Internet of trillion-dollar Things as business spending skyrockets
- 14 December, 2015 06:50
Worldwide spending on the Internet of Things (IoT) will grow at a 17.0 percent compound annual growth rate (CAGR) from $US698.6 billion in 2015 to nearly $US1.3 trillion in 2019.
On a geographic basis, Asia/Pacific is the clear leader when it comes to IoT spending with more than 40 percent of the worldwide total coming from this region in 2015.
However, the regions that will experience the fastest growth in IoT spending over the five-year forecast period are Latin America (26.5 percent CAGR), followed by Western Europe, and Central and Eastern Europe.
“The Asia/Pacific region’s robust IoT spending outlook builds on three dynamics,” says Marcus Torchia, Research Manager, Internet of Things.
“Developing countries’ technology investment needs are not fully met with traditional IT, which is allowing IoT investments to accelerate; government investments in infrastructure development and local business modernisation, in China, India and the Philippines for example, are incorporating more and more IoT elements; and a burgeoning new consumer class is accelerating expenditures in goods and services, including those with IoT components.”
From a vertical industry perspective, Manufacturing and Transportation led the way in worldwide IoT spending with 2015 totals of $US165.6 billion and $US78.7 billion, respectively.
Over the next five years, the industries forecast to have the fastest IoT spending growth will be Insurance (31.8 percent CAGR), Healthcare, and Consumer - the fast expanding Consumer IoT market will be the third largest IoT spending category by the end of the forecast period.
“Manufacturing and Transportation are both a good fit for IoT deployments,” adds Vernon Turner, Senior Vice President and IoT Research Fellow, IDC.
“Both industries have been connecting their supply chains, products, customers, and even workers for some time now, and really embrace the value of business outcomes.”
Because the Internet of Thing - a network of uniquely identifiable, autonomously communicating endpoints (or "things") - is being applied in so many different ways across industries, Turner believes it's not surprising that the fastest growing use cases vary from region to region.
In Asia/Pacific, insurance telematics is being used to monitor driver behaviour through a vehicle-mounted device and the data is rapidly being employed as a means of determining insurance policies and rates.