Intelligent systems market to be worth $2.2 trillion in 2020

Newly connected IoT products and devices expected to drive huge numbers, according to IDC report

Intelligent systems market to be worth $2.2 trillion in 2020

There’s an old canard that if you ask market researchers about the future of a specific new technology, they’ll pretty much always tell you that it will be a $10 billion market in 10 years. 

Given that anything from tinker toys to tater tots seems en route to being a $10 billion market, it makes sense to take optimistic market predictions with a hefty pile of salt. But when you hear numbers at the scale of the latest report from IDC concerning intelligent connected systems—sometimes known as the Internet of Things—you have to pay attention.

Trillions, with a T

That’s because we’re not talking billions, tens of billions, or even hundreds of billions of dollars. We’re talking trillions, with a “t.” More than $2.2 trillion in just four years, according to IDC's Worldwide Embedded and Intelligent Systems 2015-2020 Market Forecast. Now, that is real money!

So, what are we really talking about here? Turns out this is some pretty esoteric, back-end stuff to be driving a multi-trillion-dollar market. Think processors and connectivity, or "edge intelligence," embedded in things like smart appliances, industrial machines, vehicles, drones, wearable technology and 3D printers. 

Backends and infrastructure

Perhaps surprisingly much of the profit from this new trend will go old-line tech and manufacturing companies working to embed and extract value from microprocessors, microcontrollers, sensors and connectivity opportunities.

A statement from Mario Morales, program vice president, Enabling Technologies and Semiconductors at IDC, puts it this way:

The IT (Information Technology) and OT (Operational Technology) industries are moving beyond the Internet of Things (IoT) buzz and are now deploying intelligent systems in specific markets like retail, industrial automation, automotive systems, and directly in our homes. Despite IT vendors and technology suppliers maintaining the initial mind share as the key builders of the IoT world, the vision, implementation, and ecosystem is centered on OT companies like GE, Siemens, ABB, GM, Bosch, Ford, Volvo, Toyota, Samsung, Honeywell, Hitachi, and others that hold decades of system knowledge and an entrenched position in each of the major industries investing in the next wave of embedded and intelligent systems.

 That’s a big deal. Just as the markets for smartphones and computers gradually mature, “edge and cloud infrastructure needs to continue to scale and support trillions of sensors and billions of systems,” said Les Santiago, research director, Wireless and IoT Semiconductors at IDC, in a statement.

That explains where the $2.2 trillion gets generated, and it also suggests the possibility of a fundamental shift in the winners and losers of this vast, interconnected world we’re busy building.

New apps and services to leverage intelligent systems

During this phase (however long it lasts), instead of the big money flowing to the sexy, consumer-facing companies making apps and services, more and more will go to the companies making the parts and infrastructure that supports it. Eventually, though, once that infrastructure is in place, the front-end stuff will likely be able to leverage the new platform and once again take center stage.

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Copyright © 2016 IDG Communications, Inc.

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