There's little dispute that the Internet of Things (IoT) represents huge growth and seemingly endless business opportunities, but understanding exactly where the revenue opportunities lie is another matter.
Analysts at International Data Corporation (IDC) aim to shed some light on that by providing a new report that attempts to define the hardware, software, services, connectivity and security that make up the evolving IoT ecosystem.
The research firm forecasts the IoT market to grow from $1.3 trillion in 2013 to $3.04 trillion in 2020, with a compound annual growth rate (CAGR) of 13 percent. By 2020, there will be 30 billion connected "things," according to IDC.
Not everyone defines the IoT the same way, which affects how many "things" get counted. IDC defines the Internet of Things as "a network of networks of uniquely identifiable endpoints (or "things") that communicate without human interaction using IP connectivity--be it 'locally' or globally." IDC's view of the IoT ecosystem includes intelligent systems, network equipment, connectivity services, data integration and often other types of software, applications, services and security--but not smartphones and tablets that involve human interaction.
"The opportunities presented by IoT are driving widespread attention among both traditional and non-traditional ICT vendors looking to take advantage of emerging revenue opportunities," said Vernon Turner, senior vice president of Enterprise Infrastructure, Consumer, Network, Telecom and IoT Research at IDC, in a press release. "We're still in the early stages of maturation and IoT represents unparalleled opportunity in government, consumer, and enterprise environments."
The homogeneity of connectivity needs has allowed the North American market to sidestep border-driven IoT adoption challenges and set the groundwork for IoT market growth, the firm says. In addition, government mandates and more openly eco-conscious cultures will drive Western Europe and Asia/Pacific to outpace North America in terms of IoT revenues and installed base through 2020.
"There will be no one leader in this market," said Carrie MacGillivray, vice president, IoT and Mobile Service & Infrastructure, at IDC. "The market will rely on partnerships, federation and innovative services to create truly valuable IoT solutions."
This latest IDC study updates forecasts that were published in May of 2014.
- see the press release
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