A transformation is under way that will see the worldwide market for Internet of things (IoT) solutions grow from $1.9 trillion in 2013 to $7.1 trillion in 2020, according to a report from IT research firm IDC.
The worldwide IoT installed base is projected to see a compound annual growth rate (CAGR) of 17.5 percent from 2013 to 2020.
The study updates the worldwide IoT units installed and now includes the revenue opportunity split by region.
IDC defines IoT as a network of networks of uniquely identifiable endpoints—things—that communicate without human interaction using IP connectivity, be it locally or globally.
The full breadth of the IoT ecosystem revenue is put forth in the revenue forecast, encompassing revenue from the IoT system shipments themselves as well as revenue from connectivity services, infrastructure, purpose-built IoT platforms, applications, security, analytics and professional services attributable to the base of installed IoT systems.
"The worldwide IoT market is exploding, and IDC's research examines the full breadth of the IoT ecosystem," Carrie MacGillivray, program vice president for mobile services, IoT and network infrastructure at IDC, said in a statement. "IoT solutions are at the heart of IDC's view of the 3rd Platform and the four pillars—mobility, social business, big data/analytics, and cloud—resulting in millions of applications available to billions of end points."
The research indicated that individuals at a global level are developing a high affinity for full-time connectivity, which makes consumer IoT a compelling proposition.
The report also stated that businesses appear intrigued by the efficiencies, business process implications and revenue opportunities IoT solutions can generate.
"Businesses are taking the necessary steps to gain a deeper understanding of IoT and the overall value," Vernon Turner, senior vice president of IDC's enterprise infrastructure, consumer, network, telecom and sustainability research, said in a statement. "Technology vendors are evolving their solutions in a supply-driven market that's edging toward becoming a more demand-driven market."
In an earlier report, the firm projected the technology and services revenue from IoT to expand from $4.8 trillion in 2012 to $7.3 trillion by 2017 at an 8.8 percent CAGR, with the greatest opportunity initially in the consumer, discrete manufacturing and government vertical industries.
"The vertical opportunity that arises from IoT is already in play, but only if the need for vertical expertise is recognized and offered," the report stated. "Realizing the existence of vertical opportunity is the first step to understanding the impact—and therefore market opportunity that exists—for IT vendors."