IoT spending to reach $1.4 trillion by 2021, says IDC

IoT spending to reach $ 1.4 trillion by 2021, says IDC

In the latest update to its Worldwide Semiannual Internet of Things Spending Guide, research company IDC has forecast that worldwide spending on IoT will grow 16.7 percent year over year in 2017, to reach just over $ 800 billion.

The company suggests that this increase in spending is set to continue over the four years to 2021, when it predicts that investments in the hardware, software, services and connectivity that enable IoT will total as much as $ 1.4 trillion.

“The discussion about IoT has shifted away from the number of devices connected,” said Carrie MacGillivray, vice president of IoT and mobility at IDC. “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.”

Read more: Frost & Sullivan highlights five IoT growth areas for 2017

Industry snapshots

IDC says that the industries that will attract the largest investment in 2017 include: manufacturing ($ 183 billion), with manufacturing operations attracting $ 105 billion in investment; utilities ($ 66 billion), with smart grid technologies making up $ 56 billion of that spend; and transportation ($ 85 billion), with spend on freight monitoring totaling $ 50 billion.

Source: IDC Worldwide Semiannual Internet of Things Spending Guide, 2016H2

 

By 2021, the use cases investment picture looks much the same; however, spending on airport facilities automation and electric vehicle charging are set to experience the fastest growth rates at 33.4 percent and 21.1 percent, respectively. Spending on smart home technologies is forecast to grow by 19.8 percent to 2021.

Read more: IoT on course to dominate connected landscape, says Cisco

Technologies and regions

From a technology perspective, IDC claims that hardware, notably modules and sensors, will be the largest spending category until the last year of the forecast, when it will be overtaken by the faster growing services category.

By region, the Asia-Pacific region, excluding Japan, is set to be the biggest spender throughout the forecast period, with spending expected to reach $ 455 billion in 2021. The US will come a close second, with $ 421 billion spent on IoT in 2021, and Western Europe will be third, spending $ 274 billion in 2021.

IDC’s Worldwide Semiannual Internet of Things Spending Guide forecasts IoT spending for 12 technologies and 54 use cases across 20 vertical industries in eight regions and 52 countries.

Read more: Six out of ten IoT projects fail at trial stage, says survey

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Internet of Business

Worldwide Spending on the Internet of Things Forecast to Reach Nearly $1.4 Trillion in 2021

Worldwide Spending on the Internet of Things Forecast to Reach Nearly $ 1.4 Trillion in 2021

A new update to the International Data Corporation (IDC) Worldwide Semiannual Internet of Things Spending Guide forecasts worldwide spending on the Internet of Things (IoT) to grow 16.7% year over year in 2017, reaching just over $ 800 billion.

By 2021, global IoT spending is expected to total nearly $ 1.4 trillion as organizations continue to invest in the hardware, software, services, and connectivity that enable the IoT.

“The discussion about IoT has shifted away from the number of devices connected,” said Carrie MacGillivray, vice president, Internet of Things and Mobility at IDC.

“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.”

“With our Worldwide IoT Spending Guide, IDC provides insight into key use cases where investment is being made to achieve the business value and transformation promised by the Internet of Things.”

The IoT use cases that are expected to attract the largest investments in 2017 include manufacturing operations ($ 105 billion), freight monitoring ($ 50 billion), and production asset management ($ 45 billion).

Smart grid technologies for electricity, gas and water and smart building technologies are also forecast to see significant investments this year ($ 56 billion and $ 40 billion, respectively). While these use cases will remain the largest areas of IoT spending in 2021, smart home technologies are forecast to experience strong growth (19.8% CAGR) over the five-year forecast. The use cases that will see the fastest spending growth are airport facilities automation (33.4% CAGR), electric vehicle charging (21.1% CAGR), and in-store contextual marketing (20.2% CAGR).

The industries making the largest IoT investments in 2017 are Manufacturing ($ 183 billion), Transportation ($ 85 billion), and Utilities ($ 66 billion). Cross-Industry IoT investments, which represent use cases common to all industries, such as connected vehicles and smart buildings, will be $ 86 billion in 2017 and rank among the top segments throughout the five-year forecast. Consumer IoT purchases will be the fourth largest market segment in 2017 at $ 62 billion, but will grow to become the third largest segment in 2021. Meanwhile, The industries that will see the fastest spending growth are Insurance (20.2% CAGR), Consumer (19.4%), and Cross-Industry (17.6%).

From a technology perspective, hardware will be the largest spending category until the last year of the forecast when it will be overtaken by the faster growing services category. Hardware spending will be dominated by modules and sensors that connect end points to networks, while software spending will be similarly dominated by applications software. 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. Security hardware and software will also see increased investment, growing at 15.1% and 16.6% CAGRs, respectively.

“As enterprises are adopting to new and innovative services provided by different vendors a lot of new threats are introduced, so it’s very important to upgrade existing security systems to ensure that an optimal business outcome can be reached and ROI can be justified,” said Ashutosh Bisht, research manager for IT Spending across APeJ.

Asia/Pacific (excluding Japan)(APeJ) will be the IoT investment leader throughout the forecast with spending expected to reach $ 455 billion in 2021. The second and third largest regions will be the United States ($ 421 billion in 2021) and Western Europe ($ 274 billion).

Manufacturing will be the leading industry for IoT investments in all three regions, followed by Utilities and Transportation in APeJ and Western Europe, and Transportation and Consumer in the United States. Cross-Industry IoT spending will be among the leading categories in all three regions as well.

The regions that will experience the fastest growth in IoT spending are Latin America (21.7% CAGR), the Middle East and Africa (21.6% CAGR), and Central and Eastern Europe (21.2% CAGR).

Find more info on the report here.

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IoT Business News

C3 IoT closes Series E financing round at $1.4 billion pre-money valuation

C3 IoT, a fast-growing leader in platform as a service (PaaS) enterprise software for big data, AI, and IoT applications, has announced a Series E financing round at a $ 1.4 billion pre-money valuation. The company had previously closed a $ 70 million Series D equity financing led by TPG Growth in September of 2016.

The funding round was led by Breyer Capital, a global firm with investment interest in long term-oriented entrepreneurs and teams working in artificial intelligence (AI), the funds will be used to boost C3 IoT’s growth by expanding its product footprint and customer service capacity globally. The list of investors includes Breyer Capital, TPG, Sutter Hill, Wildcat Venture Partners, Pat House, and Thomas Siebel. The amount of the financing was undisclosed.

C3 IoT has more than 20 industrial-scale deployments with more than 100 million connected IoT sensors.

The C3 IoT Platform enables the integration and analysis of unprecedented volumes of disparate data—including telemetry from industrial and commercial devices, enterprise operational systems, and extraprise data such as weather, traffic, and social media—into a unified cloud-based data image, and employs machine learning at scale, in near-real time, to deliver predictive insights that improve operational efficiencies, enhance customer engagement, and differentiate products and services.

The platform also provides pre-built SaaS applications, including predictive maintenance, fraud detection, energy management, and sensor network health, for organisations in manufacturing, oil and gas, healthcare, financial services, aerospace, transportation, telecommunications, and the public sector. The enterprise customers and system integrators also use the C3 IoT PaaS to rapidly build and deploy custom applications.

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