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The Internet of Things (IoT) is expected to have a major, efficiency- and productivity-enhancing impact on how manufacturers and other companies in industrial settings conduct businesses. A new forecast from market research firm Technavio paints a rosy picture for IT vendors that specialize in industrial IoT.
According to the analyst group, the market for industrial IoT software and services will reach nearly $132 in 2020. Between now and then, the market will expand at a compound annual growth rate (CAGR) of 7 percent.
In terms of demand, Technavio has identified the Asia-Pacific (APAC) region as the largest market for industrial IoT.
Last year, the industrial IoT market generated $38 billion in sales in the region, a number that will reach $54 billion in 2020. APAC countries are investing heavily, including South Korea, which plans to pour over $3.6 billion into the IoT by 2020.
The island nation of Japan is also jumping on the bandwagon.
"Japan has introduced initiatives such as the Industrial Value Chain Initiative forum in 2015 to boost the country's industrial Internet revolution, including the IIoT [industrial IoT]," said Amrita Choudhur, a lead machine-to-machine and connected devices industry analyst at Technavio, in a statement. "Members of this forum include major Japanese companies in the electric, IT, machinery, and automobile sectors such as Mitsubishi Electric, Fujitsu, and Panasonic."
In North America, efforts like the Industrial Internet Consortium will help popularize IoT among big businesses. Formed by AT&T, Cisco, GE, IBM and Intel in 2014, the group has over 200 members. The consortium has attracted, many major companies such as 3M, ABB, Accenture, Pitney Bowes, Oracle, Samsung, and Microsoft," stated Technavio. "There is a significant trend of IoT investments, consolidations, and partnerships among these organizations to gain competitive advantages."
Somewhat unsurprisingly, the U.S. will drive sales in the North America market. However, its neighbor to the north can also be counted on to lift the market higher.
"IIoT solutions are widely used by both small and large companies across Canada. Industries such as the pulp and paper and manufacturing are the major users of the IIoT," observed Choudhur. "Subsidiaries of major multinational corporations work closely with major IIoT companies such as Cisco to adopt IIoT in various manufacturing processes."
Finally, despite some resistance from the old guard, the European industrial IoT market will grow at CAGR of over 2020 during the forecast period. Led by the U.K. and Germany, the market is getting major support from the European Research Cluster (IERC), a group focused on coordinating and the efforts of IoT projects funded by the European Union.
Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.
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