The global Internet of Things (IoT) technology spend stands at $140 billion in 2017, and is expected to grow at 18 per cent to $322 billion in 2022, according to a recent study released by management consulting firm Zinnov.
The study points out that industrial, automotive, and energy & utilities verticals are the biggest spenders, currently contributing to over 45 per cent of the overall IoT Technology spend.
Out of the total IoT Technology spend of $140 billion, $78 billion is spent on IoT Technology services alone. This spend is expected to grow at 19 per cent, year-on-year, to reach $190 billion in 2022.
The report also highlighted that the addressable IoT Technology market for Service Providers stands at $46 billion. An analysis of 200 Service Providers reveals an addressed market of $3.3 - 3.8 billion in a consolidated structure, with the top 20 Service Providers addressing 76 per cent of the market.
Sidhant Rastogi, Partner & Practice Head, Zinnov, said, "North America continues to lead the IoT Technology spend, accounting for 40 per cent of the current global spend, while India is addressing 44 per cent of the total outsourced market. With the increasing focus on IoT, Service Providers are making IoT a dedicated P&L, exploring newer engagement models, and strengthening end-to-end expertise across the IoT value chain through internal investments, or through acquisitions and partnerships."
Sidhant further added, "The core of IoT Technology Services will move towards buying and selling outcomes and not just technology. The focus on data sciences will thus increase multifold. Strong managed services competency will additionally help Service Providers win large end-to-end IoT projects."
The Zinnov report highlighted some of the key trends from the study. Some of them are:
1. IoT is blurring the industry lines and is helping enterprises explore newer business models and additional revenue streams
2. The power of connectivity and data is providing unprecedented visibility, control, autonomy and intelligence across verticals and use cases
3. Security, privacy, and interoperability remain the top challenges for IoT adoption
4. Technology enablers at each layer of IoT are investing to provide solutions that cater to the challenges
5. Enterprises and Service Providers are pushing for standardization in IoT through consortiums to allow interoperability of billions of connected devices
6. Innovations across the technology stack to cater to the potential IoT threats are expected to continue driving IoT investments and penetration