Investing in IoT is all about the use case, according to a report from Boston Consulting.
The IoT market is expected to reach over $250 billion by 2020, according to a recent Boston Consulting Group market analysis, “Winning In IoT, It’s All About The Business Processes.” The report also predicts that the two strongest sources of IoT revenue growth will be services and IoT applications.
According to the report, the IoT is growing rapidly. Through 2020 all layers of the tech stack are expected to achieve an annual growth rate of at least 20 percent. Services, analytics and applications are expected to be responsible for 60 percent of IoT growth, with security, cloud and platform infrastructure, communications and hardware responsible for the rest.
The report also stated that use cases, not connected things, are what will drive IoT adoption.
“There is no such thing as ‘the’ Internet of Things; today’s market is heavily driven by specific use case scenarios,” said the report. “With this in mind, we identified a wide range of use cases for IoT. From this long list, we pinpointed ten IoT use cases that are poised to mature rapidly and experience widespread adoption (in a B2B context) through 2020.”
According to the report, the 10 IoT use cases that show the most promise are:
- Predictive maintenance
- Remote patient monitoring
- Inventory management
- Smart meters
- Self-optimizing production
- Fleet management
- Connected cars
- Track and trace
- Distributed generation and storage
- Demand response
Insight into where customers plan to invest in IoT, when they will invest, and how much they plan to spend helps clarify which use cases will drive IoT growth through 2020, the report states. Companies are asking “how can IoT help our company increase customer satisfaction, improve quality, support new business models (such as data-driven services), and reduce costs?”
The report also said companies are increasingly transitioning from IoT customers to IoT providers. Companies from GE (Predix) to Microsoft (Azure) have released platforms, applications and end-to-end operating systems for the IoT. Other key players include SAP Hana, IBM Watson and Cisco.
The going could be tough for new players entering the space though, as the report found that 40 percent of IoT customers prefer to get their IoT services and applications through traditional and well-established companies. The top three things they look for in an IoT vendor are functionality, reliability and integration. End-to-end solutions are key.