It is always refreshing when analysts downplay the potential of a hyped-up market rather than riding the wave of buzz, and this is what Strategy Analytics are doing for the Internet of Things.
The value of IoT services has been “dramatically inflated”, the analysts warned in a new report, saying the global opportunity for service providers should be measured in billions, not trillions, of dollars.
Nor has the market achieved mainstream status, as many believe, says the report – most deployments are in the trial phase and are small-scale, especially outside traditional machine-to-machine segments.
Strategy Analytics surveyed IT decision makers in nine vertical markets in the US, UK, France and Germany early this year, and found that 35% of organizations with IoT deployments have connected fewer than 100 devices so far, while in the US, two-thirds of deployers have spent less than $100,000 on IoT projects.
The research firm now projects that global IoT spend will grow from $120bn in 2015 to $300bn in 2025, including services and equipment. This looks like a drop in the ocean of total global IT spend, which is forecast to grow from $3.3 trillion to $4.8 trillion in the same period. Two-thirds of IoT revenues will come from professional services.
Harvey Cohen, president of Strategy Analytics, said estimates placing “the IoT market value at $3 trillion or more have a credibility problem”. He added: “Can IoT really be bigger than the entire IT industry? The economic value potential of IoT is indeed huge, but the opportunity for suppliers of products and services is likely to be measured in $US billions not trillions.”