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This year, the spending on the Internet of Things (IoT) is poised to hit $800 billion worldwide, a 16.7 percent increase over 2016, predicts technology research firm IDC. In 2021, that figure will nearly reach $1.4 trillion.
In 2017, increased demand for industrial IoT solutions and services will help lift the overall market. Top segments include manufacturing operations with an estimated $107 billion in spending, followed by freight monitoring at $50 billion.
The smart grid segment will attract $56 billion as more power producers and gas and water utilities jump onboard. IoT solutions that aid businesses with their production asset management will also be in high demand ($45 billion).
By 2021, those segments will continue to lead the IoT market, IDC predicts. In terms of sheer growth, airport facilities automation blows away all others with a five-year CAGR (compound annual growth rate) of 33.4 percent, followed by electric vehicle charging with a CAGR of 21.1 percent. Looking for innovative ways to engage with consumers and ring up additional sales, retailers will make in-store contextual marketing one of the fastest growing market segments with a 20.2 percent CAGR.
While still young, the IoT market is showing some signs of maturity, IDC found.
"The discussion about IoT has shifted away from the number of devices connected," said Carrie MacGillivray, vice president, Internet of Things and Mobility at IDC, in a June 14 announcement. "The true value of IoT is being realized when the software and services come together to enable the capture, interpretation, and action on data produced by IoT endpoints."
Finding a home in a wide variety of industries, the IoT-enabled horizontal software category will experience a five-year CAGR of 29 percent. And given the sheer amount of data enterprises will need to make sense of, it comes at little surprise that the analytics software category is expected to register brisk growth (20.5 percent CAGR).
And while the threats to IoT systems mount, businesses will be looking to bulk up their defenses against cyberattacks. Security hardware and software investments are poised to increase at CAGRs of 15.1 percent and 16.6 percent, respectively.
"As enterprises are adopting to new and innovative services provided by different vendors a lot of new threats are introduced, so it's very important to upgrade existing security systems to ensure that an optimal business outcome can be reached and ROI [return on investment] can be justified," said IDC research manager Ashutosh Bisht, in a statement.
Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.