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Shift to cloud delivery continues within the $113bn Data, AI & Analytics market

April 21 2021
by Greg Zwakman, Matt Aslett


Introduction


According to a recent analysis of the Data, AI & Analytics market, the combination of technologies used by companies to store, process and analyze data represented a $113bn market in 2020, and is growing thanks to new approaches emerging to more efficiently store and process data, as well as to provide access to those that need to analyze the data and gain business insight. The market is not immune to the fallout of the COVID-19 pandemic, but the current impact and future implications on specific segments of this multifaceted market vary widely. Perhaps the most prominent impact can be seen in the growing adoption of cloud services rather than on-premises deployments, a trend that has been underway for some time and which we believe was accelerated by the pandemic.

The 451 Take

The use of on-premises, noncloud infrastructure for data management and analytics has been in decline for some time, and our survey indicates that the decline is accelerating. While 43% of respondents use on-premises, noncloud infrastructure for data management and analytics workloads today, that is expected to be just 26% two years from now. We see a similar transition, with the percentage of cloud revenue increasing from just over 30% in 2020 to just under 50% by 2025.

A large and growing market


We expect the Data, AI & Analytics market to grow from $113bn in 2020 to just over $160bn in 2025, a CAGR of 7.5%. The market is top-heavy, with vendors generating over $1bn in annual revenue as of 2020 accounting for just under 90% of the total market. However, the strongest growth is not being enjoyed by the industry giants – we expect to see the most significant growth from vendors ranked between 10-50 based on their 2020 revenue.

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Figure 1: Data, AI & Analytics Market Forecast and Vendor Revenue Distribution 451 Research

Shift to cloud evident in demand and supply-side data


As mentioned above, our survey indicates that the percentage of respondents using on-premises, noncloud infrastructure for data management and analytics workloads is expected to decline from 43% today to 26% two years from now. PaaS and SaaS are expected to be the biggest winners, growing from 20% to 31% and 35% to 42%, respectively, while growth is also anticipated for hosted private cloud (37% to 38%) and IaaS (26% to 31%).

This transition from on-premises to cloud is also reflected. While the level of cloud adoption and growth varies across the 382 vendors we are tracking and the six segments included in our analysis, in aggregate, we expect the cloud component of the market to witness a 16.8% CAGR through 2025, with the on-premises market expected to grow at a 2% rate over the same time period.

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Figure 3: Cloud Data, AI & Analytics Market Forecast and Vendor Revenue Distribution 451 Research
451 Research leverages a deep knowledge of vendors and relationships within the data platforms and analytics market, resulting in a proprietary forecast based on a bottom-up analysis of 382 vendors' current revenue and growth expectations through 2025.

Included in the report is a view of the competitive landscape for each of the six market subsectors included in our analysis (Analytic Data Platforms, Data Management, Events/Stream Processing, Distributed Data Grid/Cache, Operational Databases and Data Science & Analytics).