The “Internet of Things”, or IoT, is defined as the concept of connecting a variety of household devices to the internet. This global IoT market, according to research firm International Data Corp (IDC), is expected to grow from $655.8 billion in 2014 to $1.7 trillion by 2020, an annually compounded growth rate of 16.9%. Growth is likely to be a result of more devices coming online, the growth of platforms and services based around these devices, and declining costs of sensors, connectivity, and data processing power.
Devices, connectivity, and information technology services are expected to account for the majority of the global IoT market in 2020, and devices alone amount to about 31.8% of the total. In addition there are predicted IoT “endpoints” which will be connected to devices such as cars and refrigerators that will grow as a group from 10.3 million in 2014 to more than 29.5 million in 2020. Other components of the IoT market including purpose-built platforms, storage, security, application software, and “as a service” offerings are expected to capture a larger percentage of revenue as the market matures.
The Asia-Pacific region captured around 58.3% of the revenue from IoT in 2014, but this will shrink slightly to 51.2% in 2020 according to IDC predictions. In China specifically, a large, growing population is utilizing mobile devices in order to make manufacturing practices in the country more efficient. As a result, it is expected that there will be an increased number of new devices along with IoT standards. Well-networked countries like South Korea and Singapore may also choose to increase smart city initiatives that utilize IoT technology.
As the market for IoT continues to grow, companies will begin to look more for platforms and services that will help them manage and analyze the streams of data coming from connected cars, thermostats, and watches. The software needed to analyze that data has, fortunately, improved and companies are now using it to boost operations and seek out new business models. Embracing the Internet of Things may lead to increased use of open source software and standards, but there are also a number of measures that must be taken in the future in order to facilitate an IoT driven market.
Differing devices will most likely need to be managed by the same infrastructure as above, which will underscore the need for common standards. For this reason, collaboration with a number of stakeholders will be extremely important. Chief Information Officers are debating how they would secure and effectively manage the new devices that could enter their companies, as well as how they would handle the new types of data from different sources. The previously utilized life cycle used to replace parts and sensors in this type of technology will change as a result of this dynamic industry. Various technology firms such as Google, Intel Corp, and Samsung are relying heavily upon internet device-connected homes for future revenues and profits, so these changes will need to be made.