Organizations across the U.S. are finding more ways and means to leverage IoT technologies for their benefit, according to an enterprise IoT spending forecast from IDC. In an update to its Worldwide Semiannual Internet of Things Spending Guide, the Framingham, Massachusetts-based market research provider forecasts enterprises to invest more than $232 billion in IoT hardware, software, services and connectivity in 2016.
The IDC U.S. enterprise IoT spending forecast calls for IoT revenues to increase at a 16.1 percent CAGR between 2015-2019 to reach $357 billion. Businesses in the manufacturing and transportation sectors will be the biggest IoT spenders, investing $35.5 billion and $24.2 billion, respectively this year.
Enterprise IoT Spending Forecast
IoT investment in use cases common across all industries will approach $31 billion, according to IDC. Researchers forecast revenue for these cross-industry IoT investments to more than double through 2019. Spending will be greatest in the following industry sectors:
- Manufacturing Operations, which supports digitally-executed manufacturing, or how manufacturers use intelligent and interconnected I/O (input output) tools – e.g. sensors, actuators, drives, vision/video equipment etc. – to enable the different components in the manufacturing field – e.g. machine tools, robots, conveyor belts etc.– to autonomously exchange information, trigger actions and control each other independently.
- Freight Monitoring, which uses radio frequency identification (RFID), global positioning system (GPS), GPRS, and GIS technologies to create an intelligent, Internet-connected transportation system. This system carries out the intelligent recognition, location, tracking and monitoring of freight and cargo through exchanging information and real-time communications via wireless, satellite or other channels.
- Smart Buildings, which utilize advanced automation and integration to measure, monitor, control, and optimize building operations and maintenance. The key concept is optimization – meaning the deployment of a set of integrated control systems capable of adapting in real time to both internal policies and external signals. These systems manage how building equipment operates to use energy in the most efficient and cost-effective way.
Remote health management, smart grid and smart home IoT use cases will follow in terms of the amount of money U.S. organizations invest in IoT technology and systems. In terms of investment growth, IDC forecasts IoT spending by insurance, retail and healthcare businesses will surge 135, 101 and 96 percent, respectively during the forecast period.
“A use case represents a detailed composition of a technology investment that is made to produce a set of end user benefits,” explained Marcus Torchia, research manager, IoT for IDC’s Customer Insights and Analysis team. “The long term opportunity for IoT vendors is helping to identify and create immediate and residual benefits for end users through their technologies. We see strong opportunities across many industries.
¨For example, in highly instrumented verticals like manufacturing and transportation, large data sets are used to optimize operational processes and extend the life of high capital cost assets. In other sectors like healthcare and consumer, IoT technology is being used to produce benefits that improve quality of life.”