How Large Is IBM’s Cognitive Solutions Business’ Total Addressable Market?

by Trefis Team
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In addition to offering a broad portfolio of insight discovery tools, IBM’s (NYSE:IBM) Cognitive Solutions division includes Watson (an enterprise grade AI platform) and Watson OpenScale technology (a platform to enable AI adoption). Through Watson’s extensions, IBM also offers vertical and application specific solutions such as Watson Health and Watson Internet of Things (IoT).

What Is Cognitive Computing?

Cognitive computing refers to the paradigm leveraging artificial intelligence (AI), natural language processing (NLP), machine learning (ML) and other adaptive and predictive methods of computing that attempts to build intelligence to drive efficiencies in systems and processes. In addition to existing business knowledge and data, cognitive computing also leverages dark data (data that is not actively used in decision making, mostly stored in a passive state) to deliver actionable business insights.

How Big Is IBM’s Cognitive Solutions Opportunity?

For fiscal 2019, IBM’s Cognitive Solutions business reported total revenues of $18.5 billion, contributing 22% of IBM’s total revenue of $84.5 billion. IBM is one of the largest players in the global cognitive computing market, with a market opportunity that spans AI, NLP, ML and other adaptive computing techniques. While the estimates for these market sizes vary significantly, we estimate IBM’s opportunity size by way of the size of the global data processing costs.

We have created an interactive dashboard analysis on Size Of The Global Cognitive Solutions Market Opportunity. You can modify any of the key drivers to visualize the impact of changes on the company’s revenue estimates, and see all of our Technology company data here.

Per Cisco, annual global IP traffic is expected to reach 4.8 ZB in 2022 from 1.5 ZB in 2017. We estimate the price of running intelligent analyses on data to be around $0.2o per GB by 2022. With this in mind, we estimate the size of the compute market to be around $1 trillion by 2022.

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