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The natural language processing (NLP) market size is estimated to grow by USD 53.50 billion at a CAGR of 30.22% between 2022 and 2027. Market expansion hinges on several factors, notably the increasing appetite for Natural Language Processing (NLP) applications, advancements in machine learning and deep learning algorithms, and a rising demand for automated language processing. The surge in NLP applications reflects a broader trend toward automation and AI-driven solutions across industries. Advancements in machine learning and deep learning have bolstered the capabilities of NLP, enabling more sophisticated language processing tasks. Moreover, the growing need for automated language processing, driven by the increasing volume and complexity of textual data, is propelling the adoption of NLP solutions. These factors collectively drive the growth of the market by addressing the demand for more efficient and effective ways to process and analyze textual data.
It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic natural language processing (NLP) Market data from 2017 to 2021.
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This market report extensively covers market segmentation by component (solution and services), deployment (on-premises and cloud), and geography (North America, APAC, Europe, South America, and Middle East and Africa).
The market share growth by the solution segments will be significant during the forecast period. Solutions witnessed considerable growth and adoption in 2022, being a key component in the market. The processing, analysis, and understanding of human language are made possible by a variety of technologies and tools that make up NLP solutions.
The solution segments showed a gradual increase in the market share of USD 3.79 billion in 2017. The market is driven by increased demands for automation and data-driven decisions, as well as the need to gather information out of all kinds of unstructured data. Another boost for market growth is continued innovation in the fields of Machine Learning, Deep Learning, and Natural Language Understanding Algorithms. Such factors will increase the segment growth during the forecast period.
The market witnessed significant demand in the on-premises segment in 2022. On-premises deployment of NLP involves the installation and use of these systems within the premises and infrastructure of an organization, providing more control, data privacy, and security. Due to regulatory compliance requirements and the need to manage sensitive data, several businesses, including those operating in sectors like finance, healthcare, and government, choose on-premises NLP solutions. Despite the growing popularity of cloud solutions, on-premises deployment remains preferable for end NLP users where data sovereignty, minimal latency processing, and customization are critical, nor is it an option because the cloud has become more popular. Such factors will increase segment growth during the forecast period.
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APAC is estimated to contribute 27% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Another region offering significant growth opportunities to companies is North America. The market is expanding significantly in North America. Due to the dominance of the region in the market, many leading technology corporations and cutting-edge research institutions are headquartered in the region. Due to the presence of major industrial companies and the widespread use of NLP in a variety of industry verticals, including healthcare, banking, and customer services, the US, in particular, has a sizable market share.
The market is evolving rapidly with advancements in text-analyzing computer programs and enterprise solutions enhancing business operations and customer experience. Cloud-based NLP solutions are reducing overall costs while offering scalability and enabling predictive analytics. Deep learning models are improving the understanding of human language from text or voice data in various unstructured data formats, including HTML, webpages, and social media. NLP techniques like Named Entity Recognition (NER) and summarization are extracting concepts, keywords, and categories while analyzing semantics and emotions for more accurate text classification. However, challenges remain, such as the lack of contextual understanding.
The growing demand for NLP applications is driving growth in natural language processing. The market is being significantly influenced by the increased demand for NLP applications in sectors like healthcare, e-commerce, and customer services. NLP is used by e-commerce platforms to improve end-user experience and sales through sentiment analysis, chatbots, and personalized suggestions.
However, NLP powers virtual assistants and automated chat systems in customer services, providing effective and tailored interactions with customers. The growing demand for NLP applications is expected to fuel the growth of this market over the forecast period because businesses realize that they can increase their operational efficiency and customer satisfaction by using NLP, thereby giving them an edge in terms of experience.
The advancements in conversational AI are a primary trend in the market. More complex conversational AI models that can understand context, sentiment and the nuances of human language have been created thanks to improvements in deep learning, machine learning, or natural language processing algorithms. Using simulated human conversation, businesses can improve the satisfaction of customers, reduce and streamline time-consuming tasks, as well as offer more efficient and personalized services.
Improvements in deep learning, machine learning, and NLP algorithms have helped create more complex conversational AI models that can comprehend context, sentiment, and the subtleties of natural human language. Businesses may be able to improve customer satisfaction, automate tedious and time-consuming activities, and provide more effective and individualized services by simulating human-like conversations. This has led to the adoption and expansion of conversational AI in the market. Hence, such trends are expected to drive the growth of the market focus during the forecast period.
The ambiguity and complexities of natural human language are major challenges in a market restrain. The inherent ambiguity and complexities of natural human language present difficulties in achieving accurate language processing, which is one of the major challenges faced in the market. It can be difficult for NLP systems to correctly recognize and interpret the intended meaning in natural language, which is extremely subtle, context-dependent, and open to various interpretations.
Moreover, the variations in the dialects, use of slang and proverbs as well as cultural references add to the complexity of man's natural language. The Ambiguity in Natural Human Language raises the problem of incorrect interpretations and errors in NLP models and applications. Cutting-edge techniques, algorithms, and language experts are needed to handle the nuances of real human languages to enable more precise and contextually relevant natural language processing systems. Hence, the ambiguity and complexity of natural human language is a challenge, which is expected to hinder the growth of the market in focus during the forecast period.
The Market is fragmented in nature. Some significant players include 3M Co., Alphabet Inc., Amazon.com Inc., Apple Inc., Baidu Inc.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Cerebras Systems Inc., Edifecs Inc., Hewlett Packard Enterprise Co., Inbenta Holdings Inc., International Business Machines Corp., IQVIA Inc., Liveperson Inc., Meta Platforms Inc., Microsoft Corp., NetBase Solutions Inc., OpenAI L.L.C., Oracle Corp., SAP SE, SAS Institute Inc., and SoundHound Inc.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2023 to 2027, as well as historical data from 2017 to 2021 for the following segments.
The market is flourishing with the rise of voice-operated GPS systems and digital assistants. Speech-to-text dictation software and customer service chatbots are revolutionizing computational linguistics and linguistics, enabling word sense disambiguation in various text documents including domain-specific discourse models, legal contracts, and news articles. The advent of AI technology has opened doors for opportunity in Generative AI and advanced language models like GPT-3, facilitating content generation, marketing, and journalism. With a focus on personalized recommendations and multilingual proficiency, NLP technology is reshaping English for an inclusive global audience.
Furthermore, verticals such as customer service and compliance process automation are integrating NLP for cloud solution integration and enhancing customer experiences. Managed services and MSPs are leveraging NLP to streamline core business procedures and address IT infrastructure and software-related issues through a subscription model with Service-Level Agreement (SLA). The market's growth is further fueled by advancements in ML and deep learning technologies, optimizing business processes and enhancing call center services. High adoption of digital technologies and large-scale investments are driving the demand for AI-enabled infrastructure and innovative solutions in the NLP space.
Market Scope |
|
Report Coverage |
Details |
Page number |
166 |
Base year |
2022 |
Historic period |
2017 - 2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 30.22% |
Market growth 2023-2027 |
USD 53.50 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
30.0 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
APAC at 27% |
Key countries |
US, China, India, Germany, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
3M Co., Alphabet Inc., Amazon.com Inc., Apple Inc., Baidu Inc., Cerebras Systems Inc., Edifecs Inc., Hewlett Packard Enterprise Co., Inbenta Holdings Inc., International Business Machines Corp., IQVIA Inc., Liveperson Inc., Meta Platforms Inc., Microsoft Corp., NetBase Solutions Inc., OpenAI L.L.C., Oracle Corp., SAP SE, SAS Institute Inc., and SoundHound Inc. |
Market dynamics |
Parent market analysis, market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for market forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Component
7 Market Segmentation by Deployment
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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