Worldwide IoT spending will increase from $674 billion this year to $772.5 billion in 2018, a 14.6% increase, according to IDC. The sector will maintain a 14.4% compound annual growth rate (CAGR) through 2021, according to IDC’s Worldwide Semiannual Internet of Things Spending Guide. Worldwide IoT spending will reach $1.1 trillion in spending in 2021 after having passed the $1 trillion mark the previous year.
“By 2021, more than 55% of spending on IoT projects will be for software and services. This is directly in line with results from IDC’s 2017 Global IoT Decision Maker Survey where organizations indicate that software and services are the key areas of focused investment for their IoT projects,” said Carrie MacGillivray, vice president, Internet of Things and Mobility at IDC. “Software creates the foundation upon which IoT applications and use cases can be realized. However, it is the services that help bring all the technology elements together to create a comprehensive solution that will benefit organizations and help them achieve a quicker time to value.”
Worldwide IoT Spending
In 2018, IoT hardware, at $239 billion, will be the largest category. It includes sensors, modules, infrastructure and security. Services follow. Third is software and connectivity. Software spending includes applications, analytics, platforms and security. Software and services spending will five-year CAGRs of 16.1% and 15.1%, respectively.
The industries in which the most money will be spent will be manufacturing ($189 billion), transportation ($85 billion) and utilities ($73 billion). Asia-Pacific, excluding Japan, at $312 billion, lead regional spending. Second and third will be North America at $203 billion and EMEA at $171 billion. The fastest growing region will be Latin America, with a five-year CAGR of 28.3%. The top four spending nations will be China ($209 billion), the United States ($194 billion) Japan ($68 billion) and Korea ($29 billion).