Report: Internet of Things to Tip $1 Trillion by 2020
- By Joshua Bolkan
Global spending on the Internet of Things (IoT) will grow 14.6 percent in 2018, according to a new forecast from International Data Corp. (IDC), to hit $772.5 billion. The category will more or less maintain that upward trajectory throughout the prediction period, averaging a 14.4 percent compound annual growth rate (CAGR) through 2021 and tipping the trillion-dollar mark in 2020.
Hardware will lead the way among technology categories in IoT spending in 2018, accounting for $239 billion "going largely toward modules and sensors along with some spending on infrastructure and security," according to a news release. Services will follow hardware for the year and spending on software and connectivity will come in third.
Applications, analytics, platforms and security will lead spending on software for IoT next year, and software will be the fastest-growing technology category throughout the forecast, increasing at 16.1 percent through 2021. Services will grow nearly as fast, at 15.1 percent and will also outpace spending on IoT as a whole.
"By 2021, more than 55 percent 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 of Internet of Things and Mobility at IDC, in a prepared statement. "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."
Manufacturing will lead industry spending on IoT, with a projected investment of $189 billion in 2018. Transportation and utilities will lag far behind, accounting for $85 billion and $73 billion, respectively, in 2018.
Spending across industries, which accounts for use cases that are not specific to any particular industry, such as smart building or vehicles, will account for almost $92 billion in 2018 and will be one of the fastest areas of growth.
"Consumer IoT spending will reach $62 billion in 2018, making it the fourth largest industry segment. The leading consumer use cases will be related to the smart home, including home automation, security and smart appliances," said Marcus Torchia, research director for Customer Insights & Analysis at IDC, in a prepared statement. "Smart appliances will experience strong spending growth over the five-year forecast period and will help to make consumer the fastest growing industry segment with an overall CAGR of 21 percent."
Insurance will follow consumer spending as the largest industry spender by CAGR, growing at a rate of 20.1 percent. Healthcare providers at 17.7 percent, cross industries at 17.1 percent and resource industries at 6.7 percent will round out the top five.
China will be the country that spends the most, at $209 billion, in 2018, with most of that coming from manufacturing, utilities and government. The United States will follow, with manufacturing, transportation and consumers leading the way toward $194 billion in spending.
Joshua Bolkan is contributing editor for Campus Technology, THE Journal and STEAM Universe. He can be reached at firstname.lastname@example.org.