New reports suggest that the Internet of Things could expand to as much as $1.29 trillion by 2020.Two recent studies from the International Data Corporation (IDC) and another complied by the US Department of Commerce (DoC) show that the Internet of Things will grow exponentially over the next several years.
The IDC study, released on 4 January, suggested that worldwide IoT spending, including hardware, software, services, and enabling connectivity, could expand to as much as US$1.29 trillion by 2020, versus an already impressive US$737 billion of spending estimated for 2016.
The DoC study laid out a variety of recommendations for the US government to foster such growth, through vehicles such as the government’s own adoption of the technology, selected public-private partnerships, and workforce training.
Utilities, according to IDC, invested $69 billion in IoT technologies in 2016, including nearly $58 billion toward the vision of an IoT-driven smart grid for electricity and gas.
The IDC study notes that “smart homes,” the consumer IoT, is only the fourth-largest segment identified. The firm IDC envisions tremendous growth in this segment, with annual smart-home investments projected to double by 2020, reaching some US$63 billion.
Hardware represents the largest single component of IoT spending. The IDC expects spending on IoT software and services to expand the fastest.
Nonetheless, IoT hardware spending could nearly double by 2020, reaching some $400 billion, according to IDC. And the company expects that growth to be dominated by connectivity module and sensor technology.
Navigant examines the US IoT market
[quote] In a separate report from Navigant Research , the firm explores the US market for the Internet of Things, focusing on technology trends, customer adoption, utility rollouts, and the vendor landscape, with cost curve projections and adoption forecasts, through 2025.
It states that the developing IoT market will require a rethinking of current utility business models to capture market share in this broader demand management landscape.
It adds that the Internet of Things enables customers to manage their energy independently, as the technologies opens the door to ongoing relationships through devices, software, and services.
“The Internet of Things is not one device or technology but a platform of data collection devices, secure data networks, software, and services that delivers actionable insight,” says Casey Talon, principal research analyst with Navigant Research. “If utilities seize the opportunity, they can leverage this to enhance customer offerings and increase customer engagement.”