The future is taking shape today.
The Internet of Things is on track to become a trillion dollar industry.
According to an update to IDC’s Worldwide Semiannual Internet of Things Spending Guide, worldwide spending on the Internet of Things will total almost $1.4 trillion by 2021. IDC said that spending in 2017 will breach the $800 million mark—a 16.7% year-on-year increase—with the largest investments directed towards the Industrial Internet of Things.
Integration of the Internet of Things in 2017 will be led by the manufacturing sector, which is expected to spend $105 billion on operations before the end of the year. Freight monitoring and production asset management will also have a significant investment in the Internet of Things this year—IDC forecasts overall spend of $50 billion and $45 billion, respective.
The continued development of the smart grid will (naturally) benefit from the Internet of Things.
Utilities—electricity, gas and water—will invest a cumulative $56 billion as companies look to implement the next generation of energy delivery. Smart homes will be the ones to take advantage of increased utility investment in the Internet of Things, with IDC predicting that this sector will experience a compound annual growth rate of 19.8% by 2021.
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The Industrial Internet Of Things Is A Shining Light
The largest investments in the Internet of Things are being made by three distinct sectors—manufacturing, transportation and utilities.
IDC said that manufacturing companies have embraced the Internet of Things, with a cumulative spend of around $183 billion in 2017. Transportation spending is expected to total $85 billion, while utility companies will hit the $66 billion mark. Consumer spending on the Internet of Things will reach $62 billion but is likely to become the third-largest market segment by 2021.
See also: 70% Of Retailers Will Use The Internet Of Things To Improve Customer Experience
Hardware will be the key to increased spending in the next four years.
Investment will be directed towards modules and sensors that connect end points to the relevant networks, with software spending governed by applications software. After 2021, hardware and software spending in the Internet of Things will be overtaken by the services category, IDC said, with the focus switching to analytics and security products.
The Asia/Pacific region—excluding Japan—will be the biggest spenders over the next four years. Investment will reach $455 billion in 2021, with the United States and Western Europe predicted to invest $421 billion and $274 billion respective. Manufacturing will continue to be the leading industry investment in all three regions, although the United States is expected to increase its overall investment into connected transportation and consumer products.
“The discussion about IoT has shifted away from the number of devices connected,” said IDC’s vice president of Internet of Things and Mobility Carrie MacGillivray, in a press release. “The true value of IoT is being realized when the software and services come together to enable the capture, interpretation, and action on data produced by IoT endpoints.”
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