IoT Market to Touch $267 Billion by 2020: BCG
The IoT market is on a growth trajectory, and is expected to reach €250 billion or $267 billion, as per a research by the Boston Consulting Group. The report, titled “Winning In IoT, It’s All about the Business Processes”, outlines the growth opportunities and the current use cases that will make this possible. Services and applications are touted as the main propellers of future IoT growth. In fact, between 2015 and 2020, it is expected to exhibit a CAGR of at least 20%.
The report outlines the importance of the B2B IoT market, stating that services, IoT analytics, and applications will be the fastest growing of IoT technology stacks. Each of these independently, will generate $64.1B) of spends by 2020. And together they will be responsible for 60% of the IoT growth. This is because, IoT will find widespread business applications, with most of software companies, hardware companies and internet companies vying for a piece of the IoT pie.
The report talks about the number of use cases but points out that 50% of IoT spending by 2020, will be driven by discrete manufacturing, transportation and logistics, and utilities. In fact, the highest impact will be found on non-tech industries, according to BCG. The main factor for IoT growth will be the need for end-to-end integration solutions that are secure and scalable, and ones that can cater to the current mix of legacy, on-premise and cloud systems. The IoT of the future will not just enable technologically, but will drive operational excellence and performance. The Industrial Internet of Things will be a big driver for IoT growth. Already we are seeing the rise of IIoT platforms- Predix by GE, MindSphere by Siemens and others.
It will be important that companies going the IoT way first outline where IoT can add value to their business. They can then only focus on the right use cases. Predictive maintenance i.e. forecasting equipment malfunctions and breakdowns are the first and foremost use case, having a direct positive impact on operations. Another important use case, especially in a factory set-up is Self-Optimizing Production. We shall see the rise of the “connected factory”, altering the very fundamentals of manufacturing processes. Another similar one is Automated Inventory Management, transforming supply chain capabilities. This shall use IoT networks to monitor products, conditions such as temperature and pressure, and reduce stock-out and enable a just-in-time mechanism, thereby curtailing costs. A critical application in the healthcare domain is Remote Patient Monitoring, to help track patient health remotely. Smart meters is another public utility application, such as electric meter monitoring, water and gas usage and so on, allowing real-time and dynamic pricing and therefore better value to the user. Other important use cases outlined by BCG are Track and Trace, Distributed Generation and Storage, Connected Cars, Fleet Management and Demand Response (especially for certain appliances). Companies that wish to embrace IoT and integrate it seamlessly into their business model, must have a close look at these various uses cases, and decide what suits them best.
While both established technology companies and new innovators are making their presence felt in the IoT market, the preference still stands with established giants. According to the research, 40% of today’s IoT customers still prefer to use traditional and well-established software companies for their IoT solutions. Yet, plenty of scope is there in this evolving field. Today, the field is quite fluid, with many a customer turning into an IoT provider. In fact, it is becoming an arena of major collaborations, as organization leverage partnerships to install the necessary capabilities.
The Internet of Things may be a mere technological add-on for technology companies, but for non-tech companies, it can usher in a huge transformation. Business leaders must realize, that with this IoT surge, evolves a new business model, and must be willing to adapt and embrace the new IoT norms.
Found this post useful? Kindly tap the ❤ button below! :)
About Read IT Quik
ReadITQuik offers a platform for IT professionals and decision-makers to stay connected with the latest developments in the tech world, and follow hot topics and trends. You can connect with us on Twitter, LinkedIn and Facebook