IoT Forecasts Are Scary… And They’re Getting Scarier, Faster

ScaryFor most of 2013 the forecasts for the Internet of Things, a.k.a. Machine-to-Machine, or M2M (not to be confused with the Internet of Everything, or IoE), was stuck at the “20-billion-things-by-2020”-plateau. Based on conversations with the IT community, 20 billion things — i.e. 800 million smart meters, and sensors in vehicles, equipment and furniture — has been considered conservative, but nobody wanted to go out on a limb as to where this market is headed. However, recently, that number has increased 50% — to 30 billion — and with more than 5 years to go for the forecast period, I wouldn’t be surprised to see that number increase substantially between now and 2020.

At January’s Consumer Electronics Show, Cisco CEO John Chambers predicted that the IoE would hit 50 billion devices by 2020, generating $19 trillion between 2013-2022. Back in October, IDC offered an even more aggressive forecast, with an IoT installed base in excess of 210 billion things by 2020, including 30.1 billion connected (autonomous) things, and accounting for just $8.9 trillion, up from $4.8 trillion in 2012.

A month later, IoT topped the Twitter trend list at Mobile World Congress 2014. According to MCW organizer GSMA, M2M connections are expected to grow from 195 million last year to 250 million in 2014.

Also in February, Infonetics Research shed a little light on why this market is exploding: competitive advantage. “As technologies continue to evolve and prices come down, enterprises will increasingly turn to M2M to lower operating costs, differentiate their brands, and create new revenue opportunities,” said Infonetics’ Godfrey Chua, directing analyst for M2M.

A newer Infonetics study, released at the end of February, reports that M2M is one of the major drivers to the carrier market in North America and Western Europe. “Service providers in North America and Western Europe are leveraging network APIs to target opportunities such as M2M (machine-to-machine),” said Infonetics’ Shira Levine, directing analyst for service enablement and subscriber intelligence. The global service delivery platform (SDP) market, including software and services, grew 15% in 2013, and is expected to grow at a 9% CAGR from 2013 to 2018, in sharp contrast to an IT market expected to grow 3.1% this year, and which turned in an anemic 0.4% increase in 2013.

Another recent study, conducted by Forrester Consulting on behalf of SSH Communications Security, provided insight into where M2M is gaining traction. The study’s insights include the fact that M2M processes are used by virtually all organizations, and 62% expect to increase their use of M2M processes over the next 12 months;  more than half of the financial institutions use M2M connections for billing; and, 52% use M2M for logistics management and customer service.

The bottom line is that when it comes to M2M and IoT, the networking industry should be prepared to dot and cross a lot of Is and Ts.

Image credit: Casey Fleser (flickr) / CC-BY