The Web seems saturated with growth projections for the Internet of Things. From history, we know reasonably well that a majority of these projections will be wrong. However, it’s important not to get caught up in absolutes and instead look at the trends. All trends point up and to the right. The IoT is gaining momentum even though companies and governments will continue to struggle to define standards and determine the most effective deployment solutions among many alternatives across security, communications and connected device elements.
A recent article on www.forbes.com and authored by Louis Columbus, gathered a large number of projections. I want to highlght five of them that I think are most important as we head into 2018.
- Discrete Manufacturing, Transportation and Logistics, and Utilities will lead all industries in IoT spending by 2020, averaging $40B each.
This is not a surprising projection considering that these industries have a tremendous amount to gain through the IoT’s cost-savings opportunities. Whether from predictive maintenance, route inefficiencies to lower fuel consumption or supply chain monitoring, these industries are finding ways to leverage the IoT to generate business benefits that should be justified through calculable return on investments.
- Internet Of Things Market To Reach $267B By 2020 according to Boston Consulting Group
We have referenced this projection in an earlier article that explored the Internet of Things across consumer versus business applications. It”s a big number and according to other studies represents a CAGR between 19-23% year over year for the next five years. According to PwC, “IoT investments by businesses will grow from $215B in 2015 to $832B in 2020, while consumer spending on IoT solutions will rise from $72B to $236B.” Clearly, PwC is being much more aggressive than BCG in its projections. Overall, I do find some of these projections suspect without greater context that help define the specifics.
- Accenture estimates the IIoT could add $14.2T to the economy by 2020. The global market for Industrial Internet of Things (IIoT) is projected to grow at a 7.3% CAGR through 2020.
This is a tremendous stat. What’s also interesting is another stat referenced in this same SlideShare report. It stated, “87% of business leaders believe that the IIoT will result in the net creation of jobs.” Of course, these are higher skilled or customer-focused jobs that replace mundane tasks which will become automated.
- Improving customer experiences (70%) and safety (56%) are the two areas enterprises are using data generated from IoT solutions most often today. Gaining cost efficiencies, improving organizational capabilities, and gaining supply chain visibility (all 53%) is the third most popular uses of data generated from IoT solutions today. 53% of enterprises expect data from IoT solutions to increase revenues in the next year. 53% expect data generated from their IoT solutions will assist in increasing revenues in the next year. 51% expect data from IoT solutions will open up new markets in the next year. 42% of enterprises are spending an average of $3.1M annually on IoT. Source: 70% Of Enterprises Invest In IoT To Improve Customer Experiences.
As a B2B marketer (who happens to be very passionate about the IoT revolution) I absolutely love that “improving customer experiences” is a major driver of IoT adoption. A study by Customers 2020 Report stated, “by 2020, customer experience will overtake price and product as the key brand differentiator.” The ability to leverage data and intelligence derived from the IoT will help smart enterprises compete in entirely new ways and assist them in better understanding the buyer behaviors and usage patterns of their customers. There is definitely a tremendous opportunity here for industrial enterprises who struggle today with marketing effectively to support the changing B2B buyer landscape.
- By 2022, Pressure and Temperature sensors will account for 62% of all globally enabled IoT sensors. Light sensors (17.27%), Chemical (10.21%), Motion (8.35%) and other sensors (1.97%) are the remainder of the market. The following graphic provides a global IoT market forecast by sensor type in Source: Statista, Projected global Internet of Things enabled sensors market in 2022, by segment.
This was at first a surprising statistic but it ties well into the major IoT growth industries of Discrete Manufacturing, Transportation and Logistics, and Utilities. All of these industries involve pressure and temperature sensors across remote locations.
What do you think about these five projections – do you agree or do they seem out of touch with reality?
Also published on Medium.