Data Annotation Tools Market (By Type: Text, Image/Video, Audio; By Annotation Type: Manual, Semi-supervised, Automatic; By Vertical: IT, Automotive, Government, Healthcare, Financial Services, Retail, Others) - Global Industry Analysis, Market Size, Opportunities and Forecast 2021 - 2028

Category : ICT | Delivery Format : PDF | Status: Published | Pages : 190

The global data annotation tool market is expected to grow at a CAGR of around 34.5% from 2021 to 2028 and is expected to reach the market value of around US$ 8.0 Bn by 2028.

A data annotation tool is a software solution that is cloud-based, on-premises, or containerized that is used to annotate production-grade training data for machine learning. A data annotation tool is typically intended for use with a specific type of data, such as text, audio, audio, sensor data, or spreadsheet. Furthermore, data annotation tools offer a variety of deployment models, including on-premise, container, and SaaS (cloud).

Market Dynamics

Big calls for Data Annotation Tools for identification of images in "Healthcare"

Over the years utility of medical images has become common due to release of inexpensive, mega-pixel quality digital cameras and the transition to digital radiology operations by hospitals. One of the difficulties that clinicians face is when dealing with images. Annotating digital images with symbols and text is a basic task that any clinical, educator, or scientist should perform when preparing material for academic use. Furthermore, major software applications include a feature that allows users to manage annotations (visible/invisible) within the application. Each flattened image serves a specific purpose, necessitating multiple copies of the same annotated image.

Rising utility of data annotation for handling big data on cloud and Hadoop platform creates new opportunities for the market to grow

When considering the current rate of data creation, data annotation is both critical and impressive. It is predicted that by 2025, approximately 463 Exabytes of data will be created every day around the world. With the impact of COVID-19, the role of data in daily interactions has accelerated. Apart from that, for the foreseeable future, algorithms will continue to shape the consumer experience. Data annotation tools powered by AI ensure that data base solutions are as accurate and representative as possible. Data annotation tools help to enrich data for training and deploying machine learning models, which determines whether an AI project succeeds or fails. These tools play an important role in developing a result oriented model to source a troublesome solution for various problems rather than investing in failed experiment.

Data annotation tools for document classification has gained high attention in the worldwide market

According to a report published by Aclanthology.Org, data annotation tools are in high demand because many tasks in industry and research require manual annotation of a potentially large number of documents. "ACTIVEANNO," for example, is a novel annotation tool designed for document level annotation tasks in both research and industrial settings. Data annotation software helps in quality control and verification management. Infact the tool includes quality control as a part of annotation process.

Market Segmentation

The global data annotation tool market is segmented as type, annotation type, and vertical. Based on type, the market is segmented as text, image/video, and audio. By annotation type, the market is segregated as manual, semi-supervised, and automatic. Based on vertical, the market is segmented as IT, automotive, government, healthcare, financial services, retail, and others

The text segment will dominate the global data annotation tool market in terms of type. During processing, AI interactions will improve text, sentiment, voice, and interaction. Text categorization is the process of assigning categories to sentences or paragraphs within a given document based on their topic. The development of new text mining applications is heavily reliant on pre-annotated text, which is critical for evaluating tool performance. The final annotations are selected from a new context-based strategy considering the co-occurrence and semantic connection of annotated concepts.

According to annotation type, the manual segment dominates the global data annotation tool market. Manual annotation is the process of reading a specific pre-selected document and providing additional information in the form of annotations. Furthermore, manual annotations are regarded as a bottleneck in many experiments, such as NLP. Such factors have a positive impact on segmental growth, resulting in the expansion of the global data annotation tool market.

According to vertical, the IT segment dominates the global data annotation tool market with a sizable revenue share. As new technology is developed in the IT industry, the data annotation tool is enhanced for training and deploying machine learning models that determine project success or failure. As technology advances, the data annotation tool ecosystem diversifies, providing more options for increasingly diverse cases. Tooling advancements occur every month, sometimes every few weeks. These changes result in improvements to existing tools as well as new tools for emerging use cases. Such factors are to blame for segmental growth, which in turn contributes to the overall data annotation tool market.

Regional Landscape

North America dominates the data annotation tool market; Asia Pacific register fastest growing CAGR

North America dominates the data annotation tool market and is expected to maintain this dominance throughout the forecast period. The growing use of data annotation tools in the AI industry drives demand for data annotation tools in the North America regional market. Additionally, the presence of key market players such as Apple, Microsoft, and Google involved in the development of AI and ML technologies further stimulates the adoption of data annotation tools, ultimately contributing to the growth of the global data annotation tool market.

On the other hand, Asia Pacific is expected to have the fastest growing CAGR in the data annotation tool market. Rising demand for advanced technologies creates lucrative opportunities for major players to enter and expand in the APAC region. Furthermore, prominent players in this region use data annotation tools to label their datasets for better use and to provide more insightful data to consumers. Such factors contribute to the expansion of the APAC data annotation tool market.

Competitive Landscape

The prominent players of the global data annotation tool market involve, CloudApp, Appen Limited, Deep Systems, Cogito Tech LLC, Labelbox, Inc., Playment and among others

Market Segmentation

Market By Type


Market By Annotation Type


Market By Vertical

Financial Services

Market By Geography

North America
•    U.S.
•    Canada

•    U.K.
•    Germany
•    France
•    Spain
•    Rest of Europe

•    China
•    Japan
•    India
•    Australia
•    South Korea
•    Rest of Asia-Pacific

Latin America
•    Brazil 
•    Mexico
•    Rest of Latin America

Middle East & Africa
•    GCC
•    South Africa
•    Rest of Middle East & Africa

Frequently Asked Questions

Data annotation tools market is expected to reach a market value of around US$ 8.0 Bn by 2028.

The data annotation tools market is expected to grow at a CAGR of around 34.5% from 2021 to 2028.

Based on type, text segment is the leading segment in the overall market.

Technological advancement is one of the prominent factors that drive the demand for data annotation tools market., CloudApp, Appen Limited, Deep Systems, Cogito Tech LLC, Labelbox, Inc., Playment and others.

North America is anticipated to grab the highest market share in the regional market

Asia Pacific is expected to be the fastest growing market in the forthcoming years

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