In a new update to the Worldwide Semiannual Internet of Things Spending Guide, the International Data Corporation (IDC) forecasts that U.S. organizations will invest more than $232 billion in Internet of Things (IoT) hardware, software, services, and connectivity this year. And IDC expects U.S. IoT revenues will experience a compound annual growth rate (CAGR) of 16.1% over the 2015-2019 forecast period, reaching more than $357 billion in 2019.
The industries leading the way in U.S. 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. The IoT use cases receiving the greatest levels of investment from U.S. organizations across these three industry segments are:
- Manufacturing Operations, which supports digitally-executed manufacturing, or how manufacturers use intelligent and interconnected I/O (input output) tools – e.g. sensors, actuators, drives, vision/video equipment etc. – to enable the different components in the manufacturing field – e.g. machine tools, robots, conveyor belts etc.– to autonomously exchange information, trigger actions and control each other independently.
- Freight Monitoring, which uses radio frequency identification (RFID), global positioning system (GPS), GPRS, and GIS technologies to create an intelligent, Internet-connected transportation system. This system carries out the intelligent recognition, location, tracking and monitoring of freight and cargo through exchanging information and real-time communications via wireless, satellite or other channels.
- Smart Buildings, which utilize advanced automation and integration to measure, monitor, control, and optimize building operations and maintenance. The key concept is optimization – meaning the deployment of a set of integrated control systems capable of adapting in real time to both internal policies and external signals. These systems manage how building equipment operates to use energy in the most efficient and cost-effective way.
Looking across all U.S. industries, these three IoT use cases will receive the greatest levels of investment throughout IDC’s forecast. The next three largest IoT use cases in terms of U.S. revenue will be Remote Health Management, Smart Grid (Electricity), and Smart Home. The IoT use cases that will experience the greatest revenue growth in the U.S. 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,” saidMarcus 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 U.S. 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.
The Worldwide Semiannual Internet of Things Spending Guide forecasts IoT revenues for 12 technologies and 47 use cases across 20 vertical industries in eight regions and 52 countries. Unlike any other research in the industry, the comprehensive spending guide was designed to help vendors clearly understand the industry-specific opportunity for IoT technologies today.
To learn more about IDC, please visit www.idc.com