In the latest update to its Worldwide Semiannual Internet of Things Spending Guide, research company IDC has forecast that worldwide spending on IoT will grow 16.7 percent year over year in 2017, to reach just over $800 billion.
The company suggests that this increase in spending is set to continue over the four years to 2021, when it predicts that investments in the hardware, software, services and connectivity that enable IoT will total as much as $1.4 trillion.
“The discussion about IoT has shifted away from the number of devices connected,” said Carrie MacGillivray, vice president of IoT and mobility at IDC. “The true value of IoT is being realized when the software and services come together to enable the capture, interpretation, and action on data produced by IoT endpoints.”
IDC says that the industries that will attract the largest investment in 2017 include: manufacturing ($183 billion), with manufacturing operations attracting $105 billion in investment; utilities ($66 billion), with smart grid technologies making up $56 billion of that spend; and transportation ($85 billion), with spend on freight monitoring totaling $50 billion.
By 2021, the use cases investment picture looks much the same; however, spending on airport facilities automation and electric vehicle charging are set to experience the fastest growth rates at 33.4 percent and 21.1 percent, respectively. Spending on smart home technologies is forecast to grow by 19.8 percent to 2021.
Technologies and regions
From a technology perspective, IDC claims that hardware, notably modules and sensors, will be the largest spending category until the last year of the forecast, when it will be overtaken by the faster growing services category.
By region, the Asia-Pacific region, excluding Japan, is set to be the biggest spender throughout the forecast period, with spending expected to reach $455 billion in 2021. The US will come a close second, with $421 billion spent on IoT in 2021, and Western Europe will be third, spending $274 billion in 2021.
IDC’s Worldwide Semiannual Internet of Things Spending Guide forecasts IoT spending for 12 technologies and 54 use cases across 20 vertical industries in eight regions and 52 countries.