More and more businesses keen on IoT. Source: Shutterstock

More and more businesses keen on IoT. Source: Shutterstock

IoT continues to see double digit growth in spending says IDC

OVER THE past 12 to 18 months, organizations have piloted several internet of things (IoT) solutions in various areas of their business.

Experts believe that some of the most successful use cases deploy IoT in factories and along the supply chains — although other implementations are gaining popularity too.

As a result of the success with IoT, spending on the technology has naturally soared. According to IDC, spending on IoT in the APAC alone will reach US$398.6 trillion by 2023.

To put things in perspective — a recent IDC study forecasted that global spending on cybersecurity solutions will reach US$$103.1 billion this year and grow 9.2 percent in the five year period starting 2018 and reach US$133.8 billion in 2022.

IDC’s IoT forecast, which places the APAC ahead of the US and Western Europe in terms of global spending — with 35.7 percent, 27.3 percent, and 21.2 percent of the worldwide budget respectively, points out that China is the top spender in the (APAC) region with US$168.6 billion accounting for the year 2019.

IoT services is expected to be the largest technology group this year with US$94.6 billion going toward traditional IT and installation services as well as non-traditional device and operational services.

Hardware spending is close behind at US$91.6 billion led by more than US$74.8 billion in module/sensor purchases.

IoT software spending, however, is expected to total US$39.3 billion this year and will see the fastest growth over the five-year forecast period (2018-23) with a CAGR of 14.4 percent.

Finally, IoT services spending is forecasted to grow faster than overall IoT spending with a CAGR of 12.6 percent.

In line with previous forecasts, the three commercial industries that will spend the most on IoT solutions throughout the forecast are discrete manufacturing, process manufacturing, and utilities.

Together, these three industries are expected to account for nearly 40 percent of the worldwide spend total this year.

The primary IoT use case for the two manufacturing industries will be manufacturing operations and production asset management while utilities industry spending will largely go toward smart grid (electricity).

In Utilities, IDC believes that more than half of IoT spending will go toward smart grid (electricity), followed by smart grid (gas).

The industries that will see the fastest compound annual growth rates (CAGR) over the five-year forecast period are construction (15 percent), telecommunication (14.2 percent), and healthcare (13.6 percent).

“Spending on IoT deployments continues its good momentum across Asia Pacific (excluding Japan) region this year,” IDC IoT and Telecoms APAC VP Hugh Ujhazy commented.

“While organizations are investing in hardware, software, and services to support their IoT initiatives, their next challenge is finding solutions that help them to manage, process, and analyze the data being generated from all these connected things.”

While the forecast doesn’t comment on IoT-related cybersecurity spending, this particular category is expected to get a lot of attention in the coming months.

IoT, despite its several benefits, increases the surface area and hence vulnerability of corporate networks — and is something that must be addressed soon.

“Across the IoT ecosystem industry, it is becoming plain that security is a complex topic with many layers across applications, network, data, and devices.

“Interestingly, while companies said they are concerned about security at the application and data level, there is little or no concern about device security.

“Endpoints can be quite vulnerable and organisations should not overlook this potential weakness. We need more IoT platforms that do a good job of IoT endpoint device management,” said IDC’s ANZ Practice Research Manager Monica Collier, addressing the issue based on observations in Australia and New Zealand.