Steady Commercial and Consumer Adoption Will Drive Worldwide Spending on the Internet of Things to $1.1 Trillion in 2023, According to a New IDC Spending Guide

FRAMINGHAM, Mass.–(BUSINESS WIRE)–#IDCSpendingGuide–Worldwide spending on the Internet of Things (IoT) is forecast to pass
the $1.0 trillion mark in 2022, reaching $1.1 trillion in 2023. A new
update to the International Data Corporation (IDC)
Worldwide
Semiannual Internet of Things Spending Guide
shows the compound
annual growth rate (CAGR) for IoT spending over the 2019-2023 forecast
period will be 12.6%.

“Spending on IoT deployments continues with good momentum and is
expected to be $726 billion worldwide this year,” said Carrie
MacGillivray
, group vice president, Internet
of Things
, 5G, and Mobility
at IDC. “While organizations are investing in hardware, software, and
services to support their IoT initiatives, their next challenge is
finding solutions that help them to manage, process, and analyze the
data being generated from all these connected things.”

The three commercial industries that will spend the most on IoT
solutions throughout the forecast are discrete manufacturing, process
manufacturing, and transportation. Together, these three industries will
account for nearly a third of worldwide spend total in 2023. The primary
IoT use case for the two manufacturing industries will be manufacturing
operations while transportation industry spending will largely go toward
freight monitoring.

The consumer market will be the second largest source of IoT spending in
2019, led by smart home and connected vehicle use cases. With the
fastest five-year growth rate across all industries (16.8% CAGR), the
consumer market is forecast to overtake discrete manufacturing to become
the largest source of IoT spending by 2023.

IoT services will be the largest technology category through the end of
the forecast after overtaking hardware spending this year. Together,
these two categories account for roughly two thirds of all IoT spending.
Services spending goes toward traditional IT and installation services
as well as ongoing services such as content as a service. Hardware
spending is dominated by module/sensor purchases. Software will be the
fastest growing technology category with a five-year CAGR of 15.3% with
a focus on application and analytics software purchases.

Two additional trends within the IoT software category include the
dominance of vertical industry IoT platforms and the rise of cloud
deployments for IoT software. More than three quarters of all spending
on IoT platform software – middleware that provides the device
management, connectivity management, data management, visualization, and
applications enablement for connecting IoT endpoints – will go toward
software packages that integrate and support devices, applications, data
schemas, and standards of a single industry. And firms are increasingly
deploying their IoT software, including applications, analytics
software, and IoT platforms, to the cloud. By the end of the forecast,
nearly one third of IoT software spending will go toward public cloud
deployments, compared to less than 20% spent on cloud deployments in
2018.

“The new Deployment Type segmentation in the IoT Spending Guide draws
sharp lines that identify opportunities for software growth via public
cloud services. Segmented at the deepest level, clients can now
prioritize strategy planning at the region/country, industry, and use
case levels,” said Marcus
Torchia
, research director, Customer
Insights & Analysis
.

The United States and China will account for roughly half of all IoT
spending throughout the forecast, followed by Western Europe and
Asia/Pacific (excluding Japan and China). The regions that will see the
fastest IoT spending growth are Latin America and the Middle East and
Africa with CAGRs of 23.1% and 19.5% respectively.

The Worldwide
Semiannual Internet of Things Spending Guide
forecasts IoT spending
for 14 technology categories and 59 named use cases across 20 industries
in nine regions and 53 countries. Unlike any other research in the
industry, the comprehensive spending guide was designed to help vendors
clearly understand the industry-specific opportunity for IoT
technologies today.

About IDC Spending Guides
IDC’s Spending Guides provide a
granular view of key technology markets from a regional, vertical
industry, use case, buyer, and technology perspective. The spending
guides are delivered via pivot table format or custom query tool,
allowing the user to easily extract meaningful information about each
market by viewing data trends and relationships.

For more information about IDC’s Spending Guides, please contact Monika
Kumar at [email protected].

About IDC
International Data Corporation (IDC) is the
premier global provider of market intelligence, advisory services, and
events for the information technology, telecommunications, and consumer
technology markets. With more than 1,100 analysts worldwide, IDC offers
global, regional, and local expertise on technology and industry
opportunities and trends in over 110 countries. IDC’s analysis and
insight helps IT professionals, business executives, and the investment
community to make fact-based technology decisions and to achieve their
key business objectives. Founded in 1964, IDC is a wholly-owned
subsidiary of IDG,
the world’s leading media, data and marketing services company. To learn
more about IDC, please visit www.idc.com.
Follow IDC on Twitter at @IDC
and LinkedIn.

Contacts

Marcus Torchia
[email protected]
508-988-7571

Michael
Shirer
[email protected]
508-935-4200

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