- The enterprise market will drive IoT device adoption over the next five years. (The IoT, or the Internet of Things, is a network of internet-connected devices that might be monitored or controlled remotely by a user via a computing device.) Of the three main IoT markets — enterprise, home, government — enterprise will have the largest device share, accounting for 39% of the roughly 23 billion active IoT devices we expect by the year 2019.
- The enterprise IoT market will see robust revenue growth. Spending on enterprise IoT products and services will grow at a five-year compound annual growth rate (CAGR) of 40% between 2014 and 2019, and reach $255 billion globally by 2019, up from $46.2 billion this year, according to our estimates.
- Most of the spending will go toward software and services, while hardware sales will account for a very small slice. Enterprise-focused IoT software and services sales will reach $43.9 billion by year-end, while hardware will account for about $2.3 billion in revenue, according to our estimates.
- Enterprise companies will use over 9 billion IoT devices by 2019. The majority of the devices within the enterprise will not be as visible or attractively designed as home consumer devices (e.g., the Nest thermostat). They will be inexpensive, small, rudimentary internet-connected sensors and chips attached to once-inert devices.
- Globally, manufacturing will be the industry that spends the most on IoT services and devices. Manufacturing IoT investment will reach $140 billion over the next five years. Manufacturers will use the IoT to improve production and monitor and maintain infrastructure. For example, a sensor might tell a factory manager that a machine needs repair in order to work at full capacity.
- There are significant barriers that must be addressed in order for more businesses to adopt IoT systems, especially cost and security. Besides the high costs for installation, companies must put resources behind managing the data that will flow out of the IoT to make it useful. On the security side, it may be easier to launch an attack on a company's operations, once the infrastructure is all internet-connected.
THE ENTERPRISE INTERNET OF THINGS MARKET
In our first Internet of Things market report, we said the enterprise market would be the largest of our [...]