Published on: November 06, 2019
The adoption of IoT is enabling enterprises to improve customer engagement and accelerate the speed at which they deliver their products and services as well as revamp existing industry processes. IoT implementations start with embedding sensor-based data capture process across various operations. The data is then analyzed at the edge or in the cloud. The valuable insights derived from such analysis helps in taking real-time and more accurate business decisions. The IoT market is categorized as a part of the information technology (IT) market. The global IT market covers vendors offering software, IT services, communications equipment, technology hardware, storage, and peripherals, electronic equipment and instruments, and semiconductor and semiconductor equipment. Our report on the IoT market provides a holistic analysis, market size and forecast, trends, growth drivers, and challenges, as well as vendor analysis of around 30 vendors.
The IoT market is expected to grow steadily as billions of devices, services and systems become connected, mainly driven by increasingly ubiquitous and cheaper sensors that convert the physical data to digital content. The key enablers in the adoption of IoT include – decrease in the sensor costs, an increase in computing power of processors, low connectivity cost, several enterprise digital transformation initiatives, and government push on developing smart cities.
The global IoT market revenue is expected to cross US$1 trillion by 2025, offering significant growth opportunities for market participants. The IoT software and services segment, which includes IoT platform, applications, cloud solutions, and systems integration services, will remain the largest segment constituting more than three-fourths of the total IoT revenues in 2019. The IoT devices segment is expected to witness the fastest growth, growing at a CAGR of 28% during the five-year forecast period. The Asia Pacific region will hold more than one-third of the total global IoT connections and also drive market growth during the forecast period.
Our analysis identifies the following factors to be driving the growth in the IoT market:
Over the last few years, the cost of IoT sensors and devices have been constantly declining, which is fueling the adoption of IoT. For instance, the cost of IoT sensors has dropped by more than 50%, and it is expected to decline further in the upcoming years. Declining cost of IoT devices and sensors is likely to encourage small and medium-sized enterprises to implement IoT technologies.
Advancement in network infrastructure enables the rapid adoption of IoT technologies. Network infrastructure is the backbone of the IoT ecosystem, which allows sensors and devices to send and receive information. The emergence of 5G will intensify the adoption of IoT technologies among the industries. 5G networks provide many benefits in terms of data speed, latency, efficiency, reliability, capacity, and security. With 5G networks, enterprises can realize the full benefits of the IoT that were previously limited, due to lower throughput and performance. The proliferation of Low Power Wide Area Network (LPWAN) will also contribute to the rapid deployment of IoT solutions.
The availability of cloud-based IoT solutions and platforms has lowered the IoT deployment cost to some extent. Cloud-based solutions provide many benefits, such as better and simpler scalability, low-cost of deployment, and better accessibility. It also reduces the upfront cost of the IoT technologies encouraging small enterprises to incorporate IoT technologies into their IT ecosystems.
At the same time, the vendors operating in the IoT market face numerous challenges in increasing their sales and improving profitability. Some of those challenges are:
Interoperability is still one of the biggest challenges in the IoT market. Interoperability issues arise due to the lack of rules or standards at the application level, limited connectivity between different transport protocols such as Ethernet, WiFi, and Zigbee, and using sensors and devices from different manufacturers.
High incidence of cyber-attacks has made companies skeptical about incorporating IoT technologies. The rapid increase in number of connected IoT devices has increased the number of devices that are susceptible to cyberattacks. IoT infrastructure has many touchpoints that can be exposed to many security threats such as a denial of service (DoS), Man-in-the-middle (MitM) attacks, Botnets, and identity thefts.
The high deployment cost of IoT solutions is one of the major challenges which is affecting the growth of global IoT market. For deploying IoT, companies have to make a huge investment in the IoT platforms, sensors, software, infrastructure and retrofitting subscription fees, and security solutions. In addition to this, the maintenance for the seamless working of an IoT solution would also require high operational investments. Small enterprises are hesitant to make investment in the IoT solutions due to high upfront cost, which in turn hinders the wide-scale deployment of IoT solutions.
The global IoT market can be segmented into the following:
We provide a detailed analysis of around 30 vendors operating in the IoT market, including some of the prominent vendors such as Cisco, General Electric (GE), IBM, Intel, Rockwell Automation, Microsoft, SAP, Huawei Technologies, and Qualcomm. Partnerships, investments, and research and development to improve products are some of the strategies adopted the vendors in the global IoT market.
Some of the key developments mentioned in our IoT market report include:
Backed with competitive intelligence and benchmarking, our IoT market research is designed to provide entry support, customer and M&A assessment, as well as go-to-market strategy support.
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