From fantasy to fad to reality … From connected vehicles to remote health management, manufacturing operations, smart buildings and more.

Internet of Things spending is surging, according to new research from International Data Corporation.

Considered a fantasy not that long ago, the IoT business is certainly real as spending this year will hit $232 billion, IDC says.

And much more is coming with an annual growth rate of 16 percent taking IoT investments in hardware, software, services and connectivity to $357 billion by 2019.

So what are the factors driving Iot and what companies can benefit most?

“A use case represents a detailed composition of a technology investment that is made to produce a set of end user benefits,” said Marcus Torchia, research manager, IoT for IDC’s Customer Insights and Analysis team.

“The long term opportunity for IoT vendors is helping to identify and create immediate and residual benefits for end users through their technologies. We see strong opportunities across many industries. For example, in highly instrumented verticals like manufacturing and transportation, large data sets are used to optimize operational processes and extend the life of high capital cost assets. In other sectors like healthcare and consumer, IoT technology is being used to produce benefits that improve quality of life.”

Inside the IoT crystal ball:

The big spenders:

  • Manufacturing, $35.5 billion
  • Transportation: $24.9 billion
  • Cross-Industry investment: Nearly $31 billion

And where are companies spending the most on IoT?

Says IDC:

  • “Manufacturing Operations, which supports digitally-executed manufacturing, or how manufacturers use intelligent and interconnected I/O (input output) tools – e.g. sensors, actuators, drives, vision/video equipment etc. – to enable the different components in the manufacturing field – e.g. machine tools, robots, conveyor belts etc.– to autonomously exchange information, trigger actions and control each other independently.
  • “Freight Monitoring, which uses radio frequency identification (RFID), global positioning system (GPS), GPRS, and GIS technologies to create an intelligent, Internet-connected transportation system. This system carries out the intelligent recognition, location, tracking and monitoring of freight and cargo through exchanging information and real-time communications via wireless, satellite or other channels.
  • “Smart Buildings, which utilize advanced automation and integration to measure, monitor, control, and optimize building operations and maintenance. The key concept is optimization – meaning the deployment of a set of integrated control systems capable of adapting in real time to both internal policies and external signals. These systems manage how building equipment operates to use energy in the most efficient and cost-effective way.”

Areas in spending also will surge include:

  • Remote Health Management
  • Smart Grid (Electricity)
  • Smart Home

The hottest areas for investment, however, through 2019 will be:

  • In-Store Contextualized Marketing
  • Connected Vehicles
  • Insurance Telematics

“While Manufacturing and Transportation will lead the U.S. in terms of overall IoT investments, the Insurance, Retail, and Healthcare industries will see IoT spending levels increasing by 135%, 101%, and 96%, respectively, over the forecast period,” IDC predicts. “In addition to driving some of the largest IoT investments, the Cross Industry segment will also see revenue growth of more than 100% through 2019.”