IoT Market to Grow More Than Double to $520 billion by 2021, says Bain & Co

10 months ago
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IoT Market to Grow More Than Double to $520 billion by 2021, says Bain & Co Image Credit: Pugun and Photo/Bigstockphoto.com

Bain & Company expects the combined markets for the Internet of Things (IoT), including hardware, software, systems integration, and data and telecom services, to grow to $520 billion by 2021 – more than double the $235 billion spent in 2017 – the majority of which will be captured by enterprise and industrial segments. 

Yet many enterprise customers say they are tempering their expectations about pace of IoT adoption, realizing that complete solutions may take longer to implement and yield the expected return.  In response, while they would like to go faster, they are planning less extensive IoT implementations by 2020 than they had planned just two years ago.  IoT vendors seeking to tap into this pent-up demand must better address barriers to adoption, provide more consumable solutions, and ease concerns about integration with existing information technology and operational systems.

Bain & Company’s latest report, Unlocking Opportunities in the Internet of Things, includes results from a 2018 survey of more than 600 executives, which found that enterprise customers remain bullish on IoT.  They are still running more proofs of concept than they were two years ago.  Additionally, more customers are considering exploring new use cases: 60 percent in 2018 compared with fewer than 40 percent in 2016. 

Along with analytics and infrastructure software vendors, cloud service providers (CSPs), particularly Amazon Web Services (AWS) and Microsoft Azure, have emerged as more prominent and influential vendors in the space. CSPs are lowering barriers to IoT adoption, allowing for simpler implementations and making it easier to adopt selected use cases and scale up quickly.  They also leverage their deep expertise in analytics to expand across IoT battlegrounds, as well as to fortify their position in the analytics and cloud battleground for enterprise and industrial customers.

However, their broad horizontal services provide little optimization for industry-specific applications, leaving a significant opportunity for industry solutions from systems integrators, application developers, industry IoT platform specialists, device makers and telcos.  This pent-up demand represents a huge opportunity for technology providers that can meet customer needs.

“Our survey found that vendors are aligned with customers’ concerns about some barriers, such as security, returns on investment, but less so on others – notably integration, interoperability and data portability,” Ann Bosche, a partner in Bain & Company’s global Technology Practice and an IoT expert.  “Based on our experience with previous technology cycles, the key to addressing these concerns lies in focusing on fewer industries in order to learn what customers really want and need to ease adoption.”

Ray is a news editor at The Fast Mode, bringing with him more than 10 years of experience in the wireless industry.

For tips and feedback, email Ray at ray.sharma(at)thefastmode.com, or reach him on LinkedIn @raysharma10, Facebook @1RaySharma

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