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IoT set to subsume IT markets - will be worth $4.3 trillion by 2024

internet of things chart

via Flickr © dmje (CC BY 2.0)

Machina Research, the London-based M2M and IoT specialist, has produced a new report on the area positing a "Global IoT market opportunity" of US$4.3 trillion by 2024. This is the first time, to my knowledge, that the ‘T’ word has been produced to quantify IoT/M2M.

Yes, it's the ‘total opportunity' and yes, it's a 10 year projection, but my word it's still a big number.

According to the report’s author, Machina Research's Emil Berthelsen, as M2M evolves and transforms into IoT, it will essentially gobble substantial shares of traditional IT markets, “ultimately subsuming them”, says Emil.

“IoT is actually focusing on a lot of markets with data and applications -  it’s becoming IT-like and it’s transforming IT itself in the process,” he tells me. In other words IT will simply become IoT and, as the saying goes, everything that can be connected, will be connected, turning both the corporate world and the built environment into one huge interconnected machine, and operating in what Emil and I decided could be called ‘human real time’ - collecting data, sifting it and controlling all the elements at their end-points, such as cars, automatic transport systems, meters, home security systems, industrial processes…  everything will have an IoT tinge to it.

So what’s changed to produce that huge number? Machina Research says it’s counting in a significantly greater number of connections to devices and sensors but also to corporate IT systems, other IoT applications, social media, published data feeds, and so on, There is also a pronounced shift from vertically structured, ‘stovepipe’ solutions to open systems nurturing application and data sharing. And there will be a  focus on application development and the reuse of data to create new and innovative services or efficiencies with tangible benefits for enterprises, it says.

The report summary says: “In order to value the IoT we have taken account of these wider elements in the ecosystem, over and above the simple M2M opportunity. That M2M element is a crucial part of the revenue associated with IoT: the four major building blocks of M2M revenue (devices, installation, connectivity and M2M services) will be worth approximately USD2.5 trillion by the end of 2024. Even in the exciting new world of IoT, the single biggest revenue opportunity is associated with the one-off revenue from connected device hardware.”

It’s a compelling view and it surely means that connectivity is going to be a key enabler here. If IoT subsumes the IT market then presumably the connectivity providers are going to be subsumed by them both. Just how much of the $4.3 trillion is going to trickle down to the network operators?

“Well that’s the bad news,” says Emil. “The value provided by connectivity in this whole piece is quite low. It’s still counted in billions and clearly connectivity is key to the whole effort as there must be a network, but the real value in this market will be in providing strategy , integration and hardware

For further report information click Machina Research

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