IDC sees the growth rate in IoT in the next 2-3 years as being on a trajectory to surpass $1 trillion in spending.
For a technology initiative that has barely been on corporate radar screens for less than five years, the internet of things (IoT) it sure is attracting a lot of funding. According to recent research out of IDC, worldwide spending on IoT is forecast to reach $772.5 billion in 2018, an increase of almost 15 percent over the $674 billion that was spent in 2017. Worldwide IoT spending is expected to sustain a compound annual growth rate exceeding 14 percent through the 2017-2021 forecast period, surpassing the $1 trillion mark in 2020 and reaching $1.1 trillion in 2021.
For many in the tech industry, the booming IoT space represents fertile ground for new opportunities. Bernd Gross, CEO of Cumulocity, a division of Software AG, for one, says his business has already invested more than 2 billion euros in IoT technologies and solutions. At the same time, “we’re still at the early market of IoT,” he points out.
Where is the money going? In a recent analysis of 1,600 IoT implementations, IoT Analytics found smart city initiatives to be the leading use case for IoT, comprising 23 percent of projects. Industrial IoT is the second key are fort IoT investment — another 17 percent are applying IoT to connected industry. Another 12 percent are interested in connected buildings, and 11 percent are working with connected cars.
The variety of use cases are creating whole new markets for managing the integration of the many forms of data that are flowing into enterprises. Gross related that even for industrial IoT alone, the challenge is being able to assimilate the flow of this data and translate it into analytics. “If you think about the internet of things, it’s extremely important that you get this data from machines, while also analyzing SCALA systems. The data you are collecting from these systems needs to work somewhere,” says Gross.
These industries will face most disrpution…
The industries that are expected to spend the most on IoT solutions over the coming year, as found by IDC, include manufacturing ($189 billion), transportation ($85 billion), and utilities ($73 billion). “IoT spending among manufacturers will be largely focused on solutions that support manufacturing operations and production asset management,” according to IDC. “In transportation, two-thirds of IoT spending will go toward freight monitoring, followed by fleet management.
IoT spending in the utility sector will be dominated by smart grids for electricity, gas, and water. Cross-Industry IoT spending, which represents use cases common to all industries, such as connected vehicles and smart buildings, will be nearly $92 billion in 2018 and rank among the top areas of spending throughout the five-year forecast.”
IoT hardware will be the largest technology category in 2018 with $239 billion going largely toward modules and sensors along with some spending on infrastructure and security. Services will be the second largest technology category, followed by software and connectivity.