Internet Of Things will give rise to a new economy

by CXOtoday News Desk    Nov 13, 2013

IOT

While the traditional IT market will continue to witness sluggish growth in the coming years, it is newer and emerging markets such as Internet of Things (IoT) that is expected to generate revenues and create new and exciting opportunities for businesses, according to research firm Gartner. This, according to the research firm will result in the creation of a new economy.

Peter Sondergaard, Senior VP at Gartner and global head of Research predicts that while in 2015 the combined IT and telecom market will hit nearly $4 trillion globally, the incremental revenue generated by the Internet of Things’ suppliers is estimated to reach $309 billion per year by 2020.

Researchers have stated earlier that in 2009, there were 2.5 billion connected devices, most of these were mobile phones, PCs and tablets. In 2020, there will be over 30 billion devices connected, and connectivity will be present everywhere.

A new economy

Sondergaard believes the Internet of Things (things, people, places and systems) will create new markets and a new economy and that half of this activity will be new start-ups and 80% will be in services rather than in products.

“The Internet of Things is a strategically important market that will accelerate fast and will drive both revenue and cost efficiencies. It will create greater economic value for all organizations, and for the global economy.

Gartner predicts that the total economic value add for the IOT will be $1.9 trillion in 2020, seen across a number of industries. The verticals that are leading its adoption are manufacturing (15%), healthcare (15%) and insurance (11%).

Another recent report released by iDate in September also predicts that 2020 will be a revolutionary year for IOT.  The high growth will be driven by factors such as proliferation of smartphones, tablets, wearable techs and other connected devices as well as greater availability of bandwidth and elements that are being embedded in modern devices such as sensors, image recognition and NFC technologies, says the report.

(Read: For Internet of Things, 2020 will be a revolutionary year!)

According to the iDate report, the new promising IOT market will be driven by multiple industries including automotive, aeronautics, energy, food and retail, connected home and healthcare, to name a few.

Next level of growth

Researchers however highlight that IOT will also increase security challenges in the enterprise as an Andrew Rose, Principal Analyst at Forrester Research mentions that there is an increased risk of data to be stolen or compromised with the emergence of IOT. “Companies should have a security policy in place to identify targets, evolve key security control, add newer delivery mechanisms and review their security scenario frequently,” he mentions in a blog.

Read: ‘Internet of Things’ increases security concerns among Indians

Security and other challenges however will not deter the growth of IOT which is inevitable says Gartner. in fact, the research firm believes IOT will re-invent industries at three levels: business process, business model, and business moment.

At the first level, digital technology will improve products, services and processes, our customer and constituent experiences, and the way we work in our organizations and within our partnerships,” says the report. However, as companies digitalize products and process, completely new ways of doing business in industries emerge. Gartner analysts expect more transformational changes as digitalization re-invents industries at the business model level. The third level of digital re-invention is created by the need to compete with unprecedented business velocity and agility. 

Also read:

Companies step up effort on ‘Internet of Things’