Spending on information and communications technology (ICT) and services associated with the “Internet of Things” (IoT) will yield global revenues of $4.8 trillion in 2012 and increase at a 7.9% compound annual growth rate (CAGR) to reach $8.9 trillion by 2020, according to a new report from IDC.
IoT is an emerging conceptual framework which encompasses Internet-enabled consumer electronics, smart appliances, buildings and transportation, as well as smart grid equipment and services, and industrial and manufacturing equipment. Given the already extensive and still ongoing network connectivity of just about every facet of human activity, IoT “is occupying the minds of IT vendors, service providers, and systems integrators as it represents huge potential for new streams of revenue and new customers,” according to the IDC “Internet of Things (IoT) 2013 to 2020 Market Analysis: Billions of Things, Trillions of Dollars” report.
Key enablers of the IoT, according to IDC, include:
- Ongoing development of smart cities, cars, and houses;
- Enhanced connectivity infrastructure; and
- An increasingly “connected” culture
“The momentum of the Internet of Things is driven by a number of factors. There is no doubt that business and consumer demand exists and will continue to expand for IoT solutions,” IDC senior vice president, enterprise infrastructure, consumer, network, telecom and sustainability research, Vernon Turner was quoted in a press release. “I expect the current IoT use cases are just the tip of the iceberg.”
Despite the sanguine forecast, IDC points out that several factors stand in the way of IoT growth. On the supply side are factors such as lack of standards, global scalability and “a nascent ecosystem for application development.” Challenges on the demand side, according to IDC, include lack of awareness and a focus on other IT/mobility priorities.
Nonetheless, IDC forecasts the installed base of the Internet of Things to extend to include some 212 billion “things” globally come year-end 2020, including installation of some 30.1 billion connected (autonomous) things. “This is largely driven by intelligent systems that will be installed and collecting data – across both consumer and enterprise applications,” IDC explains.
“It is important to remember that while the market for the Internet of Things is still in its infancy, there is a long legacy of autonomous wired connected things,” said Carrie MacGillivray, Program Vice President, Mobile Services, M2M & Network Infrastructure. “The enabler for increased growth over the forecast period is the pervasiveness of wireless connectivity and ubiquitous access to the Internet regardless of location.”