Investing in the Internet of Things (IoT) is “essential” for organisations that wish to excel in data-driven operations, IDC said as it unveiled bullish growth forecasts for the segment.
According to the analyst, global IoT spending will hike 10.6% in 2023 to $805.7bn before breaking the $1tn mark in 2026. Compound annual growth until 2027 will stand at 10.4%, IDC forecasts.
“The last few years have shown that connecting with a digital infrastructure is no longer a luxury, but a necessity,” said Carlos González, research manager for the Internet of Things at IDC. “For organisations to excel in data-driven operations, investing in IoT projects is essential. Connecting devices to data networks to gather insight, expand operations, and increase performance are the hallmarks of executing an IoT ecosystem.”
IDC’s Worldwide Internet of Things Spending Guide forecasts IoT spending for 18 technology categories and 70 named use cases (87 including sub-use cases) across 19 industries in nine regions and 53 countries.
The discrete and process manufacturing industries will see the largest investment in IoT solutions in 2023 and throughout the forecast period, accounting for more than one third of all IoT spending worldwide, IDC said.
Professional services, utilities and retail are the three next largest verticals, with roughly 25% share between them.
IoT services will account for nearly 40% of all IoT spending during the period, with hardware (mainly module-sensor purchases) and software generating the remainder.
Covid has in some cases only strengthened the case for investing in IoT, according to Marcus Torchia, research vice president with IDC’s Data & Analytics Group.
“Thematically, greater investment in goods production and supply chains resulting from the COVID-19 pandemic and global reactions that caused massive business and societal disruptions are evident in the new use cases. These production and supply chain related use cases can be seen in the discrete manufacturing, process manufacturing, retail, and transportation industries,” he said.
“Meanwhile, digital business investments are ramping up in other industries such as the resource industries. For example, IoT is helping to improve upstream supply chain processes in agriculture, such as growing, harvesting, and delivering higher quality produce to market.”