RESEARCH TRIANGLE PARK – The march toward an Internet of Things world in which all manner of devices are linked across the net will continue to gain speed in 2018, says research firm International Data Corporation.

Leading the way in growth will be consumer-focused IoT, such as smart homes and smart devices.

“Consumer IoT spending will reach $62 billion in 2018, making it the fourth largest industry segment. The leading consumer use cases will be related to the smart home, including home automation, security, and smart appliances,” says IDC’s Marcus Torchia, research director, Customer Insights & Analysis. “Smart appliances will experience strong spending growth over the five-year forecast period and will help to make consumer the fastest growing industry segment with an overall CAGR[compouned annual growth rate] of 21.0%.”

IoT spending will surge some 15 percent to nearly $773 million next year, up from $674 million in 2016, IDC says in its (IDCWorldwide Semiannual Internet of Things Spending Guide.

And the growth is forecast to continue at more than 14 percent through 2021, topping $1 trillion in 2020.

IoT hardware spending for sensors, modules and security, as well as infrastructure, is forecast to reach $239 billion next year.

However, the fastest growth is taking place in application and analytics software to make IoT smarter and faster.

Internet of Things spending

Services are also expected to gain momentum, IDC says.

“By 2021, more than 55% of spending on IoT projects will be for software and services. This is directly in line with results from IDC’s 2017 Global IoT Decision Maker Survey where organizations indicate that software and services are the key areas of focused investment for their IoT projects,” said Carrie MacGillivray, vice president, Internet of Things and Mobility at IDC.

“Software creates the foundation upon which IoT applications and use cases can be realized. However, it is the services that help bring all the technology elements together to create a comprehensive solution that will benefit organizations and help them achieve a quicker time to value.”

Broad spectrum of industries

IoT spending will spread across multiple industries, the report says:

  • Manufacturing, $189 billion
  • Transportation, $85 billion
  • Utilities, $73 billion
  • Cross-industry (such as smart buildings and connected vehicles), $92 billion