This article is part of our Essential Guide: A CIOs guide to the Internet of Things (IoT)

Public sector slow to pick up on the internet of things, says Gartner

A Gartner report predicts smart city deployments will be heavily skewed towards the private sector, leaving the public sector trailing

Despite increasing pressure on city authorities to use internet of things (IoT) technology to balance resource constraints with sustainability concerns, the private sector will account for most IoT connections over the next five years, according to a Gartner report on smart cities.

Gartner said smart home and commercial building technology will be the primary application of the internet of things (IoT), representing over 45% of connected things in use this year, and 81% by 2020. Smart cities will use 1.1 billion connected things this year, rising to 9.7 billion by 2020, it claimed.

Gartner’s definition of a smart city is “an urbanised area where multiple sectors co-operate to achieve sustainable outcomes through the analysis of contextual, real-time information shared among sector-specific information and operational technology systems”.

It said investment and service opportunity would ensure that the private sector – smart homes and commercial buildings – would remain at the forefront of IoT deployments, rising to 81% of total connections in the next five years.

Read more about smart cities

"The majority of IoT spending for smart cities will come from the private sector. This is good news for technology service providers (TSPs) as the private sector has shorter and more succinct procurement cycles than public sectors and cities," said Bettina Tratz-Ryan, Gartner research vice-president.

Tratz-Ryan urged technology companies to plan, engage and position their offerings now, or risk missing out on the money-spinning opportunities.

“We expect commercial IoT implementations to be used across multiple industries, such as smart energy, environmental service or journey planning, which will offer TSPs the opportunity to monetise IoT by building IoT-related service models," said Tratz-Ryan.

In the home and the car

With consumers leading the way, connected things will tend towards areas smart lighting, healthcare monitoring, smart locks and sensors. Lighting will record the highest growth among consumers, from six million units this year to 570 million by 2020.

Outside the home, on- and off-street parking guidance and road traffic assistance will be popular. Gartner described the reduction of traffic congestion as a “quick win” for the IoT.

Autonomous vehicles have already proved a key area of development for technology firms, as evidenced at this year’s Mobile World Congress in Barcelona.

“Electric mobility, charging stations and embedded IoT will generate additional IoT opportunities in smart cities," said Tratz-Ryan. “This could be, for example, IoT in vehicles, or vehicle batteries sensing and communicating with the driver, or the next charging station to negotiate charging terms.”

A number of new business models will emerge in this area in the next few years, said Gartner. For example, car makers may begin to collaborate with the public sector to deploy streetlights with charging stations embedded in the posts, reducing the need for dedicated charging stations provided by local councils.

Connected things installed base in smart cities (in millions)

Smart city subcategory 2015 2016 2017
Healthcare       9.7      15.0      23.4
Public services      97.8     126.4     159.5
Smart commercial buildings     206.2     354.6     648.1
Smart homes     294.2     586.1   1,067.0
Transport     237.2     298.9     371.0
Utilities     252.0     304.9     371.1
Others      10.2      18.4      33.9
Total    1,107.3    1,704.2    2,674.0

Source: Gartner (March 2015)

Opportunity for startups

Meanwhile, a Cisco report released earlier in the week revealed major opportunities for UK startups around the IoT, suggesting that British businesses stood to make at least £100bn from IoT technology by 2025.

Cisco said the healthcare industry had the greatest opportunity, with scope to access over £48bn over the next decade. The retail industry was close behind at £37bn. Gartner also highlighted transport, at £11bn; and energy, with £7bn worth of opportunities.

Cisco released its statistics to mark the launch of its 2015 Big Innovation Gateway (BIG) awards for startups, which this year are focusing heavily on the IoT.

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