IDG\nIt happens every year around this time \u2013 every IoT company on the planet, whether it\u2019s a giant platform company, an old-school manufacturing player, or a teeny startup making Internet-enabled baby monitors issues its predictions about the market in the years to come, in the hope that IoT reporters looking for a quick story will write something with a headline like \u201cInternet-enabled baby monitor market to reach $250 billion by 2040, according to cool company.\u201d\n\nYet those predictions are, to put it kindly, all over the map. A McKinsey & Company estimate suggests that the economic impact of the IoT will reach $11 trillion by 2025. IDC estimates that total spending on IoT will reach $1.2 trillion by 2022. Gartner forecasts 20.4 billion connected devices globally by 2020, and DigiCert says that 92% of companies they surveyed said IoT will be \u201cimportant to their business\u201d in 2012.\nThere\u2019s a lot of signal and also a lot of noise.\nProbably the main reason for the difficulty in predicting where the IoT market at large is going to go is that there's no general agreement on a precise definition of the boundaries of that market. Hence, the large number of large numbers purporting to describe the "size of the IoT market," which are frequently measuring very different aspects of it.\n\u201cEveryone knows it\u2019s going to be big,\u201d said Alan Griffiths, principal consultant with market researcher Cambashi. \u201cAnd no one\u2019s got the faintest idea, in my opinion, of how big it\u2019s going to be.\u201d He talks to top technical people \u2013 CIOs and CTOs \u2013 for his estimates of the IIoT market, which gives him a better read on who\u2019s buying what.\nGriffiths\u2019 research on the IIoT market highlights another important point: IoT trend predictions focused on more specific market segments, or on particular technologies, tend to be a lot more digestible. The relevant details needed to create such an analysis are easier to get, and it\u2019s more difficult to make guesswork look presentable.\nBut different analysts still have different methodologies, according to 451 Research vice president Christian Renaud. Many analysts base their estimates on their intimate knowledge of the vendor community \u2013 simply knowing that, hypothetically, a large proportion of the companies in a given segment aren\u2019t interested in buying product X can be a powerful predictive tool.\n\u201cIn our case, we do a lot of consulting projects for various clients throughout the course of the year, and we have our own syndicated data, doing surveys of customers about adoption plans and things like that, and that will, in the aggregate, form a composite opinion,\u201d said Renaud.\nWhile vendor predictions are occasionally just high-flown guesstimates about market size, vendors usually tilt research to make themselves look good in more subtle ways. Phrasing survey questions so that respondents are likely to answer them in a particular way, carefully selecting the parameters of a given prediction \u2013 \u201cthe market for IIoT gateways that feature this particular combination of connectivity options is set to rise by 300% year-over-year!\u201d \u2013 you get the idea.\nThe accuracy of longer-term predictions tends to vary heavily by methodology. Simply measuring the CAGR of a given technology can give a quick-and-dirty estimate, based on current trends, but that frequently doesn\u2019t tell the whole story. Market trends change frequently, and deeper knowledge of the directions in which that change is likely to happen \u2013 based on a stronger understanding of a given market \u2013 typically leads to a better estimate of future figures.\nSome of this, of course, is simple common sense \u2013 studies that include fully described and rigorous methodologies, those that use authoritative data (whether it\u2019s unbiased surveys, data from widely accepted sources of demographic data like the World Bank or United Nations, and so on) and those that aren\u2019t undertaken at the behest of a vendor are more likely to be accurate than others.\nDefining the terms of a given estimate is a critical step to getting people to take it seriously, which is why estimates of the IoT market as a whole \u2013 whose boundaries are nebulous at best \u2013 should generally be taken with a large grain of salt.\n\u201cIf you ever see a \u2018there\u2019s 175 billion IoT devices\u2019 number from me, it means I\u2019ve been kidnapped and that\u2019s my call for help,\u201d said Renaud.