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Analytics as a Service (AaaS) is a type of solution that empowers businesses with a range of analytical functionalities, streamlining data integration and analysis processes. Over recent years, the industry has experienced significant growth, with projections indicating further expansion in the coming decade.
With the increasing adoption of the AaaS model across various sectors, the global market for AaaS reached US$8.8 billion in 2022. Forecasts suggest a robust trajectory, with expectations for the market to soar to US$85.1 billion by 2032. This expansion reflects a compound annual growth rate (CAGR) of 26.4%.
To delve deeper into AaaS's current market standing, explore its recent valuation and anticipated growth trajectory, shedding light on the industry's evolving market size.
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- The Analytics as a Service global market is projected to generate US$85.1 billion by 2032.
- The AaaS market is expected to reach a valuation of over US$110 billion by 2034.
- AaaS’ market value increased rapidly, from over US$4 billion in 2019 to almost US$10 billion in 2023.
- Global demand for AaaS is anticipated to reach US$69 billion by 2028.
- North America accounted for 43% of the total AaaS market share in 2022.
- Over 75% of the companies in North America use AaaS.
- The US AaaS market has a predicted CAGR of 25.9% between 2023 and 2032.
- The German AaaS market is expected to expand at a CAGR of 26.50%.
- Asia Pacific is the fastest-growing nation, with roughly 25% market growth per country.
Big Data to Big Insights: Tracking the Growth of AaaS
The escalating demand for real-time data insights to inform business decisions fuels the swift expansion of the AaaS market. From a market value of US$4.2 billion in 2019, the AaaS industry experienced exponential growth, surging to US$9.5 billion by 2023. This growth trajectory is underscored by a compound annual growth rate (CAGR) of 22.70%.
The following figure depicts the remarkable ascent of AaaS from 2019 to 2023 and its expected growth:
The global AaaS market has grown significantly due to several factors. Here are a few of the driving elements:
- AaaS can handle enormous amounts of data effectively, keeping companies adaptable to expanding data requirements.
- It allows businesses to make informed decisions using Artificial Intelligence (AI) and Machine Learning (ML) developments to provide actionable information.
- AaaS improves accessibility and agility by facilitating a smooth transition to cloud-based analytics.
- Data scientists, analysts, business intelligence specialists, and decision-makers who need advanced data analysis capabilities tend to use AaaS more.
- Companies have been able to swiftly implement analytics solutions without having to commit to significant hardware expenses.
In the following section, you can read more about leading companies’ market share and the AaaS market’s regional breakdown.
AaaS Market Share and Growth
The AaaS industry, propelled by the surging popularity of cloud computing, stands poised for rapid growth in the foreseeable future. Here’s a quick look at the market share by region as of 2022:
1. Over 75% of businesses are employing AaaS in North America.
(Yahoo Finance, Precedence Research)
In 2022, North America boasted the most significant share of revenue, propelled by its robust foundation and swift acceptance of software innovations, catapulting the region to the forefront of the AaaS market. With over 75% of businesses already leveraging these solutions and planning further investments, the region's dominance is undeniable.
The AaaS market in the US alone surged to US$1.91 billion in 2022, poised to skyrocket to US$19.07 billion by 2032. Forecasts predict substantial growth over the next decade, with an anticipated compound annual growth rate (CAGR) of 25.9%.
The region’s AaaS market growth is mainly due to its reputation for technological innovation, fostering an environment where analytics solutions flourish. The surge in the adoption of technology and the presence of prominent businesses continue to drive this significant expansion in the region.
2. In 2022, Europe and Asia Pacific accounted for 27% and 23% of AaaS total market share, respectively.
(Globe News Wire, Market Wide Research, Precedence Research)
The European region commands a significant portion of the industry's market share, comprising countries like Russia, Germany, France, and the United Kingdom. Meanwhile, the Asia-Pacific region is expected to lead the growth of the AaaS market compared to other regions.
Germany: Leading the AaaS Charge in Europe
The German AaaS market is projected to grow at a compound annual growth rate (CAGR) of 26.50%, positioning it as a frontrunner in the region's expansion. This growth is fueled by the country's embrace of Industry 4.0 initiatives and its strong focus on high-quality manufacturing.
Furthermore, Germany's commitment to renewable energy has accelerated the adoption of AaaS in the energy sector. Businesses utilize analytics to boost productivity, forecast maintenance needs, and optimize their operations for greater efficiency.
Asia-Pacific Region: Leading the AaaS Revolution
The Asia-Pacific region, spanning countries like China, Japan, South Korea, India, Australia, Taiwan, Indonesia, Thailand, and Malaysia, is witnessing a rapid surge in the AaaS industry. These nations have swiftly adopted cutting-edge technologies such as cloud computing and advanced analytics tools.
Australia, China, and Japan are projected to drive significant expansion in the AaaS market, with impressive compound annual growth rates (CAGR) of 28.80%, 25.80%, and 24.70%, respectively. Thanks to its rapid digitalization and a cultural shift towards data-driven decision-making, the Asia-Pacific region is poised to lead global growth in AaaS.
The following subsection will explore the prominent players in the AaaS sector and analyze their current market positions.
AaaS Market’s Key Players
Key players in the AaaS industry comprise renowned names such as IBM, Oracle, SAS Institute, Google, and Amazon Web Services. These industry leaders have solidified their positions by delivering superior analytics solutions and notable revenue growth.
The following are the leading manufacturers of Analytics as a Service:
3. The AaaS market’s top players include AWS, which accounted for more than 30% of the market share in 2023.
(Market.us, Reuters, 6Sense, Acuity)
Over 1 million people use Amazon Web Services (AWS) globally. It provides various analytics services, like Amazon Redshift and Amazon Quicksight. AWS launched the Advanced Query Accelerator (AUQA) for the Amazon Redshift service in 2019, enabling data warehouses to operate faster.
With a roughly 33% market share, AWS was the most prominent cloud provider globally at the beginning of 2023. However, AWS's market share fell to 32% in the last quarter of the year due to an unexpected drop in share prices.
Here’s a look at the other key players in the industry:
International Business Machines (IBM)
IBM is a well-known player in the AaaS industry because of its extensive IBM Analytics Service. It is a powerful data preparation, exploration, and predictive modeling tool.
Despite holding less than 10% of the market, IBM is increasing its insights for AaaS growth. The company is actively growing its analytics portfolio through acquisitions and new product development to increase its market share.
Oracle
Oracle is a significant contender in the AaaS arena. The Oracle Analytics Cloud Service offers a comprehensive suite of analytics tools and solutions and extensive database administration expertise.
The company experienced a roughly 4% increase in market share, driven by heightened demand for its cloud products from firms leveraging Artificial Intelligence. Oracle's foray into cloud computing proved lucrative, exemplified by its acquisition of Cerner, a leading provider of electronic medical records.
SAS Institute
SAS Institute provides an AaaS solution known as SAS Analytics in the Cloud and a suite of exceptional analytics tools and services. With a 12.1% global market share, SAS is prominent in the analytics software industry, ranking third behind IBM and Microsoft.
Specializing in business intelligence, data visualization, and advanced predictive analytics tools, SAS is renowned for its software offerings. The company's flexibility and robust capabilities enable it to address diverse data analysis requirements effectively.
Among the many analytics tools available on Google's cloud platform, BigQuery is the most advanced data warehousing and analysis tool. It dominates the data visualization space with a 2.11% market share.
The trends and predictions for the AaaS industry, as well as the developments in the market over the coming years, are covered in the next section.
4. Global demand for AaaS is anticipated to reach roughly US$69 billion by 2028.
(Statista, Information Week, Technavio, Impactful Insights, Global Growth Insights)
The AaaS market will reach US$68.9 billion globally in five years. The pay-as-you-go model is expected to grow in popularity across industries, including telecom, government, retail, healthcare, and insurance.
Here are key insights on what to expect from the industry:
Prediction #1: AI and ML will transform analytics with cloud solutions.
Integrating Artificial Intelligence (AI) and Machine Learning (ML) technologies, which automate data analysis for quicker, more accurate predictions, is a significant trend in analytics. There has also been a noticeable shift toward cloud-based analytics solutions, which are highly valuable for their affordability, scalability, and accessibility.
Alex Manders, a partner from ISG, says that corporate procedures can be streamlined to increase productivity and performance by merging generative AI with data stored in the cloud.
“This integration ensures that processes are continuously refined based on real-time data, leading to streamlined workloads, improved resource allocation, and enhanced overall business performance.”
-Alex Manders
Prediction #2: IoT Analytics will significantly influence industry market growth.
Another essential aspect propelling market expansion is the increasing use of IoT analytics in enterprises. An organization’s physical assets are tracked and managed through key technologies like RFID, sensors, barcodes, and GPS.
Prediction #3: The surge in data from social media will drive demand for AaaS.
Social media analytics requires data analysis to fully understand the implications of social conversation data and make strategic use of it. The task includes:
- Monitoring conversations
- Evaluating the effectiveness of campaigns
- Determining how social media affects corporate goals
The increasing amount of structured and unstructured data on many platforms due to the widespread use of social media apps has raised the demand for AaaS.
Prediction #4: There will be a boost in data governance and security against data breaches.
Data breaches have seriously disrupted 75% of businesses over the years. In the face of growing worries about security breaches and privacy, AaaS providers prioritize safe data processing and adherence to international privacy laws.
Setting data protection as a top priority promotes a culture of trust among stakeholders and customers. This is among the reasons behind the AaaS industry’s goal to emphasize security.
💡Did You Know?
Netflix, which has roughly 700 million viewers, is committed to data analysis. It analyzes data, knows its audience, spots threats, and takes advantage of opportunities by utilizing machine learning and predictive analytics, which saves the company US$1 billion annually in retention costs.
Conclusion
The Analytics as a Service industry is expanding rapidly. By 2034, the AaaS market will be worth more than US$110 billion. It demonstrates exponential expansion driven by worldwide acceptance, competitive trends, and technological advancements.
AaaS offers a setup that enables clients to use specific analytics software according to need, which can be less labor-intensive and more affordable. This particular reason is one of the primary drivers of the rapid expansion of the AaaS sector that will persist in the upcoming years.
Frequently Asked Questions
How big is the analytics service market?
In 2023, the global Analytics as a Service (AaaS) market was valued at US$9.5 billion—the demand will reach over US$100 billion globally in 2032.
How big is the market for data analytics?
The data analytics market will grow at a compound annual growth rate (CAGR) of 24.17%, from its 2022 valuation of US$31345.89 million to US$114877.14 million by 2031.
What percentage of companies use data analytics?
In 2023, cloud computing became the preferred technology for investments in data and analytics, as seen by the measurable benefits reported by 91.9% of enterprises.
