Internet of Things Spending to Reach 1.7 Trillion by 2020

The worldwide Internet of Things (IoT) market will grow from $655.8 billion in 2014 to $1.7 trillion in 2020, according to research company International Data Corporation (IDC).

IDC defines the IoT as a network of identifiable endpoints that communicate using IP connectivity without human interaction, including smart appliances, automated public transit and remote health monitoring, among others. The company predicts that by 2020, devices, connectivity and IT services will represent more than two-thirds of the worldwide IoT market, with devices alone accounting for 31.8 percent of the total

While wearables, like the Apple Watch, remain the most visible faction of the IoT, the real opportunity remains in the enterprise and public sector markets, since the majority of consumers can’t yet afford pricey connected devices, according to Carrie MacGillivray, vice president of IoT and mobile for IDC.

“The largest opportunity is the seemingly endless number of endpoints that businesses and governments can connect. For consumers, we have a finite amount of disposable income and appetite for devices. While the connected home represents an interesting area, there are limits to the growth potential, especially over the next 5 to 6 years,” MacGillivray explains. “Think of how many of your friends have connected light bulbs today? Nest thermostats? Connected cars? Smart watches? It’s going to take some time for any broad adoption.”

Meanwhile, IDC also estimates that IoT purpose-built platforms, application software, and “as a service” offerings will soon make up a larger percentage of revenue.

The phrase IoT reflects the growing number of smart, connected devices that shift consumer behavior and present new opportunities for digital marketers. Major industry players are looking to connect more and more devices. For example, last week, Google introduced a communication system called Weave that will help devices talk to each other using a common language, while Amazon recently unveiled Internet-connected Dash Buttons.

IDC’s new forecast is part of the company’s three completed reports defining the IoT market and identifying opportunities: the Worldwide Internet of Things Taxonomy 2015, the Worldwide Internet of Things Forecast 2015-2020, and the Worldwide IoT Spending Guide by Vertical.

To get more insights, you can request the full report from IDC.

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