Internet of Things Spending to Hit $1.7 Trillion by 2020

According to the IDC report, devices, connectivity, and IT services will make up the majority of the IoT market in 2020.

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The Internet of Things (IoT) continues to gain momentum as vendors and enterprises embrace the opportunities this market presents, with IoT spending expected to hit $1.7 trillion by 2020, according to a report from IDC.

IDC defines the IoT as a network of networks of uniquely identifiable endpoints--"things"--that communicate without human interaction using IP connectivity.

IDC has identified the IoT ecosystem as containing a complex mix of technologies including, but not limited to, modules and devices, connectivity, IoT purpose-built platforms, storage, servers, security, analytics software, IT services, and security.

"There are several key areas where we see IoT growing. In particular we see manufacturing operations as the leader for the next three years followed by the public sector and then asset management," Vernon Turner, senior vice president and research fellow for IoT at IDC, told eWEEK. "There is a distinct difference in the size of the consumer wearable market and the industrial and enterprise market, and while the wearables gets a lot of public attention, the real business happens in the latter markets."

According to the IDC report, devices, connectivity, and IT services will make up the majority of the IoT market in 2020.

Together, they are estimated to account for more than two-thirds of the worldwide IoT market in 2020, with devices (modules/sensors) alone representing 31.8 percent of the total.

"Consumers are and should be concerned over security. Any time a device is connected to a network, IT needs to make sure that the data and device are in compliance with corporate policies,” Turner said. "In doing so, the data is at least safeguarded to the same standard as all other sources such as ERP, CRM, transactional data based. However, there needs to be two ways to segment the security and privacy discussion."

He said data generated from the public sector belongs mainly to the citizens. As such, it needs to be treated according to certain confidentiality rules, such as HIPPA in the U.S. Data in the enterprise and private sector is a company's intellectual property and as such, it is a competitive resource and revenue source, and is subject to normal IT audit requirements.

By 2020, IDC expects that IoT purpose-built platforms, application software, and "as- a- service" offerings will capture a larger percentage of revenue.

"It is still a very nascent market--there are lots of companies chasing the huge opportunity, but again from two distinct sides. There are those from industry and those from IT, and both sides realize that whoever creates an IoT platform to manage the devices…and the data could have significant market leadership," Tuner said. "To that end, we see PTC, GE, and Schneider Electric as leaders on the industry side, and of course IBM, SAP, and Hitachi Data Systems on the IT side."