Predictive analytics is business intelligence technology that produces a predictive score for each customer or other organizational element. Predictive analytics uses a variety of statistics and modeling techniques, and utilizes data mining, business intelligence tools, and machine information, to make predictions. The emergence of enormous amount of structured and unstructured data and ground-breaking technology deployments are the major drivers for the predictive analytics market.
The global predictive analytics market, valued at USD 2.08 billion in 2012, is expected to see strong growth at 17.8% CAGR during 2013 to 2019. Organizations are collecting increasing amount of data, and predictive analytics software is one of the crucial tools that companies can use to achieve actionable information from this data. Data, and the utilization and management of the same, are increasingly becoming areas of competitive advantage. Hence, predictive analytics is one of the core technologies that enterprises are adopting to be able to compete in the market.
Predictive analytics is used across different industry verticals such as banking and financial services, insurance, government, pharmaceutical, telecom and IT, retail, transportation and logistics, healthcare, and energy, among others. Global predictive analytics market in 2012 was dominated by the banking and financial services segment, which accounted for 16.8% revenue share. Banking and financial services are progressively deploying predictive analytics as it facilitates organizations to analyze and predict several factors related to cost, revenue, and reporting on the basis of big data.
North America is expected to remain the largest market for predictive analytics followed by Europe. North America’s revenue share in 2012 was estimated at 55.9%. Europe is expected to see fastest growth in the predictive analytics market as the region is expected to adopt this technology on a major scale in the forecast period. However, lack of skilled resources, cost and complexity of software, and tremendous volume, diversity and velocity of data growth are hindering the growth of this market.
The unprecedented shift of business intelligence to predictive analytics offers new-fangled opportunities to the major players and new startups in this market. Some of the major players in this market include International Business Machines Corporation (IBM), SAS Institute Inc, Microsoft Corporation, SAP AG, Tableau Software Inc., Information Builders, Fair Isaac Corporation (FICO), Teradata Corporation, Acxiom Corporation, and TIBCO Software Inc., among others.