IDC: IoT spending accelerates as use cases develop
IDC predicts US IoT spending to grow by 16.1% annually as solutions gain traction
Spending on Internet of Things technologies is accelerating in developed markets as new use cases and deployment models are launched, according to IDC.
The analyst company's Worldwide Semiannual Internet of Things Spending Guide, predicts that spending on IoT solutions, including hardware, software, services and connectivity, will reach $31bn in the US this year. IoT revenues in the US are set to grow by a CAGR of 16.1% from 2015-2019, to reach annual revenue of $357bn.
The industries leading the way in US IoT investments are Manufacturing and Transportation at $35.5 billion and $24.9 billion, respectively, in 2016. However, cross-industry investment, which represents use cases common to all industries, will approach $31 billion this year.
IDC sees the greatest levels of investment in three areas, including manufacturing operations, using intelligent and interconnected tools and devices for advanced operations; freight monitoring, utilising RFID, GPS, GPRS and GIS technologies to provide intelligent recognition, location, tracking and monitoring of freight and cargo; and smart buildings which utilize advanced automation and integration to measure, monitor, control, and optimize building operations and maintenance.
The analyst company predicts three IoT use cases will receive the greatest levels of investment until 2019, namely remote health management, smart grid (electricity), and smart home. The IoT use cases that will experience the greatest revenue growth in the US over the 2015-2019 forecast period are In-Store Contextualized Marketing, Connected Vehicles, and Insurance Telematics.
"A use case represents a detailed composition of a technology investment that is made to produce a set of end user benefits," said Marcus Torchia, research manager, IoT for IDC's Customer Insights and Analysis team. "The long term opportunity for IoT vendors is helping to identify and create immediate and residual benefits for end users through their technologies. We see strong opportunities across many industries. For example, in highly instrumented verticals like manufacturing and transportation, large data sets are used to optimize operational processes and extend the life of high capital cost assets. In other sectors like healthcare and consumer, IoT technology is being used to produce benefits that improve quality of life."
While Manufacturing and Transportation will lead the US in terms of overall IoT investments, the Insurance, Retail, and Healthcare industries will see IoT spending levels increasing by 135%, 101%, and 96%, respectively, over the forecast period. In addition to driving some of the largest IoT investments, the cross industry segment will also see revenue growth of more than 100% through 2019.