The global market for Internet of Things technology comprising software, services, connectivity, and devices reached $130bn this year – and is projected to reach $318bn by 2023, according to new data.
Research company GlobalData forecasts show that solutions for utilities, government and manufacturing dominate the market, with a total of 58 per cent of the opportunity in 2018 and a slighter smaller 55 per cent of the market in 2023. Energy and transportation are other major sectors, with a combined 15 per cent of the market in both 2018 and 2023.
GlobalData notes that “while IoT devices and connectivity get a lot of airplay from vendors and operators, software and services clearly comprise the largest opportunity”. This category includes engineering, installation, maintenance and project management, as well as IoT platforms, application development services, and software. It also includes cloud computing, machine learning and security services associated with IoT deployments.
While software and services still clearly lead in revenue by the end of the period, the growth rate from 2018 to 2023 is slightly higher for connectivity and devices, as new LPWAN and 5G services and the rise of edge computing, respectively, will drive higher revenue growth.
GlobalData technology analyst Kathryn Weldon said: “The diverse ecosystem of providers offering software and services makes this segment especially competitive. Operators are vying to offer value-added services beyond connectivity, while network and infrastructure vendors are branching out into IoT platforms and applications.
“IT service providers, systems integrators and consultants are providing a wealth of consulting and integration services, while business software vendors and vertical VARs and specialists are providing IoT application development and ‘pre-shrunk’ applications.”
She said that “it is too soon to say whether there is room for all of the different vendors chasing many of the same verticals, with, in many cases, overlapping capabilities. What is clear is that IoT remains a highly strategic growth market in the eyes of all of these vendors; in spite of the fact that some form of IoT has been around for over twenty years, the real high growth cycle for this market is just beginning.”
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