While most everyone agrees that the Internet of Things (IoT) is poised for explosive growth and represents boundless opportunities – billions of connected things driving trillions in revenue – understanding where the revenue opportunities lie across different technology layers has remained elusive.
A recently released IoT ecosystem forecast from International Data Corporation (IDC) states that the market could grow from $1.3 trillion in 2013 to $3.04 trillion in 2020 with a compound annual growth rate (CAGR) of 13%.
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. As IoT moves beyond the hype and promise, a variety of vendor strategies and key players will emerge to find success in meeting customers’ needs as well as growing new revenue streams from this net new market opportunity.
“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, Enterprise Infrastructure, Consumer, Network, Telecom and IoT Research. “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. 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. “The market will rely on partnerships, federation, and innovative services to create truly valuable IoT solutions.”
Additional findings from IDC’s new forecast include the following:
- In the IoT market, a collection of vendors, service providers and systems integrators must co-exist and integrate products and solutions to realize success.
- The installed and connected base of IoT units will reach approximately 30 billion in 2020.
- Startup vendors are working feverishly to carve out their strategies to attack this market and will drive the innovation pace of larger vendors.