A new update to the International Data Corporation (IDC) Worldwide Semiannual Internet of Things Spending Guide forecasts worldwide spending on the Internet of Things (IoT) to grow 16.7 per cent year over year in 2017, reaching just over US $800 billion. By 2021, global IoT spending was expected to total nearly US $1.4 trillion as organisations continued to invest in the hardware, software, services, and connectivity that enable the IoT.
“The discussion about IoT has shifted away from the number of devices connected,” said Carrie MacGillivray, Vice-president, Internet of Things and Mobility at IDC. “The true value of IoT is being realised 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.”
The IoT use cases that were expected to attract the largest investments in 2017 included manufacturing operations ($105 billion), freight monitoring ($50 billion), and production asset management ($45 billion). Smart grid technologies for electricity, gas and water and smart building technologies were also forecast to see significant investments this year ($56 billion and $40 billion, respectively).
The industries making the largest IoT investments in 2017 were: Manufacturing ($183 billion), Transportation ($85 billion), and Utilities ($66 billion). Cross-Industry IoT investments, which represented use cases common to all industries, such as connected vehicles and smart buildings, would be $86 billion in 2017 and will rank among the top segments throughout the five-year forecast. Consumer IoT purchases was likely to be the fourth largest market segment in 2017 at $62 billion, but would grow to become the third largest segment in 2021. Meanwhile, The industries that would see the fastest spending growth were Insurance (20.2 per cent CAGR), Consumer (19.4%), and Cross-Industry (17.6 per cent).
From a technology perspective, the report said hardware would be the largest spending category until the last year of the forecast when it would be overtaken by the faster growing services category.
Asia/Pacific (excluding Japan)(APeJ) would be the IoT investment leader throughout the forecast with spending expected to reach US $455 billion in 2021. The second and third largest regions would be the United States (US $421 billion in 2021) and Western Europe ($274 billion).
Manufacturing would be the leading industry for IoT investments in all three regions, followed by Utilities and Transportation in APeJ and Western Europe, and Transportation and Consumer in the United States.
Image Credit: IDC