Want more proof that the Internet of Things has moved from hype to reality?

A new report from Technology Business Research says that IoT commercial ecosystem revenues soared 18 percent year-over-year to $6 billion in the second quarter.

The data reflects findings of another recent IoT study from Juniper Research which says many companies are moving to deployment from proof-of-concept development.

IBM led in IoT revenue at $783.2 million followed by Hewlett Packard Enterprise ($593.5 million), Cisco ($576.2 million) and Microsoft ($505.7 million.)

However, the news is not all rosy for hardware providers as IaaS limited growth in infrastructure spend.

The report is based on TBR’s analysis of information from 21 leading players in the sector.

Leading the way in revenues was Cloud services, which jumped more than 67 percent. TBR says the growth reflects “vendors’ evolving need for platforms, processing and storage.”

IoT infrastructure spending grew at just over 5 percent – the only category tracked by TBR that didn’t show double-digit growth.Why?

IaaS – or infrastructure as a service.

The hottest category was in IoT-related software investment at $1.9 billion, up 32.5 percent.

“TBR believes this is due to the broad existence of legacy database and application software that has not been moved to the cloud,” TBR reports.

“Incumbency in IT and/or in industry verticals is becoming a primary factor to success in commercial IoT. Microsoft’s base in software, for example, has made it an incumbent in IoT due to its ability to cross-sell software customers onto its Azure IoT platform.”

Power players

“Incumbency proves a foundation for gaining leadership in IoT due to cross-selling, deep relationships and established knowledge,” explains TBR Analyst Dan Callahan. “Companies with incumbencies in IT and consulting are the leaders in TBR’s benchmark.”

And look for more strength in the IoT sector from GE, TBR predicts.

“Outside its traditional markets, the company struggles to gain traction. This struggle leads GE, as well as other companies, to seek partnerships with other incumbents to expand their respective customer pools,” TBR says.

“TBR believes GE’s new partnerships with Microsoft and Oracle will help improve GE’s position in the 4Q16 Commercial IoT Benchmark due to access GE will gain to these companies’ vast enterprise relationships.”

New power players?

Today’s IoT leaders won’t necessarily be tomorrow’s pace-setters, TBR warns.

“Despite market consolidating around IT incumbents, the opportunity for a dark horse disruption remains possible,” TBR says. “TBR believes vertically oriented companies with strong IoT go-to-market strategies, such as PTC, are ripe for acquisition, and an unexpected purchase, such as by SAP, Bosch, Siemens, Hewlett Packard Enterprise, Oracle or Verizon, could shake up the status quo significantly.”

Learn more about TBR at: http://www.tbri.com