IoT industry will explode in 2016, Gartner says

Millions of new devices will get connected daily next year. IoT services will be a major beneficiary of this growth.

Internet of Things IoT Gartner report
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Next year will see 5.5 million new devices connect to the Internet of Things (IoT) every day, according to Gartner.

The research firm predicts that 6.4 billion IoT devices will be used globally in 2016. That's a 30% increase from this year.

By 2020, that number will reach 20.8 billion, the company says in its recent IoT forecast.

Design and operation services

IoT services spending will be a major beneficiary of this IoT growth, Gartner thinks.

The report says that IoT will "support total services spending of $235 billion" in 2016, a 22% increase from this year.

Most IoT services are professional and include design, installation, and operating contracts.

Connecting the Things

Connectivity services via communications companies will "grow at a faster pace," Gartner says, although the release announcing the forecast didn't say by how much.

"IoT services are the real driver of value in IoT, and increasing attention is being focused on new services by end-user organizations and vendors," Gartner analyst Jim Tully said in the press release.

I wrote about some new communications networks aimed at IoT this week, in "IoT-dedicated networks beginning to roll out."

Enterprise

While consumers will see the most IoT devices, businesses will "account for the largest spending," Tully said.

The consumer sector will see about 4 billion things in 2016, whereas cross-industry things in business will have a little over 1 billion.

Cross-industry devices are things that are used in "multiple industries," such as light bulbs, Gartner explains.

Vertical-specific smart devices in business will see around 1.25 billion devices. Those devices are geared towards a specific vertical, like a tracking device in a container on a ship.

"Connected things for specialized use are currently the largest category, however, this is quickly changing with the increased use of generic devices," Tully said.

"By 2020, cross-industry devices will dominate the number of connected things used in the enterprise," he added.

Impact

Overall, the economic impact of IoT could be massive. McKinsey Global Institute published a report earlier this year in which it said the "potential economic impact" of the IoT will be $4 trillion to $11 trillion a year by 2025.

However, McKinsey raised some questions about interoperability between systems and the industry's inability to make use of all the data generated by sensors.

Another trouble spot could be security, the firm predicted.

Predictions

Gartner has made bold projections about enterprise IoT before. Earlier this year, Gartner analyst Daryl Plummer presented a webinar on digital innovation, where he predicted that business and IoT will join to make the next innovation in digital business.

He thinks that the "blurring" of physical and virtual allows new processes and business models.

In other words, adding sensors in the enterprise, along with virtual electronic ventures, will be a huge area. Uber is the example Plummer used.

"IoT will bring turmoil to your industry, any industry," Gartner's Plummer said.

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