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The Price Tag for the Internet of Things: $8.9 Trillion by 2020
Someone has put a price tag on the Internet of Things: $8.9 trillion a year by 2020. That's the amount consumers, businesses, universities, school systems, governments, and other organizations will spend on the forecast 212 billion "things" that will make up the Internet of Things within eight years.
According to market research firm International Data Corp., the Internet of Things will be a huge windfall for IT vendors — and in fact has already started generating huge global revenues: $4.8 trillion in 2012, with an expected compound annual growth rate of 7.9 percent through 2020.
Last year, in their annual Horizon Report, the New Media Consortium and the Educause Learning Initiative predicted that the Internet of Things would have a significant impact on education, as smart devices make their way into everyday life on campus — from IP-addressable projectors to RFID systems for tracking attendance, research subjects, and lab equipment.
The Internet of Things is in broad terms the global network of interconnected items well beyond the bounds of traditional computing devices — appliances, cameras, sensors, home lighting, sewers, street lights, cars, foodservice systems, keys, energy meters, etc. — essentially anything that has a machine-readable identifier and that connects to some other device one way or another, either through a fixed connection (as with hub devices like phones) or an intermittent connection.
The Internet of Things consists of both wired and wireless devices. But what's driving the growth forward is the approaching omnipresence of wireless technology.
Back in May, another research firm, ABI Research, predicted that by 2020, more than 30 billion devices would be connected wirelessly worldwide — triple the current number.
"Bluetooth, WiFi, ZigBee, Cellular, RFID, and many other wireless technologies are all important to drive Internet of Everything growth," ABI reported. "The long term expansion of the market will be dependent on wireless technology becoming invisible so that the consumer will be oblivious to which technology is used and only know that it works."
Now IDC is putting that number much higher: 212 billion "things," of which 30.1 billion IDC characterized as "installed connected (autonomous) things."
Enabling this growth, according to IDC, are three key factors:
- Transportation and infrastructure: the increasing growth of smart cities, smart cars, smart buildings, etc.;
- An increasingly connected culture; and
- Improvements to communications infrastructure.
"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, IDC's program vice president of mobile services, M2M & network infrastructure, in a prepared statement. "The enabler for increased growth over the forecast period is the pervasiveness of wireless connectivity and ubiquitous access to the Internet regardless of location."
Factors hindering the growth of the Internet of Things are numerous but not insurmountable.
"Even though there is growing demand for the IoT, there are still several factors inhibiting growth of this market," according to IDC. "This is not to say that they can't be overcome, but at present, they are hurdles that both vendors and enterprises will have to overcome to make IoT a reality. Some of these challenges are on the supply side, including lack of standards, global scalability, and a nascent ecosystem for application development. On the demand side, the challenges include lack of awareness and other IT/mobility priorities."
IDC's complete report on the Internet of Things, "Internet of Things (IoT) 2013 to 2020 Market Analysis: Billions of Things, Trillions of Dollars," is available for $4,500.