Research firm IDC has published a new report forecasting that spending on IoT worldwide to grow 16.7% year-over-year in 2017, reaching US$800 billion overall. The growth will continue for the next five years to reach US$1.4 trillion by 2021.
This year will attract a great deal of investment in the IoT since many industries have seen the value of IoT applications.
“The discussion about IoT has shifted away from the number of devices connected. The true value of IoT is being realized when the software and services come together to enable the capture, interpretation, and action on data produced by IoT endpoints,” said Carrie MacGillivray, vice president of Internet of Things and Mobility at IDC, in a statement.
Main sectors attracting investment in 2017 include manufacturing operations (US$105 billion), smart grid technologies for electricity, gas and water (US$56 billion), freight monitoring (US$50 billion), production asset management (US$45 billion) and smart building technologies (US$40 billion).
While smart home was not mentioned as one of the main sectors making big investment, IDC pointed out that the smart home industry will experience a growth of 19.8% CAGR over the next five years.
From a technology perspective, the most monetary investment will be made on hardware until 2021, especially modules and sensors that connect endpoints to networks, according to the research firm.
However, after 2021, the service category will overtake hardware spending. Services spending will be about evenly split between ongoing and content services and IT and installation services. The fastest growing areas of technology spending are in the software category, where horizontal software and analytics software will have five-year CAGRs of 29.0% and 20.5%, respectively.
Geographically, Asia Pacific (excluding Japan by IDC’s definition), will find itself in the lead position in IoT investment, which is expected to reach US$455 billion in 2021, followed by the United States and Western Europe, spending US$421 billion and US$274 billion, respectively.
The manufacturing sector will lead the IoT investment in the three regions, followed by utilities and transportation in Asia Pacific and Western Europe, and transportation and consumer IoT purchases in the United States.