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Posts tagged ‘Internet of Things Market Forecasts’

IoT Market Predicted To Double By 2021, Reaching $520B

  • Bain predicts the combined markets of the Internet of Things (IoT) will grow to about $520B in 2021, more than double the $235B spent in 2017.
  • Data center and analytics will be the fastest growing IoT segment, reaching a 50% Compound Annual Growth Rate (CAGR) from 2017 to 2021.
  • IoT customers are planning and executing more proof of concept pilots, with many balancing their expectations regarding broader adoption.
  • Cloud Service Providers (CSP) are emerging as influential providers of IoT services, consulting and analytics for enterprises, leaving smaller opportunities for other providers in niche industries.
  • Security, integration with existing technology and uncertain returns on investment are the three biggest barriers to great IoT adoption in the enterprise.
  • Bain sees the need for vendors to concentrate on a few core industries with greater intensity to deliver more targeted industry solutions.

Enterprises adopting IoT are finding that vendors aren’t making enough progress on lowering the most significant barriers to adoption in the areas of security, ease of integration with existing information technology (IT), operational technology (OT) systems and uncertain returns on investment. As a result, enterprises are extending their expectations of when their use cases will reach scale and delivered results. These and many other fascinating findings are from Bain’s latest IoT research brief, Unlocking Opportunities in the Internet of Things. The PDF is downloadable here (PDF, 12 pp, no opt-in).

Additional key takeaways the research brief include the following:

  • The combined markets of the Internet of Things (IoT) will grow to about $520B in 2021, more than double the $235B spent in 2017. Data center and analytics will be the fastest growing IoT segment, reaching a 50% Compound Annual Growth Rate (CAGR) from 2017 to 2021. System integration, data center and analytics, network, consumer devices, connectors (or things) and legacy embedded systems are the six core technology and solution areas of the IoT market. The following graphic compares the CAGR of each area in addition to defining the worldwide revenue for each category.

  • Enterprises are still optimistic about IoT’s business value and potential to deliver a positive ROI; however many are planning less extensive IoT implementations by 2020. Bain finds that enterprises are still running more proofs of concept than they were two years ago. They’ve also discovered that more customers are considering trying out new use cases: 60% in 2018 compared with fewer than 40% in 2016.

  • Security, integration with existing technology and uncertain returns on investment are the three biggest barriers to great IoT adoption. Bain found that enterprises would buy more IoT devices and pay up to 22% more on average for them if security concerns were addressed. Integration continues to be a barrier to greater IoT adoption as well. Bain found that vendors haven’t simplified the integration of IoT solutions into business processes or IT and OT as much as enterprises have expected. The report calls for vendors to invest in learning more about typical implementation challenges in their customers’ industries so they can suggest more strategic, end-to-end solutions.

  • IoT vendors including CSPs generating the most sales are concentrating on two to three industries to scale the depth of their expertise quickly.  More than 80% of vendors still target four to six industries which makes it difficult to reach an expertise and knowledge scale that wins new clients. Bain finds that when vendors and CSPs concentrate on two or three domains, they gain mastery of specific markets faster and can provide insights to enterprises more effectively. Gaining expertise in two to three core industries is also an excellent differentiation strategy for vendors and CSPs who compete against price-driven IoT service providers.

  • Interest in remote monitoring and real-time monitoring is flourishing in IoT making this one of the fastest-growing use case categories. Being able to monitor production systems to the machine or asset level remotely and having the option to turn the data stream into a real-time source of knowledge is a fast-growing area of IoT adoption today. Based on interviews with manufacturers the popularity of Overall Equipment Effectiveness (OEE) is growing, fueled by the options available for remote and real-time monitoring of production assets. Bain discovered that industrial equipment leader ABB bundles remote monitoring into its connected robotics systems and connected low-voltage networks, which allows customers to troubleshoot and quickly identify issues requiring greater attention.
  • Cloud Service Providers (CSP) are emerging as influential providers of IoT services, consulting and analytics for enterprises, leaving smaller opportunities for other providers in niche industries. Amazon Web Services (AWS) and Microsoft Azure have emerged as the dominant CSP leaders of the fast-moving global market for IoT software and solutions. Bain finds that CSPs are successful in lowering barriers to IoT adoption, allowing for simpler implementations and making it easier to try out new use cases and scale up quickly. The study finds that the broad horizontal services provide little optimization for industry-specific applications, leaving a significant opportunity for industry solutions from systems integrators, enterprise app developers, industry IoT specialists, device makers and telecommunications providers.

Roundup Of Internet of Things Forecasts And Market Estimates, 2015

  • Internet of things forecastCisco predicts the global IoT market will be $14.4T by 2022.
  • IC Insights predicts revenue from Industrial Internet IoT spending will increase from $6.4B in 2012 to $12.4B in 2015.
  • IoT in manufacturing market size is estimated to grow from $4.11B in 2015 to $13.49B by 2020, attaining a CAGR of 26.9%.

With the potential to streamline and deliver greater time and cost savings to a broad spectrum of enterprise tasks, opportunities for Internet of Things (IoT) adoption are proliferating. It’s encouraging to see so many industry-leading manufacturers, service providers, software and systems developers getting down to the hard work of making the vision IoT investments pay off.

Forecasting methodologies shifted in 2015 from the purely theoretical to being more anchored in early adoption performance gains. Gil Press wrote an excellent post on this topic Internet of Things By The Numbers: Market Estimates And Forecasts which continues to be a useful reference for market data and insights, as does his recent post, Internet Of Things (IoT) News Roundup: Onwards And Upwards To 30 Billion Connected Things.

Key takeaways from the collection of IoT forecasts and market estimates include the following:

ABI Research market estimates; Internet of Things market forecast

1`4 4 Trillion IoT Internet of Things market forecast

green graphic IoT Internet of Things market forecast

software BI; Internet of Things market forecast

  • IC Insights predicts revenue from Industrial Internet of Things spending will increase from $6.4B in 2012 to $12.4B in 2015, attaining a 17.98% CAGR. IC Insights predicts the Industrial Internet will lead all five categories of its forecast, with Connected Cities being the second-most lucrative, attaining a 13.16% CAGR in the forecast period. The research firm segments the industry into five IoT market categories: connected homes, connected vehicles, wearable systems, industrial Internet, and connected cities. Source: IC Insights Raises Growth Forecast for IoT.

revenue for IoT systems; Internet of Things market forecast

  • Manufacturing (27%), retail trade (11%), information services (9%), and finance and insurance (9%) are the four industries that comprise more than half the total value of the projected $14.4T market. The remaining 14 industries range between 7% percent and 1%. The following graphic based on Cisco’s analysis of the IoT market potential by industry and degree of impact. Cisco predicts Smart Factories will contribute $1.95T of the total value at stake by 2022. Source: Embracing the Internet of Everything To Capture Your Share of $14.4 Trillion, white paper published by Cisco.

top four industries IoT; Internet of Things market forecast

  • Intel Capital, Qualcomm Ventures, Foundry Group, Kleiner Perkins Caufield & Byers (KPCB), Andreessen Horowitz, Khosla Ventures, True Ventures and Cisco Investments are the leading IoT investors this year. Intel Capital is investing in a broad base of IoT-related technologies, encompassing 3D body-scanning and biometric sensors, wearable sand IoT infrastructure startups. Source: The Most Active VCs In The Internet Of Things And Their Investments In One Infographic. 

mot active IoT investors; Internet of Things market forecast

  • Vodafone’s latest Machine-to-Machine (M2M) study found that 37% of enterprises have projects targeted to go live in 2017. Vodafone defines M2M as technologies that connect machines, devices, and objects to the Internet, turning them into ‘intelligent’ assets that can communicate. M2M enables the Internet of Things. The following graphics compare M2M adoption trends from 2013 and 2015 and by industry. Source: 2015 Vodafone M2M Barometer Report (free, opt-in reqd., 36 pp.).

adoption of M2M 2013 2015; Internet of Things market forecast

adoption of M2M by industry; Internet of Things market forecast

growth iot; Internet of Things market forecast

  • New connections to the Internet of Things (IoT) will grow from about 1.7B in 2015 to nearly 3.1B in 2019. IoT applications will also fuel strong sales growth in optoelectronics, sensors/actuators, and discrete semiconductors, which are projected to reach $11.6B in 2019, attaining a CAGR of 26% during the forecast period. Source:  IC Insights Internet of Things Market to Nearly Double by 2019.

New Connections Internet of Things; Internet of Things market forecast

Internet of things forecast Microsoft; Internet of Things market forecast

McKinsey Institute Internet of Things; Internet of Things market forecast

  • IDC predicts that by 2018, 40% of the top 100 discrete manufacturers will rely on connected products to provide product as a service. 55% of discrete manufacturers are researching, piloting, or in production with IoT initiatives. By 2017, 50% of manufacturers will explore the viability of micrologistics networks to enable the promise of accelerated delivery for select products and customers. 65% of companies with more than ten plants will enable workers on the factory floor to make better business decisions through investments in operational intelligence. Source: IDC Manufacturing Insights Report courtesy of Cognizant, Transforming Manufacturing with the Internet of Things May 2015

 

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