Global Internet of Things (IoT) investments are expected to hit just over $800 billion this year, and will continue growing to surge past $1 trillion by 2021, an updated forecast from International Data Corporation predicts.
According to the report, worldwide spending on IoT will grow 16.7 percent year over year in 2017, with investment in hardware, software, services, and connectivity rising to $1.4 trillion by 2021.
The forecast indicates manufacturing, freight monitoring, and production asset management are the use cases expected to snag the largest pieces of the investment pie, both this year and down the line. Spending on those applications is expected to reach $105 billion, $50 billion, and $45 billion in 2017, respectively. Smart grid and smart building technologies will also garner some attention, with forecasted investments of $56 billion and $40 billion this year, respectively.
The fastest growing application over the forecast period, though, will be airport facilities automation with a compound annual growth rate of 33.4 percent. That will be followed by electric vehicle charging with a 21.1 percent CAGR and in-store contextual marketing at 20.2 percent CAGR. Smart home technologies will also put in a strong showing with forecast growth of 19.8 percent over the five-year period.
So where will all the dollars go?
IDC said funds will mainly be spent on hardware through 2021, when services will become the top area for investment. The firm noted hardware spending will be dominated by modules and sensors that connect end points to networks, while software spending will be similarly dominated by applications software. Services spending will be about evenly split between ongoing and content services and IT and installation services, IDC predicted.
IDC’s full “Worldwide Semiannual Internet of Things Spending Guide” can be found here.