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The solutions and services market for the Internet of Things (IoT) will skyrocket to $1.7 trillion in 2020, nearly tripling 2014's haul of $655.8 billion, according to a new forecast from analyst firm International Data Corporation (IDC). During that time, the market will expand at a compound annual growth rate (CAGR) of 16.9 percent.
Businesses are beginning to wake up to the profit-enhancing potential of billions of connected devices and the data they generate. "While wearable devices are the consumer face of the Internet of Things, and where recognition of IoT appears to begin, the real opportunity remains in the enterprise and public sector markets," said IDC senior vice president Vernon Turner in a statement.
"The ripple effect of IoT is driving traditional business models from IT-enabled business processes to IT-enabled services and finally to IT-enabled products, which is beginning to disrupt the IT status quo," he continued.
IDC's research suggests that IoT enablement projects will have a major effect, not only on the data center, but also on how businesses allocate their IT dollars. In April, the group predicted that IoT workloads would jump 750 percent by 2019, sparking a data center boom and forcing organizations to rethink their technology strategies.
"Devices, connectivity, and IT services will make up the majority of the IoT market in 2020," stated IDC. "Together, they are estimated to account for over two-thirds of the worldwide IoT market in 2020, with devices (modules/sensors) alone representing 31.8% of the total." As more IoT-centric platforms, applications and as-a-service products hit the market, IDC expects that they will capture a bigger slice of the market by 2020.
Although it's early days, the IT industry is clearly bracing for strong IoT demand during the next few years.
Last year, market research firm Gartner predicted that the IoT would consist of a whopping 26 billion devices by 2020, helping to generate $300 billion in incremental revenue for vendors and service providers by the same year. Network operators will bear the brunt of linking all those devices for businesses, according to Verizon.
In February, the telecommunications giant and ABI Research forecast that by 2020, the number of business-to-business IoT connections worldwide will grow to 5.4 billion, up from 1.2 billion connections in 2014. Verizon's own network is beginning to feel the impact. The company reported that its IoT business experienced a 45 percent year-over-year sales increase and a 135 percent rise in 4G LTE activations in 2014.
Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.
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