The worldwide internet of things (IoT) market is to grow from US$655.8 billion in 2014 to US$1.7 trillion in 2020 with a compound annual growth rate (CAGR) of 16.9%, according to IDC.
The new forecast was one of three reports recently published by IDC to define the IoT market and identify new opportunities for the technology. These reports include IDC's Worldwide Internet of Things Taxonomy, 2015, Worldwide Internet of Things Forecast, 2015–2020, and the Worldwide IoT Spending Guide by Vertical.
According to the reports, devices, connectivity and IT services will account for more than two thirds of the worldwide IoT market in 2020. Devices, which include modules and sensors, will represent 31.8% of this total.
By 2020, IDC also expects that IoT purpose-built platforms, application software and ‘as a service’ offerings will capture a larger percentage of revenue.
“The IoT gained some significant momentum in 2014 as vendors and enterprises alike started to make concrete plans to capture the opportunity this market presents,” said Carrie MacGillivray, programme vice president of IoT and Mobile research at IDC. “The challenge for vendors will be joining a strong ecosystem of partners that can provide a comprehensive solution. For enterprises, it will be determining which vendors understand their specific business problems and create solutions that are tailored to fit that business need. If these two challenges are overcome, the revenue potential that this market promises.”
IDC also predicted that while wearable devices will continue to spur growth in consumer IoT, the public sector and enterprises is where the real growth opportunity lies over the next few years.
“The ripple effect of IoT is driving traditional business models from IT-enabled business processes to IT-enabled services and finally to IT-enabled products, which is beginning to disrupt the IT status quo,” said Vernon Turner, senior vice president and research fellow (IoT) of Enterprise Systems at IDC.
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