AI Training Services

Part
01
of two
Part
01

Market Size and Market Growth - AI Training Services

While no definitive statistic exists for the size of the Artificial Intelligence training services market in the U.S., a look at the biggest players in the industry suggests that the market is currently at least $746 million. Given the lack of publicly available information about the industry, it is possible that the market is bigger than this. However, it can be reasonably assumed that the market is not any smaller.

Meanwhile, the overall global market for AI training services is likely at least $820 million, based on available evidence from the largest players in the industry. U.S. companies make up just over 90% of this market, according to an analysis of the current market positions of the U.S. companies among the industry's biggest players.

Furthermore, a look at publicly available statistics about the AI market in general suggests that the $820 million figure for the global market is a reasonable approximation, lending credence to the $746 million figure for the U.S.

Looking ahead, evidence suggests that the AI training services market is likely to grow substantially over the next several years. For instance, one set of figures point to an annual growth rate of 47.5% during the period 2017 to 2021.

Estimating Market Size


No pre-existing estimate of the size of the AI training services market could be found. Therefore, we estimated the market size using available statistics. Specifically, we looked at the publicly-available revenue figures for the biggest players in the sector and projected the overall size of the market using these revenues as a benchmark.

In order to calculate the market size, we looked at five major players in the AI training services market: Crowdflower, Appen, Applause, Lionbridge and Amazon Mechanical Turk (also known as Amazon M-Turk). For the first four of these, the revenues figures are publicly available, provided by Owler:

CrowdFlower: $100 million
Appen: $74 million
Applause: $68.9 million
Lionbridge: $556.6 million

The revenue figures for Amazon M-Turk have not been disclosed.

However, a Tech Republic article from 2016 noted that the combined revenue of Amazon M-Turk and CrowdFlower was $120 million in 2013. (Tech Republic drew this information from a World Bank report).

The annual growth rates for these companies are not publicly available, making it difficult to project back what CrowdFlower's likely revenue figure was for 2013. However, even assuming 0% growth over the last few years, that would give Amazon M-Turk an annual revenue figure of at least $20 million.

Assuming the $20 million figure for Amazon M-Turk, this would give an annual revenue total for the five biggest players in the sector of $819.5 million, once the five individual revenue numbers are added together. This would be the lowest possible figure for the size of the market.

We can assume that there is at least some number of smaller players in the sector, making a rounding to $820 million for the market floor a reasonable assumption.

Meanwhile, there is outside evidence to suggest that this figure is a fairly reasonable estimate.

A Venture Beat article from December 2017 quotes figures from Tractica estimating the 2016 market for AI technologies and AI-driven services to be about $1.38 billion. Assuming the market for AI training services is a sub-set of this market, the figure of approximately $820 million becomes a reasonable estimate.

For determining the U.S. market, approximately 90.9% of the revenue generated by the biggest players in the industry came from companies headquartered in the U.S. Only Appen, headquartered in Australia with $74 million in annual revenue, came from outside the U.S. Using the 90.9% figure as the U.S. market share, and using $820 million as the estimate of the global market, this would imply a U.S. market size of $746 million.

Massive Growth Expected


There is significant evidence that the market for AI training services is likely to expand dramatically in the coming years. An estimate published in The Journal points to a 47.5% compound growth rate in the use of AI in the educational sphere over the period from 2017 to 2021. Assuming that this growth rate would hold for the industry as a whole and using $820 million as a base, this would put the market for AI training services at about $3.8 billion by 2021.

There is reason to believe this growth projection could be conservative. For instance, the same Tractica data used in Venture Beat article places the market for AI technologies and AI-driven services at $59.75 billion by 2025. Remember, this is compared to a market size of $1.38 billion for 2016. This would mean the market would be 43.3 times bigger by the middle of the next decade.

If this growth rate hold for the AI training services market, that would imply a global market size of about $35.5 billion by 2025 (43.3 times bigger than the estimate of $820 million in 2017). Assuming the 90.9% U.S. market share, that would put the U.S. market at about $32.3 billion.

Conclusion


No decisive figures currently exist estimating the size of the AI training services market in the U.S. However, using the estimated revenue of the five biggest players in the industry, a market size of at least $746 million can be projected. This is based on an estimate of a global market size of about $820 million, a figure supported by other data estimating the overall size of the AI market. Meanwhile, growth rates for the industry are projected to be extremely high over the next several years. One projection puts that potential growth at 47.5%, though there is reason to believe even this tremendous growth projection might be conservative.
Part
02
of two
Part
02

Competitive Landscape - Crowdflower, Appen, Applause, Lionbridge, and Amazon M-Turk.

A competitive landscape was completed for Crowdflower, Appen, Applause, Lionbridge, and Amazon M-Turk. Details on each company's products, competitive advantage, target industries, key customers and, where available, projected growth were provided. In cases where, after an extensive search, projected growth data was not readily available other relevant data was included.

Crowdflower

According to a December 2017 report by Market Research Future, Crowdflower is one of the major key players in the sentiment analytics market. The market as a whole is projected to reach $6 billion by 2023 at "14% of CAGR between 2017 and 2023." Recent projections specific to Crowdflower were unavailable. This is likely due to the fact that this company is privately held and not required to disclose this information. However, in October 2017, the company raised $58 million and was valued at $110 million.


PRODUCTS + SERVICES

Crowdflower is a "human-in-loop AI platform" with training data and machine learning capabilities. Use cases for this platform include image annotation, search relevance, transcription, sentiment analysis, content moderation, and data collection and categorization.


COMPETITIVE ADVANTAGE

This platform is "powered by Microsoft’s industry-leading Azure Machine Learning cloud service operated." This allows Clowdflower to access the best algorithms through an easy to use drag-and-drop user interface. Humans also help machine models learn and process data faster as they work on harder cases and simultaneously improve Clowdflower's high-quality predictions.


TARGET INDUSTRIES + KEY CUSTOMERS

Clowdflower is offered to individuals or companies in any industry with data needs. The company also offers a starter, enterprise, and "Data for Everyone" plans. The latter plan is targeted toward researchers, academics, and students.

Some of Clowdflower's key customers include Spotify, eBay, American Express, Tesco, Adobe, Etsy, Stanford University, udemy, Foursquare and more. These clients show the range of industries that Clowdflower caters to and services.

Appen

Appen is estimated to earn between $0.18 to $0.22 per share over the course of the next three years with an average growth expectation of 81.9%. The company's revenue was also projected to grow from $111 million in May 2017 to $199 million in 2019 with profits estimated to reach $21 million in that same year. This figure is approximately double the company's $10 million profit reported in May 2017.


PRODUCTS + SERVICES

This company offers several services in order to improve the quality of their client's data. Appen provides ad evaluation, consultative services, data annotation, data collection, content moderation, entity verification, crowdsourcing, field testing, linguistics, geo-local evaluation, image and video data collection and search engine evaluation, query categorization, secure services, transcription, spam detection, personalization and much more.


COMPETITIVE ADVANTAGE

Appen a global leader with more than 20 years of experience in "capturing and enriching a wide variety of data types including speech, text, image, and video." The company has developed an expertise in over "180 languages and dialects" with more than 400,000 qualified contractors at their disposal.


TARGET INDUSTRIES + KEY CUSTOMERS

Appen services those in the technology, retail, healthcare, government, financial services, and automotive industries. The company has also worked with e-commerce, mobile device, and social media companies. One of their key clients is Microsoft Bing. Appen helped to improve the search quality of this search platform in different markets.

Applause

According to Deloitte's Technology Fast 500™, Applause was ranked as one of the 500 fastest growing North American companies in 2017. During this time frame, Applause experienced a 186% growth in revenue. Deloittle indicated that companies like Applause are a "strong indicator that the emerging growth technology sector will continue to deliver a strong return on investment."

In the latter half of 2017, Applause was acquired by Vista Equity Partners. The dollar amount of the acquisition was not revealed. The company previously raised $115 million in funding and had an annual revenue of about $100 million. According to CEO, Doron Reuveni, Applause is projected to become profitable in 2018.


PRODUCTS + SERVICES

This company offers software QA testing for mobile apps, websites, and other connected devices. These other devices include desktops, gaming and TV systems, IoT, payments and digital wallets, automotive, augmented and virtual reality, voice control, and in-store and location-specific experiences.

The different types of testing that are available are functional, automated, security assessment, and payment validation testing. Applause also offers user feedback that provides actionable insights on usability, customer journeys, and accessibility for those with disabilities.


COMPETITIVE ADVANTAGE

Applause takes a "human-centric, community-driven approach" to creating digital experiences that foster customer loyalty, faster innovation, and drive revenue. This approach is taken into each stage of software development and project management.


TARGET INDUSTRIES + KEY CUSTOMERS

The company works with leading brands around the world across various devices and OSs. Their target markets include retail and e-commerce, travel and hospitality, health and fitness, startups, business software, finance and insurance, media and entertainment, connected devices, and automotive industries.

Some of their key customers include major brands like Facebook, Hilton, Microsoft, Samsung, Levi's, Michael Kors, CNN, ESPN, Uber, PayPal, Coca-Cola, Disney, Google, Best Buy, Ford, HBO, Rolex, Starbucks, Pet Smart, McDonald's, NFL, Dunkin Donuts and many more.

Lionbridge

In January 2017, Lionbridge management projected in a Proxy Statement that "revenue growth over the next several years" would fall below 3.9% a year. These figures were allegedly inconsistent with the company's "average revenue growth of about 7% per year from 2011 to 2015." This inconsistency has led to a class action lawsuit. At the time that these projections were released, Lionbridge was valued at $356 million and planned to use acquisitions to grow Lionbridge "into a $1 billion brand."


PRODUCTS + SERVICES

This company offers products like Freeway, GeoFluent, onDemand, and Translation Workspace. Freeway is an "all-in-one translation" and localization platform. GeoFluent works to eliminate language barriers that hinder communication between prospects, customers, distributors, partners, and employees. Lionbridge's onDemand allows users to have 24/7 instant access to professional translations. The Translation Workspace enables users to create marketing materials with translated content.


Lionbridge provides services like machine learning, translation and localization, global marketing, life sciences, gaming, engineering and tech pubs, and multilingual websites. Engineering and tech pubs include engineer support, training, tech writing, and logistics. Game services include QA testing, community management, and localization. Testing services pertain to apps and websites, and life sciences focus on "global pharma, medical device, and CRO organizations."


COMPETITIVE ADVANTAGE

Lionbridge is considered to be the number one globalization company. The company's unique "Crowd-in-the-Cloud delivery model" enables them to provide consistent global brands capable of making an impact in local markets at each point in the customer life cycle. Lionbridge also has 100,000 professionals who handle business processes for some of the "most complex brands" around the globe.


TARGET INDUSTRIES + KEY CUSTOMERS

Lionbridge targets those in the automotive, customer care, banking, finance, retail, government, technology, legal, industrial manufacturing, games, life sciences, travel, and hospitality. Some of Lionbridge's key customers include Lenovo, RCI, Life Fitness, and Thule. Their partners include Adobe, Oracle, Microsoft, WordPress and more.

Amazon M-Turk

Direct information on projected growth rates for Amazon M-Turk was unavailable. This is due to the fact that Amazon has not released precise growth details or other relevant information on M-Turk for quite some time. For example, while the company claims to provide access to over 500,000 workers, it has been reported that this figure hasn't been updated in years. Without reliable updates, growth figures are not accessible.


PRODUCTS + SERVICES

Amazon M-Turk has a 24/7 workforce that offers data verification and clean-up, image/video processing, information gathering, and data processing services. Image/video processing includes tagging images to improve search targeting, reviewing, auditing, and classifying images. Information gathering includes market research, content writing, and research. Data processing includes transcription, translation, categorizing information and rating search results. Data verification and clean-up includes identifying incomplete content, removing duplicate content, verifying information and converting unstructured data.


COMPETITIVE ADVANTAGE

Amazon M-Turk allows businesses and developers to reach their goals "more quickly and at a lower cost than was previously possible." This is due to their global workforce of high-quality on-demand workers that are available 24/7.

TARGET INDUSTRIES + KEY CUSTOMERS

This company does not explicitly state their target industries, however, their case studies include companies who sought transcription, translation, marketing technology, media and file tagging, market intelligence services and more. Their key customers include Acxiom Corporation, U.S. Army Research Laboratory (ARL), Channel Intelligence, CastingWords, SnapMyLife, DARPA, Tagasauris, and Statera.

CONCLUSION

In conclusion, a competitive analysis of Crowdflower, Appen, Applause, Lionbridge, and Amazon M-Turk was provided. Information on products/services, competitive advantages, target industries, key customers, and projected growth, where available, were outlined for each company.
Sources
Sources

From Part 02