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Billions of IoT ‘things’ will be connected next year

Gartner report indicates up 30% from 2015


Information technology research and advisory firm Gartner Inc. forecasts that 6.4-billion connected things will be in use worldwide in 2016, up 30% from 2015, and will reach 20.8-billion by 2020. In 2016, 5.5-million new things will get connected every day.

Gartner estimates that the Internet of Things (IoT) will support total services spending of $235-billion in 2016, up 22% from 2015. Services are dominated by the professional category (in which businesses contract with external providers in order to design, install and operate IoT systems), however connectivity services (through communications service providers) and consumer services will grow at a faster pace.

“IoT services are the real driver of value in IoT, and increasing attention is being focused on new services by end-user organizations and vendors,” says Jim Tully, vice-president, Gartner.

Enterprises to Bolster IoT Revenue

“Aside from connected cars, consumer uses will continue to account for the greatest number of connected things, while enterprise will account for the largest spending,” Tully adds. Gartner estimates that 4-billion connected things will be in use in the consumer sector in 2016, and will reach 13.5-billion in 2020 (see Table 1).

Table 1: Internet of Things Units Installed Base by Category (Millions of Units)

Category 2014 2015 2016 2020
Consumer 2,277 3,023 4,024 13,509
Business: Cross-Industry 632 815 1,092 4,408
Business: Vertical-Specific 898 1,065 1,276 2,880
Grand Total 3,807 4,902 6,392 20,797

Source: Gartner (November 2015)

In terms of hardware spending, consumer applications will amount to $546-billion in 2016, while the use of connected things in the enterprise will drive $868-billion in 2016 (see Table 2).

Table 2: Internet of Things Endpoint Spending by Category (Billions of Dollars)

Category 2014 2015 2016 2020
Consumer 257 416 546 1,534
Business: Cross-Industry 115 155 201 566
Business: Vertical-Specific 567 612 667 911
Grand Total 939 1,183 1,414 3,010

Source: Gartner (November 2015)

In the enterprise, Gartner considers two classes of connected things. The first class consists of generic or cross-industry devices that are used in multiple industries, and vertical-specific devices that are found in particular industries.

Cross-industry devices include connected light bulbs, HVAC and building management systems that are mainly deployed for purposes of cost saving. The second class includes vertical-specific devices, such as specialized equipment used in hospital operating theatres, tracking devices in container ships, and many others.

“Connected things for specialized use are currently the largest category, however, this is quickly changing with the increased use of generic devices. By 2020, cross-industry devices will dominate the number of connected things used in the enterprise,” concludes Tully.