Internet of Things (IoT) 2018 – Market Statistics and Trends
Let’s accept it – IoT is ubiquitous. And everyone possess some knowledge about it, if NOT everything. As per Business Insider, nearly $6T will be spent on IoT solutions over the next 5 years. And there will be 34B devices (IoT devices will account for 24B) connected to the internet by 2020, up from 10B in 2015. Approximately 69% of organizations have adopted or planning to adopt, IoT solutions within the next year. As a result, IoT deployments are now perhaps the most-anticipated, but least-understood, initiatives of IT departments today.
What is IoT
The Internet of Things (IoT) is essentially a system of machines or objects outfitted with data-collecting technologies so that those objects can communicate with one another. The machine-to-machine (M2M) data that is generated has a wide range of uses, but is commonly seen as a way to determine the health and status of things – inanimate or living.
The main purpose of IoT platforms is to reduce the complexities for IoT developers, service providers, and implementers. Think of an iceberg; most of the ice mass is submerged below the waterline. Similarly, many, if not most, IoT applications share a large percentage of core functionality. Functions such as rules for thresholds and alerts, multiprotocol support, over-the-air firmware downloads and remote diagnostics are largely the same whether the IoT application is a fleet management service or a smart meter deployment. Much like the visible tip of the iceberg, the aspects of the IoT application that are truly unique and differentiated are typically quite a small portion of the overall application.
According to Business Insider, the IoT ecosystem is comprised of an entity (smartphone, tablet, etc.) that functions as a remote to send a command or request for information over the network to an IoT device. The device will then perform the command or send information back over the network to be analyzed and displayed on the remote.
IoT Ecosystem Opportunities
With over 24 billion devices expected to be installed by 2020 according to Business Insider, the IoT ecosystem will touch almost every industry, including transportation, insurance, utilities, telecom, healthcare, smart homes, oil and gas and more. The investment in these opportunities over the next five years is expected to result in $13 trillion return on investment (ROI) by 2025.
Realizing the IoT Potential
The main barriers around the Internet of Things remain security, implementation and technological fragmentation. Horizontal management for IoT addresses several of these concerns. A standards-based, horizontal platform allows for greater access control to give control over Internet of Things devices and sensors. Organizations are able to manage data with end-to-end authentication and scale solutions across all vertices without having to be a solution for each application.
In spite of their enthusiasm for IoT, customers are concerned about security, integration and ROI
The biggest challenge slowing IoT adoption — according to 55.6% of respondents — is understanding the technology (Statista)
Proliferation of numerous nodes and devices being added to networks present malicious actors with innumerable attack vectors and possibilities to carry out their evil deeds, especially since a considerable number of them suffer from security holes. Scalability issues also contribute to the creation insecure IoT products. The fact is that many security solutions being used today have been created with generic computing devices in mind. IoT devices often lack the computational power, storage capacity and even proper operating system to be able to deploy such solutions.
Some of the data that IoT devices collect are very sensitive and are protected by legislations such as the Health Insurance Portability and Accountability Act (HIPAA) in the U.S. and are fundamentally different from our browsing and clicking habits. Yet the necessary precautions aren’t taken when storing the data or sharing it with other service providers. Vendors and manufacturers must either discard this data or remove the Personally Identifiable Information (PII) to make sure that consumers aren’t damaged in case of data breaches.
At present we rely on the centralized, server/client paradigm to authenticate, authorize and connect different nodes in a network. The future of IoT will very much have to depend on decentralizing IoT networks. Part of it can become possible by moving functionality to the edge, such as using fog computing models where smart devices such as IoT hubs take charge of time-critical operations and cloud servers take on data gathering and analytical responsibilities. Other solutions involve the use of peer-to-peer communications, where devices identify and authenticate each other directly and exchange information without the involvement of a broker. Networks will be created in meshes with no single point of failure. This model will have its own set of challenges, especially from a security perspective, but these challenges can be met with some of the emerging IoT technologies such as the Phantom protocol, or leveraging the success of other tried and tested models such as the blockchain.
Compatibility and Longevity Challenges
As an industry that is going through its baby steps, IoT is growing in many different directions, with many different technologies competing to become the standard. For instance, we currently have ZigBee, ZWave, Wi-Fi, Bluetooth and Bluetooth Low Energy (BTLE) all vying to become the dominant transport mechanism between devices and hubs. This will cause difficulties and require the deployment of extra hardware and software when connecting devices.
Other compatibility issues stem from non-unified cloud services, lack of standardized M2M protocols and diversities in firmware and operating systems among IoT devices.
Predictions of IoT
To get the statistics and forecasts, we have studied research reports, whitepapers and eBooks from below companies:
- Ericsson Mobility Report 2016
- Gartner Report 2017
- IHS Markit
Ericsson Mobility Report 2016
Internet of Things (IoT) sensors and devices are expected to exceed mobile phones as the largest category of connected devices in 2018, growing at a 23% compound annual growth rate (CAGR) from 2015 to 2021. Ericcson predicts there will be a total of approximately 28B connected devices worldwide by 2021, with nearly 16B related to IoT. The following graphic compares cellular IoT, non-cellular IoT, PC/laptop/tablet, mobile phones, and fixed phones connected devices growth from 2015 to 2021.
Gartner Report 2017
Gartner, Inc. forecasts that 8.4 billion connected things will be in use worldwide in 2017, up 31 percent from 2016, and will reach 20.4 billion by 2020. Total spending on endpoints and services will reach almost $2 trillion in 2017. Regionally, Greater China, North America and Western Europe are driving the use of connected things and the three regions together will represent 67 percent of the overall Internet of Things (IoT) installed base in 2017.
IHS forecasts that the IoT market will grow from an installed base of 15.4 billion devices in 2015 to 30.7 billion devices in 2020 and 75.4 billion in 2025
Forrester predicts fleet management in transportation, security and surveillance applications in government, inventory and warehouse management applications in retail and industrial asset management in primary manufacturing will be the hottest areas for IoT growth.
McKinsey estimates the total IoT market size in 2015 was up to $900M, growing to $3.7B in 2020 attaining a 32.6% CAGR.
Selected Key Partnerships in IoT
There are several key partnerships taken place in IoT. We have selected key ones in this post;
- GE and Apple partner on industrial Internet-of-Things platform
- InFluxData Teams With IBM And RedHat To Simplify Analyzing The IOT Data Deluge
- IBM, Fybr IoT Partnership Aims To Make Cities More Intelligent
- Microsoft Azure, United Technologies to partner on IoT, field and customer service, smart buildings
- Nokia partners with Bosch Connected Devices and Solutions for industrial IoT
- Microsoft and Cisco enable Azure IoT Suite to connect to Cisco Fog Deployments
- Nokia partners with AWS on cloud migration, 5G and IoT strategies
- Siemens and TCS join Forces for Industrial IoT on MindSphere
- Siemens Partners with SAP to Create MindSphere, an Open IOT Platform for Industrial Customers
IoT Trends by 2020
- Nearly four out of five (79%) companies surveyed have Internet of Things (IoT) initiatives in place today
- Almost half track (47%) customers through mobile apps, and 45% use IoT technologies to monitor production and distribution operations. However, only about one quarter track their products through embedded sensors or the customers who visit their premises
- The average company increased revenue 16% last year in the area of its business in which it had an IoT initiative. Nine percent of respondents attributed a revenue rise of more than 30% to their IoT efforts
- The higher the price of a company’s products, the more heavily it will spend on IoT this year. Companies whose products’ prices are more than $10 million will spend an average of $335 million, while those with product prices of $100 or less will spend an average of only $39 million.
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(Source: Ebook on IoT by Calsoft)