The Natural Language Processing (NLP) software market is estimated to expand from $3,787.3 million in 2013 to $9,858.4 million in 2018, growing at a Compound Annual Growth Rate (CAGR) of 21.1 percent, says new research from MarketsandMarkets.

NLP software is used to analyze and understand both spoken and written human languages. The software is mostly used in verticals such as Web and e-commerce, BFSI (banking, financial services and insurance), social websites, healthcare, IT and telecommunications.

Major factors driving the NLP market include the growing demand for enhanced customer experiences, increases in the adoption of smartphones, big data and growth in machine to machine (M2M) technologies.

Geographically, North America is expected to be the largest market in terms of revenue contribution, while European and the APAC region are expected to experience increased market traction due to investment support in research projects and growing adoption of NLP in several industry verticals.

One of the best uses of NLP technology is to analyze customer needs and expectations, and enhancing customer experience by optimizing a cost-effective lingual response system in organizational processes.

NLP software allows organizations to have better insights on a customer’s perception, optimize business processes and reduce operational costs.

The market for NLP is witnessing several technology transformations. Major technology vendors such as Nuance (News - Alert) Communications, M*Modal, IBM and other firms are innovating NLP software solutions that can be easily integrated into enterprise platforms.

Another trend sweeping the NLP market is the popularity of on-demand NLP software solutions. Such solutions are expected to have a continuous growth and adoption rate in the long term, thereby creating customizable stack services and applications facilitating quicker customer adoption of the same.