teams of analysts and data scientists for the processing and analysis of collected data. Hence, organizations are increasingly deploying predictive analytics solutions for appropriate usage of available data for the prediction of future trends. Additionally, the high revenue-generating potential of these solutions is accelerating the adoption of these solutions.
The ecommerce sector has improved the traditional shopping experience of customers. Dedicated online/social media advertising, email campaigns, and customer perception analysis are the key factors improving the sales of companies. Growing popularity of connected devices has resulted in retailers focusing on real-time analysis of the shopping behavior of consumers. The outcomes of real-time analytics can further be utilized for developing tailor-made offers to enhance customer retention.
Predictive analytics is an ad hoc analysis. It assists organizations to apply the most effective solutions for their business growth and predict possible future scenarios. Currently, several organizations are deploying advanced solutions that can help them in the development of impactful business strategies in real time by improving their day-to-day decision-making. These solutions also help organizations implement business intelligence (BI) and analytical tools to acquire accurate insights from predicted data, which further helps in boosting the financial performance and credibility of companies who adopt these solutions.
However, the availability of skilled professionals with sufficient knowledge of functioning of predictive analytics solution is low in the market. This is a major concern faced by many organizations in the global market, as skilled personnel are required for effective functioning and implementation of predictive analytics solutions. Individuals must be proficient enough to analyze the predicted data and take subsequent action based on the results. Therefore, in order to overcome the above challenge, services such as training and consulting have gained significant momentum in the market.
Based on solution, the market is segmented into customer analytics, financial analytics, marketing and sales analytics, network analytics, risk analytics, supply chain analytics, web and social media analytics, and others. Predictive risk analytics solution plays a crucial role in the overall growth of the market. The segment dominated the global market in 2018. The growth of the segment can be attributed to higher adoption of various risk analytics solutions for identifying upcoming risks and risk mitigation measures. Moreover, increasing data volumes, necessity of data integration, and increasing emphasis on developing sophisticated risk strategies are collectively contributing to segment growth.
The customer analytics segment is anticipated to register the highest CAGR over the forecast period. It is a systematic and advanced analytical process also known as customer intelligence, which is increasingly used by companies for understanding customer behavior. Companies use this data for making strategic business decisions and enhancing their overall revenue generation. Moreover, customer analytics comprising techniques such as predictive modeling and data visualization help organizations increase customer lifetime value (CLV), gain customer loyalty, and retain existing customers.
The service segment is anticipated to witness a high CAGR over the forecast period. The growth of the service segment is mainly attributed to rising deployment of predictive analytics solutions in various industry verticals, which is likely to lead to increased demand for pre- and post-deployment services. Based on service, the market has been segmented into support and maintenance, training and consulting, and deployment/installation services. The deployment/installation services segment is predicted register a significant CAGR over the forecast period. This can be attributed to growing deployment of predictive analytics solutions on cloud platforms.
The training and consulting segment is projected to witness remarkable growth in the market over the forecast period. Training and consulting services play an important role in transferring adequate knowledge to employees about the functioning of the solution. It helps organizations overcome the challenge of lack of skilled labor. Hence, these services help organizations enhance their overall performance and revenue generation, thereby driving the growth of the segment over the forecast period.
Large enterprises dominated the global market in 2018. These enterprises are increasingly adopting predictive analytics solutions for predicting future trends by using available historical data. Large enterprises are also developing their future business strategies based on predictive outcomes. Moreover, predictive analysis of massive historical data provides a competitive advantage to organizations and helps them boost their overall performance accordingly.
The small and medium enterprises segment is projected to register the highest CAGR from 2019 to 2025. Higher adoption of cloud technology and predictive analytics by small- and medium-sized enterprises is significantly contributing to the growth of the segment. These enterprises require predictive analytics solutions for enhancing their operational performance by reducing overall operational cost. Increasing investments for establishment and development of small- and medium-sized enterprises globally is also contributing significantly to the growth of the segment.
The BFSI segment is estimated to be a major contributor to the growth of the predictive analytics market. This can be attributed to growing adoption of advanced financial analytics solutions by leading organizations operating in the BFSI vertical owing to enhanced regulatory compliance processes. The regulatory framework has become increasingly complex across the globe, owing to which, the demand for predictive analytics solutions from the BFSI vertical is anticipated to grow over the forecast period. Moreover, credit risk management, capital planning, and insurance risk management among others are increasingly important owing to regulatory requirements. Additionally, the adoption of predictive analytics solutions is enabling BFSI companies to undergo digital transformation. It offers improved customer experience and helps in dealing with changing customer behavior.
The retail and e-commerce segment is predicted to register the highest growth in the global market. Inclination of customers toward a tailored and personalized shopping experience plays a major role in driving the demand for predictive analytics solutions in the retail and e-commerce segment. Moreover, advancements in technologies such as Artificial Intelligence (AI), Augmented Reality (AR), and machine learning are expected to drive the growth of the market. Additionally, rapid adoption of social media, growing internet penetration, and augmented use of data-intensive platforms has accelerated the demand for predictive analytics technology.
The on-premise segment is projected to dominate the global market. The growth of the segment can be attributed to data security, storage, and privacy concerns associated with cloud infrastructure. Moreover, on-premise deployment of predictive analytics solutions has been the traditional method opted for by many leading organizations globally. Since most organizations have data centers and servers for effective functioning of their internal and external software solutions, on-premise mode is increasingly preferred.
However, the cloud segment is projected to exhibit the highest CAGR over the forecast period. The higher growth rate of the cloud segment can be attributed to cost-effectiveness, efficient resource utilization, faster data processing, and direct IT control benefits obtained by cloud models. Moreover, cloud deployment of these solutions enables organizations to operate remotely. Additionally, cloud deployment of predictive solutions provides additional flexibility in business operations and ease in real-time deployment to the organizations.
North America dominates the overall market. This can be attributed to technological advancements and a strong presence of market players, particularly in U.S. Moreover, funding provided to new entrants by venture capitalists is anticipated to alleviate the competition in the market. Growing innovations in techniques and methods involved in the development of predictive analytics solutions are anticipated to be key opportunities for established players. Furthermore, increased awareness regarding predictive analytics measures and its importance is creating a significant demand for these solutions.
Asia Pacific is expected witness the highest CAGR over the forecast period. The high growth of the regional market can be attributed to increasing deployment and adoption of advanced predictive analytics solutions. Moreover, higher potential of the Asia Pacific market leads to solution and service providers expanding their presence in the region. Furthermore, increasing focus and investments made on emerging technologies such as artificial intelligence, IoT, and machine learning is expected to drive the market in the region.
Some of the key players operating in the market are IBM Corporation; SAP ERP; Microsoft Corporation; Siemens AG; General Electric Company; Schneider Electric SE; NTT Data Corporation; Oracle Corporation; SAS Institute, Inc.; and Tableau Software, Inc. These players have implemented various organic and inorganic growth strategies such as product launches, mergers, acquisitions, collaborations, and partnerships to expand their presence in the global market.
IBM Corporation has been an innovative developer of predictive analytics solutions for various industry verticals. The company offers SPSS solutions that predict future outcomes for enhancing the performance of an organization. Moreover, manufacturers operating in the market have started to offer cloud-based solutions to their customers. For instance, in February 2017, Oracle Corporation launched and added four new cloud-based solutions in its IoT portfolio. The new solutions launched will aid businesses to take advantage of digital supply chains.
Base year for estimation
Actual estimates/ Historical data
2014 - 2017
2019 - 2025
Revenue in USD Million and CAGR from 2019 to 2025
North America, Europe, Asia Pacific, Latin America, and Middle East & Africa
U.S., Canada, Germany, U.K., China, India, Japan, and Brazil
Revenue forecast, company ranking, competitive landscape, growth factors, and trends
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This report forecasts revenue growth at global, regional, and country levels and provides an analysis of latest industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global predictive analytics market report based on solution, service, deployment, enterprise size, end use, and region:
Solution Outlook (Revenue, USD Million, 2014 - 2025)
Marketing & Sales Analytics
Supply Chain Analytics
Web & Social Media Analytics
Service Outlook (Revenue, USD Million, 2014 - 2025)
Support & Maintenance
Training & Consulting
Deployment Outlook (Revenue, USD Million, 2014 - 2025)
Enterprise Size Outlook (Revenue, USD Million, 2014 - 2025)
Small & Medium Enterprises
End-use Outlook (Revenue, USD Million, 2014 - 2025)
Aerospace & Defense
Automotive & Transportation
IT & Telecommunication
Media & Entertainment
Retail & Ecommerce
Regional Outlook (Revenue, USD Million, 2014 - 2025)
Middle East & Africa
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Artificial Intelligence (AI), Virtual Reality (VR), and Augmented Reality (AR) solutions are anticipated to substantially contribute while responding to the COVID-19 pandemic and address continuously evolving challenges. The existing situation owing to the outbreak of the epidemic will inspire pharmaceutical vendors and healthcare establishments to improve their R&D investments in AI, acting as a core technology for enabling various initiatives. The insurance industry is expected to confront the pressure associated with cost-efficiency. Usage of AI can help in reducing operating costs, and at the same time, can increase customer satisfaction during the renewal process, claims, and other services. VR/AR can assist in e-learning, for which the demand will surge owing to the closure of many schools and universities. Further, VR/AR can also prove to be a valuable solution in providing remote assistance as it can support in avoiding unnecessary travel. The report will account for Covid19 as a key market contributor.