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With the internet of things (IoT) continuing to gain momentum as innovative enterprises and tech-savvy consumers begin to pick up on its potential applications, analyst house IDC has published research claiming the market for IoT systems will grow from $655.8bn in 2014 to $1.7tn in 2020, with a compound annual growth rate (CAGR) of 16.9%. In 2015, the market is expected to grow by 19%.
IDC looked at a number of use cases and verticals to produce its report and highlighted opportunities in smart appliances, automated public transport, health monitoring, connected vehicles and air traffic control and monitoring.
Digital signage use in retail outlets will grow from $6bn in 2013 to $27.5bn in 2018, a five-year CAGR of 35.7%, as retailers move to digitise their customer buying experience.
In manufacturing, the market will grow from $42.2bn in 2013 to $98.8bn in 2018, a five-year CAGR of 18.6%, with efficiency and the need to link what IDC described as “islands of automation” the main drivers.
According to IDC, devices, connectivity and accompanying IT services will account for the majority of the IoT market worldwide by 2020, with devices and sensors alone representing 31.8% of the total market value.
The analyst said purpose-built platforms, application software and the dawn of IoT as a service (IoTaaS) would also capture substantial revenues.
IDC Enterprise Systems senior vice-president and research fellow for the IoT, Vernon Turner, said up to now wearable devices had been the consumer face of the IoT. However, he added, the real opportunity was undoubtedly in the enterprise and public sector markets.
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“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 Turner.
IDC tracks the IoT ecosystem as containing a “complex mix of technologies” which includes, but is not limited to, modules and devices, connectivity, purpose-built platforms, storage, servers, security, analytics software and services.
Key to its definition of the market is that each endpoint, or thing, must communicate autonomously without human interaction. To this end it does not count smartphones, tablets or PCs in any IoT forecasts.