IoT spend set to top $800 billion in 2017
IDC report predicts global spend on the internet of things will top $1.4 trillion by 2021
Global spend on the internet of things is set to top $800 billion in 2017, and surpass $1.4 trillion over the next five years, according to forecasts from IDC.
International Data Corporation, or IDC, predicts IoT spend to grow 16.7% this year as more businesses expand their connected portfolios.
In its Worldwide Semiannual Internet of Things Spending Guide, IDC said use cases expect to attract the largest investments in IoT this year include manufacturing operations ($105 billion), freight monitoring ($50 billion), and production asset management ($45 billion).
"The discussion about IoT has shifted away from the number of devices connected," said Carrie MacGillivray, vice president, IoT and mobility at IDC.
"The true value of IoT is being realized when the software and services come together to enable the capture, interpretation, and action on data produced by IoT endpoints. With our Worldwide IoT Spending Guide, IDC provides insight into key use cases where investment is being made to achieve the business value and transformation promised by the Internet of Things."
Smart grid technologies will take a 13.1% share of the market (around $56 billion), while smart buildings will be worth around $40 billion. Smart homes will also see significant growth, with a compound annual growth rate of 19.8%.
Hardware will continue to dominate spending, according to IDC, for the next four years, when it will be overtaken by spend on services. The fastest growing areas of technology spending are in the software category, where horizontal software and analytics software will have five-year CAGRs of 29.0% and 20.5%, respectively.
Asia Pacific (excluding Japan) will lead investment in IoT, with spending set to top $455 billion in 2021. The US ($421 billion) and Western Europe ($274 billion) take up second and third respectively.
"As enterprises are adopting to new and innovative services provided by different vendors a lot of new threats are introduced, so it's very important to upgrade existing security systems to ensure that an optimal business outcome can be reached and ROI can be justified," said Ashutosh Bisht, research manager for IT Spending across APeJ.
The report highlights the scale of the opportunity for telecoms operators who are looking to turn the need for connectivity in IoT into a huge revenue stream.