Internet of Things Spending to Reach $1.29 Trillion by 2020
A new forecast from International Data Corp. estimates that the total worldwide spending on the Internet of Things (IoT) will reach $1.29 trillion by 2020. According to the market research firm's Worldwide Semiannual Internet of Things Spending Guide, that represents a compound annual growth rate of 15.6 percent over the 2015-2020 forecast period.
Much of that spend will go toward hardware — the largest spending category throughout the forecast, followed by services, software and connectivity, according to IDC. The company predicts that hardware spending will approach $400 billion by 2020; modules and sensors that connect endpoints to networks will represent the bulk of hardware purchases. On the other hand, IDC said, hardware will be the slowest growing IoT technology category, beaten out by software and services.
IDC points to manufacturing as the industry expected to make the largest investment in the IoT; the fastest spending growth will come out of the insurance, consumer, healthcare and retail industries. In addition, "Cross-Industry IoT investments, which represent use cases common to all industries, such as connected vehicles and smart buildings, will rank among the top segments throughout the five-year forecast," said the firm in a press release.
"A fairly close relationship exists between high-growth IoT use cases in consumer product and service oriented verticals like retail, insurance, and healthcare," said Marcus Torchia, an IDC research manager for IoT, in a statement. "In some cases, these are green field opportunities with tremendous room to run. In other verticals, like manufacturing and transportation, large market size and more moderate growth rate use cases characterize these verticals. As a whole, the IoT opportunity is a diverse developing marketplace for vendors and end users alike."
For more information on the Worldwide Semiannual Internet of Things Spending Guide, visit the IDC site.
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Rhea Kelly is editor in chief for Campus Technology, THE Journal, and Spaces4Learning. She can be reached at [email protected].