- According to IDC, worldwide spending on the IoT is forecast to reach $772.5B in 2018. That represents an increase of 15% over the $674B that was spent on IoT in 2017.
- Discrete Manufacturing, Transportation and Logistics, and Utilities will lead all industries in IoT spending by 2020, averaging $40B each.
- According to IDC FutureScape: Worldwide IoT 2018 Predictions, By the end of 2020, close to 50% of new IoT applications built by enterprises will leverage an IoT platform that offers outcome-focused functionality based on comprehensive analytics capabilities.
The last twelve months of Internet of Things (IoT) forecasts and market estimates reflect enterprises’ higher expectations for scale, scope and Return on Investment (ROI) from their IoT initiatives. Business benefits and outcomes are what drives the majority of organizations to experiment with IoT and invest in large-scale initiatives. That expectation is driving a new research agenda across the many research firms mentioned in this roundup. The majority of enterprises adopting IoT today are using metrics and key performance indicators (KPIs) that reflect operational improvements, customer experience, logistics, and supply chain gains. Key takeaways from the collection of IoT forecasts and market estimates include the following:
- The global IoT market will grow from $157B in 2016 to $457B by 2020, attaining a Compound Annual Growth Rate (CAGR) of 28.5%. According to GrowthEnabler & MarketsandMarkets analysis, the global IoT market share will be dominated by three sub-sectors; Smart Cities (26%), Industrial IoT (24%) and Connected Health (20%). Followed by Smart Homes (14%), Connected Cars (7%), Smart Utilities (4%) and Wearables (3%). Source: GrowthEnabler, Market Pulse Report, Internet of Things (IoT), 19 pp., PDF, free, no opt-in.
- Bain predicts B2B IoT segments will generate more than $300B annually by 2020, including about $85B in the industrial sector. Advisory firm Bain predicts the most competitive areas of IoT will be in the enterprise and industrial segments. Bain predicts consumer applications will generate $150B by 2020, with B2B applications being worth more than $300B. Globally, enthusiasm for the Internet of Things has fueled more than $80B in merger and acquisition (M&A) investments by major vendors and more than $30B in venture capital, according to Bain’s estimates. Source: Bain Insights: Choosing The Right Platform For The Internet Of Things
- The global IoT market is growing at a 23% CAGR of 23% between 2014-2019, enabling smart solutions in major industries including agriculture, automotive and infrastructure. ― Key challenges to growth are the security and scalability of all-new connected devices and the adherence to open standards to facilitate large-scale monitoring of different systems. Source: Export opportunities of the Dutch ICT sector to Germany (25-04-17), PDF, 95 pp., no opt-in
- According to Variant Market Research, the Global Internet of Things (IoT) market is estimated to reach $1,599T by 2024, from $346.1B in 2016, attaining a CAGR of 21.1% from 2016 to 2024. Asia-Pacific is predicted to grow at the fastest CAGR over the forecast period 2016 to 2024. The growth is attributed to increasing adoption of IoT in emerging countries such as India and China, high rate of mobile and internet usage, and development of next-generation technologies. Source: Global Internet of Things (IoT) Market: Rising Adoption of Cloud Platform Noticed by Variant Market Research.
- Discrete Manufacturing, Transportation and Logistics, and Utilities will lead all industries in IoT spending by 2020, averaging $40B each. Improving the accuracy, speed, and scale of supply chains is an area many organizations are concentrating on with IoT. IoT has the potential to redefine quality management, compliance, traceability and Manufacturing Intelligence. Business-to-Consumer (B2C) companies are projected to spend $25B on IoT in 2020, up from $5B in 2015. The following graphic compares global spending by vertical between 2015 and 2020. Source: Statista, Spending on the Internet of Things worldwide by vertical in 2015 and 2020 (in billion U.S. dollars).
- By 2020, 50% of IoT spending will be driven by discrete manufacturing, transportation, and logistics, and utilities BCG predicts that IoT will have the most transformative effect on industries that aren’t technology-based today. The most critical success factor all these use cases depend on secure, scalable and reliable end-to-end integration solutions that encompass on-premise, legacy and cloud systems, and platforms.Source: Internet Of Things Market To Reach $267B By 2020.
- The hottest application areas for IoT in manufacturing include Industrial Asset Management, Inventory and Warehouse Management and Supply Chain Management. In high tech manufacturing, Smart Products, and Industrial Asset Management are the hottest application areas. The following Forrester heat Map for 2017 shows the fastest growing areas of IoT adoption by industry. Source: IoT Opportunities, Trends, and Momentum Robert E Stroud CGEIT CRISC.
- B2B spending on IoT technologies, apps and solutions will reach €250B ($296.8B) by 2020 according to a recent study by Boston Consulting Group (BCG). IoT Analytics spending is predicted to generate €20B ($23.7B) by 2020. Between 2015 to 2020, BCG predicts revenue from all layers of the IoT technology stack will have attained at least a 20% Compound Annual Growth Rate (CAGR). B2B customers are the most focused on services, IoT analytics, and applications, making these two areas of the technology stack the fastest growing. By 2020, these two layers will have captured 60% of the growth from IoT. Source: Internet Of Things Market To Reach $267B By 2020.
- Manufacturers most relied on the Industrial Internet of Things (IIoT) in 2017 to help better understand machine health (32%) on the shop floor, leading to more accurate Overall Equipment Effectiveness (OEE) measurements. Changing how plant maintenance personnel will work and interact with all levels of operation (29.5%) and helping to better prevent and predict shutdowns (27.1%) are the top three use cases of IIoT according to Plant Engineering and Statista.
- Improving customer experiences (70%) and safety (56%) are the two areas enterprises are using data generated from IoT solutions most often today. Gaining cost efficiencies, improving organizational capabilities, and gaining supply chain visibility (all 53%) is the third most popular uses of data generated from IoT solutions today. 53% of enterprises expect data from IoT solutions to increase revenues in the next year. 53% expect data generated from their IoT solutions will assist in increasing revenues in the next year. 51% expect data from IoT solutions will open up new markets in the next year. 42% of enterprises are spending an average of $3.1M annually on IoT. Source: 70% Of Enterprises Invest In IoT To Improve Customer Experiences.
- McKinsey Global Institute estimates IoT could have an annual economic impact of $3.9T to $11.1T by 2025. Their forecast scenario includes diverse settings and use cases including factories, cities, retail environments, and the human body. Factories alone could contribute between $1.2T to $3.7T in IoT-driven value. Source: McKinsey & Company, What’s New With The Internet of Things?
- According to IDC by 2018, investments in Operational Sensing through IoT and situational awareness via analytics will deliver 30% improvement in Critical Process Cycle Times. IDC also predicts by 2019, at Least 40% of IoT-created data will be stored, processed, analyzed, and acted upon close to, or at the edge of, the network. Source: IDC FutureScape: Worldwide Internet of Things 2017 Predictions, 7 pp., PDF, no opt-in.
- Cisco predicts there will be 3.3B Machine-to-Machine (M2M) global connections by 2021, increasing from 1.5B in 2018. In 2017, Cisco predicts 1.1B M2M connections will be in place globally. M2M’s rapid adoption is the result of manufacturing, industry & logistics and utilities all adopting IoT-based strategies across broader segments of operations through the forecast period. Source: Statista, Number of Machine-to-Machine (M2M) connections worldwide from 2014 to 2021 (in billions).
- Business Intelligence Competency Centers (BICC), R&D, Marketing & Sales and Strategic Planning are most likely to see the importance of IoT. Finance is considered among the least likely departments to see the importance of IoT. The study also found that sales analytics apps are increasingly relying on IoT technologies as foundational components of their core application platforms.These and many other insights are from Dresner Advisory Services’ 2017 Edition IoT Intelligence Wisdom of Crowds Series study. The study defines IoT as the network of physical objects, or “things,” embedded with electronics, software, sensors, and connectivity to enable objects to collect and exchange data. The study examines key related technologies such as location intelligence, end-user data preparation, cloud computing, advanced and predictive analytics, and big data analytics. Please see page 11 of the study for details regarding the methodology.
- Manufacturing, Consulting, Business Services and Distribution/Logistics are IoT industry adoption leaders. Conversely, Federal Government, State & Local Government are least likely to prioritize IoT initiatives as very important or critical. IoT early adopters are most often defining goals with clear revenue and competitive advantages to drive initiatives. Manufacturing, Consulting, Business Services and Distribution/Logistics are challenging, competitive industries where revenue growth is often tough to achieve. IoT initiatives that deliver revenue and competitive strength quickly are the most likely to get funding and support. Source: Dresner Advisory Services’ 2017 Edition IoT Intelligence Wisdom of Crowds Series study.
- IoT advocates or early adopters say location intelligence, streaming data analysis, and cognitive BI to deliver the greatest business benefit. Conversely, IoT early adopters aren’t expecting to see as significant of benefits from data warehousing as they are from other technologies. Consistent with previous studies, both the broader respondent base and IoT early adopters place a high priority on reporting and dashboards. IoT early adopters also see the greater importance of visualization and end-user self-service. Source: Dresner Advisory Services’ 2017 Edition IoT Intelligence Wisdom of Crowds Series study.
- Business Intelligence Competency Centers (BICC), Manufacturing and Supply Chain are among the most powerful catalysts of BI and IoT adoption in the enterprise. The greater the level of BI adoption across the 12 functional drivers of BI adoption defined in the graphic below, the greater the potential for IoT to deliver differentiated value based on unique needs by area. Marketing, Sales and Strategic Planning are also strong driver areas among IoT advocates or early adopters. Source: Dresner Advisory Services’ 2017 Edition IoT Intelligence Wisdom of Crowds Series study.
- IoT early adopters are relying on growing revenue and increasing competitive advantage as the two main goals to drive IoT initiatives’ success. The most successful IoT advocates or early adopters evangelize the many benefits of IoT initiatives from a revenue growth position first. IoT early adopters are more likely to see and promote the value of better decision-making, improved operational efficiencies, increased competitive advantage, growth in revenues, and enhanced customer service when BI adoption excels, setting the foundation for IoT initiatives to succeed. Source: Dresner Advisory Services’ 2017 Edition IoT Intelligence Wisdom of Crowds Series study.
- The most popular feature requirements for advanced and predictive analytics applications include regression models, textbook statistical functions, and hierarchical clustering. More than 90% of respondents replied that these three leading features are “somewhat important” to their daily use of analytics. Geospatial analysis (highly associated with mapping, populations, demographics, and other Web-generated data), recommendation engines, Bayesian methods, and automatic feature selection is the next most required series of features. Source: Dresner Advisory Services’ 2017 Edition IoT Intelligence Wisdom of Crowds Series study.
- 74% of IoT advocates or early adopters say location intelligence is critical or very important. Conversely, only 26% of the overall sample ranks location intelligence at the same level of importance. One of the most promising use cases for IoT-based location intelligence is its potential to streamline traceability and supply chain compliance workflows in highly regulated manufacturing industries. In 2018, expect to see ERP and Supply Chain Management (SCM) software vendors launch new applications that capitalize on IoT location intelligence to streamline traceability and supply chain compliance on a global scale. Source: Dresner Advisory Services’ 2017 Edition IoT Intelligence Wisdom of Crowds Series study.
- According to IDC FutureScape: Worldwide IoT 2018 Predictions, by the end of 2020, close to 50% of new IoT applications built by enterprises will leverage an IoT platform that offers outcome-focused functionality based on comprehensive analytics capabilities. By 2021, 75% of enterprises with a positive IoT ROI will use tactical analytics applications to reduce operating costs, but the 25% that successfully invest strategically in a decision architecture will increase their revenue share. Source: IDC FutureScape: Worldwide IoT 2018 Predictions.
- The global IoT market is projected to grow to $661.74B by 2021. The Industrial IoT market is expected to grow to $123.8B by 2021, and the IoT Cloud Market is estimated to grow to $7.15B by Source: IoT Growth: A Forecast.
- WiFi and Bluetooth low energy (BLE) are top contenders as preferred IoT connectivity mechanisms. However, long-range, wide-area networks (LoRaWAN) and narrowband IoT (NB-IoT) are equally poised to give a tough fight to WiFi and BLE vendors. Data analytics, correlation, and pattern recognition capabilities at point-of-data creation prove to be a key decision factor in vendor evaluation. Source: IDC Survey Reveals Significant Impact of Internet of Things Initiatives on IT Infrastructure.
- Global IoT spending will experience a compound annual growth rate (CAGR) of 15.6% over the 2015-2020 forecast period, reaching $1.29T in 2020. The industries forecast to make the largest IoT investments in 2016 are Manufacturing ($178B), Transportation ($78B), and Utilities ($69B). Consumer IoT purchases, the fourth largest market segment in 2016, will become the third largest segment by 2020. Source: Internet of Things Spending Forecast to Grow 17.9% in 2016 Led by Manufacturing, Transportation, and Utilities Investments, According to New IDC Spending Guide.
- IDC predicts that by 2021, global IoT spending is expected to total nearly $1.4T in hardware, software, services, and connectivity that enable the IoT. IoT use cases gaining the greatest investments in 2017 include Manufacturing Operations ($105B), freight monitoring ($50B), and production asset management ($45B). Please see the source document for additional details on IDC’s forecast. Source: IDC, Worldwide Spending on the Internet of Things Forecast to Reach Nearly $1.4 Trillion in 2021, According to New IDC Spending Guide.
- Gartner predicts by 2020, more than 65% of enterprises (up from 30% today) will adopt IoT products. By 2020, more than 10% of new IoT products from traditional industries will be headed by the CIO. Through 2020, a lack of data science specialists will inhibit 75% of organizations from achieving the full potential of IoT. Source: Gartner, Leading the IoT, Gartner Insights on How to Lead in a Connected World, PDF, 29 pp., free, no opt-in.
- 72% of the companies will increase their IoT spending in the next three years. A solid amount of companies plan to keep this increase between 10% and 30%, while some of them are willing to raise spending by more than 30%. Source: Cognizant Trend Study: Digital Industrial Transformation with the Internet of Things: How can European companies benefit from IoT?
- According to IDC, worldwide spending on the Internet of Things (IoT) is forecast to reach $772.5B in 2018, an increase of 14.6% over the $674B that will be spent in 2017. IoT hardware will be the largest technology category in 2018 with $239B 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. Source: IDC Forecasts Worldwide Spending on the Internet of Things to Reach $772 Billion in 2018.
10 Predictions For The Internet Of Things (IoT) In 2018
2017 Internet Of Things (IoT) Intelligence Update
Bain Insights, Three Ways Telcos Can Win On The Internet Of Things [Infographic]
Bain Insights: Choosing The Right Platform For The Internet Of Things
Big Data & Analytics Is The Most Wanted Expertise By 75% Of IoT Providers
Cambridge Consultants, Review of latest developments in the Internet of Things, 7 March 2017, 143 pp., free, no opt-in.
Cognizant Trend Study: Digital Industrial Transformation with the Internet of Things: How can European companies benefit from IoT?
Ernst & Young, Internet of Things Human-machine interactions that unlock possibilities – Media & Entertainment. 24 pp., PDF, no opt-in.
GrowthEnabler, Market Pulse Report, Internet of Things (IoT), 19 pp., PDF, free, no opt-in
IDC, Worldwide Spending on the Internet of Things Forecast to Reach Nearly $1.4 Trillion in 2021, According to New IDC Spending Guide
IHS Markit IoT Trend Watch 2017, pdf, 26 pp., free, no opt-in
Internet Of Things Market To Reach $267B By 2020
Internet Of Things Will Revolutionize Retail
PwC, Leveraging the Upcoming Disruptions from AI and IoT, 20 pp., PDF, free, no opt-in
McKinsey & Company, Beyond The Supercycle: How Technology Is Reshaping Resources
McKinsey & Company, Digital machinery: How companies can win the changing manufacturing game
McKinsey & Company, Taking the pulse of enterprise IoT
McKinsey & Company, What’s New With The Internet of Things?
IoT: Landscape and Nasscom Initiatives, May 2017. 36 pp., PDF, free, no opt-in
Stanford University Course EE392B, Industrial IoT: Applications Overview April 4, 2017, Dimitry Gorinevsky
Verizon, State of the Market: Internet of Things 2017 Making way for the enterprise
What Makes An Internet Of Things (IoT) Platform Enterprise-Ready?
Woodside Capital Partners, The Industrial Internet of Things: Making Factories “Smart” For The Next Industrial Revolution, PDF, 126 pp., free, no opt-in
THE INTERNET OF THINGS 2017 REPORT: How the IoT is improving lives to transform the world
The IoT Platforms Report: How software is helping the Internet of Things evolve