The last few years have felt both lightning-fast and glacially slow. COVID-19 created a strange time vortex that swallowed businesses and employees whole. On one hand, it feels like nothing has changed in the past two years. Many of the challenges that loomed over us in 2022 still confront us today: inflation, rising interest rates, supply issues, economic uncertainty, and so on.
On the other hand, everything feels different. Generative AI has taken the world by storm and is transforming every area of work. We also have another advantage we didn’t have two years ago: hindsight.
Gartner recently released its Market Share Analysis for Analytics Platforms in 2022 with an in-depth look at what last year’s market shifts mean for the present year. The results were very promising for analytics, and there are gems of predictions in this information to guide us into 2024.
Despite persisting economic uncertainty and budget constraints, analytics platforms continued to exhibit strong growth, with the market rising 12.9%. There were other interesting takeaways as well. Location intelligence saw a contraction, likely because analytics leaders are leaning on existing software investments for these capabilities. One of the most standout data points was the explosive growth of data science and AI platforms (19.67%). Based on this data and my own observations, I have a few predictions for 2024 on where analytics is going next.
Prediction #1: Analytic platforms will rise in priority for businesses
Typically, markets that are very new tend to grow at a rate of 30 to 40 percent per year. The fact that analytics and BI platforms still grew 12.91% in 2022, a year shadowed by economic uncertainty and rising interest rates, speaks volumes. The analytic market was growing by double digits when many sectors outside of tech were wallowing in the single digits. Year after year, organizations are still earmarking budgets for these platforms.
Will this growth continue? I fully expect it to. In fact, I expect it to accelerate — for several reasons. First, generative AI is on every executive’s wish list. The prerequisite to strong and trustworthy AI outcomes is quality data; analytics platforms are essential for that quality data element. Analytics and BI platforms will piggyback off the explosive growth in AI and machine learning (ML) technology.
How Analytics and BI Platform Growth Compares to Other Markets
- Application architecture, development, integration, and platforms – 13.8%
- Consulting services – 14.0%
- IT Services – 13.9%
- ERP – 8%
- Infrastructure Implementation & Managed Services – 1.7%
- Security Software – 22.5%
- Business Process Services – 5.6%
Source: Market Share Analysis: Business Process Services, Worldwide, 2022, Gartner
Second, analytics is top-of-mind on enterprise agendas due to digital transformation initiatives. As companies and organizations advance in their digital transformations — digitizing more systems, having more systems producing numbers and metrics, and capturing data — the next logical thing is to put that data to work and create value for the organization. So, businesses will increasingly want to invest in platforms that help them maximize their data and navigate the current slowdown.
Finally, I expect demand for analytics platforms to grow due to demand across the business. As these platforms become easier to use and more accessible to business users, it’s no longer just technical leaders spearheading demand. Organizations want more and more employees to be dangerous with analytics, using analytics throughout their day-to-day work to improve their efficacy.
Prediction #2: Security improvements will encourage widespread adoption of cloud-based analytics platforms
The appetite for cloud-based analytics platforms will grow in 2024. More and more businesses, including Fortune 500 organizations, are figuring out ways to create a hybrid infrastructure and leverage the speed and power of the cloud while still taking advantage of their on-prem infrastructure.
The limiting factor to cloud adoption for many years has been data security. Organizations feared loosening their grip on their valuable data stored on their on-prem servers — and for good reason. But many organizations, including Alteryx, are meeting customers where they’re at, creating cloud data storage and handling that’s safe, secure, and fits customers’ needs. For example, our Private Data Handling gives organizations the best of both worlds with on-premises or customer-managed data environments. In other words, features like these are data processing clusters that customers can run on their own infrastructure to keep data workloads within their own networks, helping keep customers’ data safe and secure.
Prediction #3: Generative AI will be a must-have for future investment
Boards are in demand mode, and anytime you have a board demanding that technology be adopted and implemented, it’s a strong indicator that you’re going to have conversations with vendors to source new technology. Ripple effects will ensue across the analytics space.
First is the old mantra of analytics: “garbage in, garbage out.” Organizations need high-quality data to get good results from their gen AI and ML solutions. Organizations will likewise need analytics platforms to create high-quality data and verify that their data and outputs are trustworthy.
Second, generative AI within analytics unlocks many automation use cases that required significantly more time and effort to execute in the past. For example, creating a self-service knowledge management chatbot. So, instead of having help desk articles on your help desk, you could now engage your CDAO or your analytics leader to help build a chatbot that is trained on all the help desk documentation. Then anybody in the business could chat with that bot to get answers about anything, whether it’s HR, policy, computer issues, etc. So, it unlocks new automation opportunities in analytics, and it makes analytics applicable to things that just weren’t achievable before generative AI.
Finally, generative AI makes analytics tools easier to use. Creating an analytic process will become as simple as typing a request in your natural language. For years, analytics had many barriers to adoption due to coding language requirements, etc. But now, with natural languages, English will likely become the hottest coding language. So, we’ll see more people be able to take advantage of the power of analytics.
The future is bright for analytics
Despite economic uncertainty, analytics is set to continue its upward trajectory into 2024 and beyond. Organizations have realized that the more employees that can get into analytics, the more information and insights there are to empower frontline workers, creating a smarter organization that can capitalize on the value of its data.
In the years ahead, we’ll continue to see analytics become more in demand and accessible. The future of analytics is bright, and businesses that embrace the trends listed in this article will be well-positioned to thrive.