The global natural language processing (NLP) market generated revenue of $8.3 billion in 2018, which is expected to reach $22.9 billion by 2024, exhibiting a CAGR of 19.7% during the forecast period (2019–2024). APAC would witness fastest growth during the forecast period. This can be attributed to wide adoption of AI technologies in the region and rise in research and development (R&D) initiatives by industries and collaborations with governments of other countries.
Factors Governing Natural Language Processing Market
Deployment of semantic search platforms is another key trend observed in the global natural language processing market. Semantic search refers to the attempts of a search engine to produce most accurate results by understanding query context and searcher’s intent and matching the stored data with the input received. Traditional keyboard-based search platforms leave most of the data unstructured, further making its analysis difficult. This has led to the development of semantic platforms that leverage NLP, AI, and ML technologies.
NLP enables machines to decode human inputs and analyze unstructured data to provide filtered information to enhance human–machine interaction. The results, so obtained, are more specific and appropriate. Technological solutions such as Siri, Alexa, and Cortana are few examples where NLP is used to enhance the semantic search experience.
Globally, more than two quintillion bytes of data is generated every day in structured and unstructured forms. Organizations seek for addressing business-related problems through the analysis of extracted data. Through traditional methodologies, the organizations obtain structured data (spreadsheets and relational databases); however, unstructured data obtained through social media, videos and images, and documents and blogs, is difficult to manage and, thus, often remains unused.
To ensure the optimum use of structured and unstructured data, the companies are adopting NLP solutions. NLP technology through its various applications, including speech processing, automatic translation, sentiment analysis, and natural language generation (NLG), assists organizations in prioritizing the extracted data for business purposes. Hence, the rising need for managing large volumes of data is shifting the focus of organizations toward NLP solutions.
Several industries are adopting automated solutions to enhance human–machine interactions to remain competitive. Moreover, these solutions help customers get quick answers to their queries through seamless conversations. NLP-integrated solutions, such as chatbots, analyze inputs from customers and automatically provide appropriate answers. NLP technology does so by matching the input with stored data or by transferring the request to a customer service agent to proceed with the conversation. Such feature of the technology helps organizations to interact with potential clients and enhance user experience, which, in turn, leads to the growth of the natural language processing market.
Natural Language Processing Market Segmentation Analysis
Based on type, the statistical category held the largest share in the natural language processing market in 2018. This is mainly attributed to the advantages of statistical NLP solutions over traditional rule-based NLP solutions, which boost their demand across the world.
In terms of deployment, the hybrid cloud category is expected to exhibit the fastest growth in the natural language processing market during the forecast period. This is owing to the fact that several organizations have started deploying AI-based technologies for data translation, and it is expected that these would prefer segregating data on private and public clouds based on confidentiality and importance.
When segmented on the basis of component, the services category would witness faster growth in the natural language processing market during the forecast period. This can be attributed to the fact that since NLP is a new technology, the demand for training services is increasing.
In terms of application, the machine translation category held the largest share in the natural language processing market in 2018. This is mainly due to the rising demand in organizations for solutions that can facilitate translation of text into multiple languages.
The BFSI industry held the largest share in the natural language processing market in 2018. To utilize unstructured data available in huge volumes, financial service providers are adopting NLP solutions to analyze data, make effective decisions, and provide quality products and services to their customers, which, in turn, increase the growth of the market.
Geographical Analysis of Natural Language Processing Market
Globally, the North American natural language processing market held the largest share in 2018. This is due to the increasing data volume across industries, rising demand for enhanced customer experience, and large investments in research and development (R&D) projects of AI-based technologies by various industries, nonprofit organizations, and academia. The U.S. held larger share in the North American market in 2018. This is mainly ascribed to the large number of financial institutions in the country that have deployed NLP solutions for efficient business operations.
The natural language processing market is expected to witness the fastest growth in the APAC region during the forecast period. The APAC market is majorly driven by technological advancements in China, India, Japan, and other countries, with increasing number of small and medium sized enterprises (SMEs) and customer contact centers, and adoption of cloud-based applications and services. In the APAC market, China accounted for the largest share in 2018, as the country is working on several innovation programs for the deployment of AI technologies, such as NLP, machine learning, and deep learning.
Competitive Landscape of Natural Language Processing Market
The global natural language processing market is highly competitive in nature, with the presence of several players, including Alphabet Inc., SAS Institute Inc., International Business Machines (IBM) Corporation, 3M Company, Verint Systems Inc., Apple Inc., Microsoft Corporation, Hewlett Packard Enterprise (HPE) Company, Dolbey Systems Inc., Genpact Ltd., and AWS Inc.
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