Manufacturing and utilities are currently the top industry verticals currently driving the Internet of Things (IoT), according to Gartner's Jim Tully, vice president and distinguished analyst at the research firm.
As of 2015, manufacturers have an estimated 307 million installed devices while utility companies are slightly behind with 299 million, said Tully in a Q&A on the Gartner website. In total, both verticals are responsible for over 600 million of the IoT devices currently in use.
"This makes intuitive sense; control systems using sensors have always been an integral part of manufacturing and automation processes, and we certainly see a lot of smart meter deployments by utilities leading to energy efficiency improvements and operations like automatic billing, energy management and monitoring," he stated. Their reign may soon be challenged, however.
"One of the fastest growing verticals is retail," Tully observed. "I find this to be a particularly interesting sector with a lot of IoT activity in operations and in customer-facing situations – often involving very innovative technology."
Not all enterprises are on board, at least not yet.
Gartner's research indicates that the biggest barrier to IoT adoption is simply finding use cases for it. This will change as IoT proliferates, Tully predicted. Cost and implementation concerns are fading, due in large part to cost-effective cloud solutions and tumbling sensor prices.
Between 2014 and 2019, sensor shipments will increase with compound annual growth rate (CAGR) of 11.4 percent, culminating in a total of 19.1 billion sensors by 2019. Meanwhile, average selling prices are expected to drop by a CAGR of -5 percent.
"Among enterprises that have started to seriously consider IoT, other issues like a lack of necessary skills and questions around security and privacy remain substantial barriers," he noted.
As for the hype surrounding IoT, it "is absolutely justified," Tully remarked.
Gartner predicts that by 2020, there will be 25 billion devices bringing the IoT to life -- a slight downward revision from 26 billion devices in an early 2014 forecast -- up from 4.9 billion units this year. "We estimate that the IoT will produce close to $2 trillion of economic benefit globally," Tully said.
Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.
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