Over the past couple of years, Internet of Things (IoT) was among the most hyped terms in IT industry. Worldwide, connected machines grew from 15.41 billion in 2015 to 17.68 billion in 2016, according to Statista. At this rate, the number of connected devices is expected to rise to approximately 23.14 billion in 2018, and 31 billion by 2020.
What is driving IoT worldwide?
While IoT is gaining popularity across all sectors, the market is dominated by three sub-sectors, says an analysis from GrowthEnabler & MarketsandMarkets. Smart Cities will dominate with 24 percent of the global IoT market share, followed by Industrial IoT and Connected Health at 24 percent and 20 percent market share respectively during the period 2016-20. Other major segments contributing to the growth of IoT include Smart Homes, Connected Cars, Smart Utilities and Wearables.
IoT endpoint spending categories
According to Statista, IoT spending by customer segment is expected to rise from USD 725.7 billion in 2017 to USD 985.35 billion in 2018. However, business segment (vertical specific) will be the top spending category, with an expected spending of around USD 736.54 billion during 2018
Major trends in IoT in 2018
- Big IoT gives way to smaller IoT tools
TBR has identified some of the interesting trends shaping the IoT world in the coming year. According to the research agency, the hype around IoT is diminishing, as customers and businesses alike are becoming realistic on their expectations around IoT. Thus the irrational ‘big IoT’ is giving way to smaller IoT projects driven by the customer’s specific need to get the work done within their limited capabilities. As a result, the focus of IoT in the coming year will shift to areas such as operational controls, business management, marketing, and sales, which would result in increased efficiency and cost savings.
2. IT will drive IoT to enable digital transformation
As businesses strive to modernize their IT, IoT grows to become an imperative component of their digital transformation efforts. Currently IoT implementation is facing several roadblocks including lack of standard products and selection of vendors. According to TBR, the IT providers will take the lead to address the IoT sprawl and shadow IoT in organizations, to enable a smooth transition to new platforms. These IT organizations could emerge as the internal IoT service providers by implementing key IoT projects by addressing the above challenges. This in turn will benefit the entire IoT ecosystem, as it creates a pathway for vendors to the corporate IT.
3. Artificial Intelligence (AI) will drive IoT in data analytics
With AI taking over some of the data analytics functions in organizations, IoT is expected to add value to it, especially as organizations are showing interest in investing AI tools for improved efficiency and reducing manpower costs. An extension to this, TBR expects a more democratized approach in which companies like Microsoft implement AI to its popular applications like Excel enabling businesses to implement AI capabilities in a cost-effective manner.
Footnote: As evident from the several use cases, IoT does not exist as a single technology; rather it complements the existing and emerging technologies but adds its own unique capabilities through a number of applications. As noted by Harriet Green, chief of IoT at IBM, “It’s [IoT] not so much about the emergence of new technology, it’s the convergence – the ability to use sensors for everything in the world to basically be a computer, whether it’s your contact lens, your hospital bed or a railway track.”