Go to Market IoT Research

Market Size and Market Impact of IIoT

The market opportunity of the IIoT is huge. According to IndustryARC research (June 2016), the industrial IoT market is estimated to reach $123.89 Billion by 2021 at a high CAGR, as we cover in our Industrial Internet of Things market state and outlook 2016-2017.

In the graphic below you can also see some forecasts by Morgan Stanley, data on the impact of IIoT on the global economy by Accenture and another forecast from Research and Markets. Leaders in the IIoT space, such as GE, also have impressive forecasts but, again, it all depends on what you exactly measure and how you define IIoT.

Market-Size-and-Market Impact-of-IIoT

Source: MorganStanley

Benefits of IIoT – Industrial Internet of Things Drivers

Industrial IoT in the earlier mentioned sense was mainly used to make a distinction between the use cases, actual usage and specific technologies as leveraged for initially mainly manufacturing and, later, other industries on one hand and enterprise IoT and consumer IoT applications on the other.

The fastest growing categories of IoT use cases, for instance, are cross-industry.

Moreover, although some technologies, architectural frameworks and applications across all IoT layers differ (edge computing and fog computing are typical in Industrial IoT, there are different types of network and connectivity tools, IIoT gateways serve other purposes, Industrial IoT platforms support other use cases than IoT platforms overall, digital twins are mainly about industrial markets, the use cases for augmented reality are not the same and so forth)between Industrial IoT and Consumer IoT an average large IIoT project will leverage several forms of connectivity and solutions of which some are used in consumer IoT as well.

Quantifying the IoT Market Potential

Source: Iscoop

Quantifying the IoT Market Potential

In 2016, the number of IoT-connected devices was estimated at 18 billion units and is expected to grow at approximately 15 percent CAGR to reach about 31 billion units by 2020.8

Alternatively and without regard to the end-use segment, the IoT market can be characterized in terms of four categories of products―device hardware, systems integration, network connectivity, and platforms/applications/cloud solutions.

These four categories taken together (which comprise the global IoT market) had an estimated market value of $0.4 trillion in 2015, and is forecasted to expand at approximately 20 percent CAGR to reach around $1.1 trillion by 2020

As mentioned, the enterprise/industrial sector is expected to account for by far the largest share of this global IoT market by 2020 at about 50–60 percent of total spending.


Source: Deloitte

IoT Platforms For Manufacturing Market Overview

40% CAGR 2018-2024


Source: IoTAnalytrics

Emerging IoT Applications by Industry

The IoT is transforming business models, given its applicability for a wide range of applications in different industries and geographies.

A sampling of the current and emerging IoT-related applications is summarized by industry.


Source: Deloitte

Characterizing the IoT Market Structure

IoT market segments can be generally divided into three broad categories: enterprise/industrial, consumer, and services/public sector.

Each of these segments is marked by distinct characteristics and market opportunities.


Source: Deloitte

Applications of the Industrial IoT Are Gaining the Most Traction

The most anticipated and promising use cases of the industrial IoT are quality control, remote monitoring of equipment, and tracking of assets or equipment on production sites.

Vendors are ready to deploy predictive maintenance, but customers have cooled slightly on the concept because it has proved harder to implement than they thought it would be.

On the other hand, customers are eager to try out augmented reality and virtual reality for maintenance and training, but most vendors aren’t quite ready.


Source: Bain

IoT Adoption – IIoT Will Overcome Adoption Barriers, Soar To $200 Billion By 2021

Bain predicts IIoT will overcome adoption barriers and grow into a $200B market by 2021.

Manufacturers still see growing potential for IIoT however they expect implementations to be slower than in 2016.

Cloud Service Providers (CSPs) including AWS IoT Greengrass, Microsoft Azure IoT, and IBM Watson IoT are succeeding in attracting IIoT developers at a faster pace than traditional IoT platforms.

Implementation risks are the main adoption barriers manufacturers are facing today including technical expertise, integration including system and data transition, and data portability risks.


Source: Forbes

IoT Adoption – Market Penetration Rates & Units

IoT devices and services will reach an inflection point of 18% to 20% adoption in 2019

DBS Asian Insights is predicting that the IoT installed base will grow from 6.3M units in 2016 to 1.25B in 2030

Source: DBS

IoT Adoption – Barriers for IoT Adoption 

Worries over integration with legacy systems, the areas of technical expertise, data portability, and transition risks are the most significant.


Source: Forbes

IoT Adoption – Barriers for IoT Adoption 

Bain finds that manufacturers are investing in more proofs of concept, and many are finding IIoT implementation more challenging than they anticipated.

Because of this, manufacturers’ expectations have dropped slightly.

Lowered expectations are balanced with the continual improvements in sensor technologies, improved APIs and software support, improved edge computing and edge analytics.


Source: Forbes

State of the IoT 2018: Number of IoT Devices Now at $7B – Market accelerating

The market for Internet of Things has seen a somewhat unexpected acceleration in Q1/Q2 2018 and has lifted the total number of IoT devices that are in use to 7B. This is one of many findings in IoT Analytics’ latest “State of the IoT & Short-term outlook” update.

Companies across the board, most notably IoT software, cloud and services companies, far exceeded revenue expectations. Microsoft Azure and Amazon AWS grew 93% and 49% respectively (within the last 12 months) with their IoT portion contributing significantly to the growth. But smaller players like C3IoT also reported a 60% revenue increase for the year.

Global Number of Connected Devices: 17B

The number of connected devices that are in use worldwide now exceeds 17 billion, with the number of IoT devices at 7 billion (that number does not include smartphones, tablets, laptops or fixed line phones).


Source: IoTAnalytics

Global Number of IoT Devices: 7B

The global connection growth is mainly driven by IoT devices – both on the consumer side (e.g., Smart Home) as well as on the enterprise/B2B side (e.g., connected machinery). The number of IoT devices that are active is expected to grow to 10 billion by 2020 and 22 billion by 2025. This number of IoT devices includes all active connections and does not take into consideration devices that were bought in the past but are not used anymore.


Source: IoTAnalytics

Global IoT Market: $151B Market in 2018, Forecasted to Grow to $1,567B by 2025

The global market for Internet of Things (end-user spending on IoT solutions) is expected to grow 37% from 2017 to $151B. Due to the market acceleration for IoT (as discussed above), those estimates have been revised upwards and it is now expected that the total market will reach $1,567B by 2025.


Source: IoTAnalytics

The Most Significant Barriers to IoT / Analytics Adoption

  • According to Bain, Security, IT/OT Integration and unclear ROI top the list
  • However, Interoperability, Data Portability, Vendor Risk and Network Constraints are becoming more of an issue for organizations
  • Legal / regulatory Issues and Vendor Lock-in are becoming less of an issue for organizations

Source: Bain

Size of the IoT Market By Application

  • According to IDC, worldwide spending on the IoT is forecast to reach $772.5B in 2018. That represents an increase of 15% over the $674B that was spent on IoT in 2017.
  • The global IoT market will grow from $157B in 2016 to $457B by 2020, attaining a Compound Annual Growth Rate (CAGR) of 28.5%.
  • Discrete Manufacturing, Transportation and Logistics, and Utilities will lead all industries in IoT spending by 2020, averaging $40B each.
  • Bain predicts B2B IoT segments will generate more than $300B annually by 2020, including about $85B in the industrial sector.
  • Internet Of Things Market To Reach $267B By 2020 according to Boston Consulting Group.
  • \By the end of 2020, close to 50% of new IoT applications built by enterprises will leverage an IoT platform that offers outcome-focused functionality based on comprehensive analytics capabilities.


Source: Statista

IDC IoT Spending Guide

IDC forecasts worldwide spending on the Internet of Things (IoT) to grow 16.7% year over year in 2017 –  just over $800B.

By 2021, global IoT spending is expected to total nearly $1.4T

IoT use cases that are expected to attract the largest investments in 2017 include:

Manufacturing operations $105B

Freight monitoring $50B

Production asset management $45B

Smart home technologies are forecast to experience a CAGR of 20%

The use case that should see the fastest spending growth are:

Airport facilities automation: 33.4% CAGR

Electric vehicle charging: 21.1% CAGR

In-store contextual marketing 20.2% CAGR



Top Use Cases for IoT


Source: IDC

IoT Early Adopters Share Insights – Successful Implementations

IoT-Early-Adopters-Share-Insights-Successful-Implementation IoT early adopters have developed an IoT strategy but are at the define and or build stage of execution.

Key considerations for an ideal IoT platform include:

  • Security 95%
  • Data Analytics 89%
  • End-to-end support 89%
  • User Interface 87%
  • Scalability 86%
  • Agility 86%
  • Interoperability 83%

47% of respondents have no formal IoT program in place yet but almost half (46%) state that they are currently defining or evaluating their IoT platform.

Of respondents whose organizations are planning to implement IoT, 73% say that they plan to outsource at least some of their implementation.

Source: HCL Technologies

IoT Early Adopters Share Insights – Expected Business Outcomes

Of respondents whose organizations are using or planning to use IoT, over 60% are looking to improve business process efficiency

Over 50% are focused on improving the use of data to drive insights

47% believe their organization would benefit by the use of value added service and the 47% believe they would gain a competitive advantage


Source: HCL Technologies

IoT Early Adopters Share Insights – How Much IoT Data is Analyzed

On average, only 48% of data collected by respondents’ organizations is analyzed.


Source: HCL Technologies

IoT Early Adopters Share Insights – Challenges

Respondents communicate that they struggle to leverage the large quantities of data that they collect.

91% of respondents report that they have challenges in turning data into insights.

46% state that they are not using the right platform

31% point to the platform as not being scalable

On average, it currently takes respondents 9 days to convert data into useful insight, which is more than4X longer than they would like (two days is their average ideal time).


Source: HCL Technologies

IoT Early Adopters Share Insights – Role of Service Providers

IoT early adopters believe their is value to be derived by using a service provider. Over 50% of respondents stated that IoT service providers are instrumental to ensure that their IoT devices are secure.

49% believe IoT service providers add value  by assisting in defining what IoT solutions can be used and by providing ongoing support

48% feel IoT service providers help maintain IoT devices.


Source: HCL Technologies

Technology & Innovation for the Future of Production: Accelerating Value Creation

  • The internet of things (IoT) is an evolution of technologies that were developed more than 15 years ago
  • Operations and automation technologies are coalescing with sensors, the cloud and connectivity devices of the information technology (IT) industry
  • Information Handling Services (IHS) projects the number of those devices are expected to grow to almost 80B by 2025, up from 17B today
  • The immediate opportunities for producers are in smart enterprise control, asset performance management in real time and smart and connected products and services.
  • Cybersecurity and interoperability challenges are hindering producers from embracing IoT on the factory floor and in their supply chains, with 85% of assets still unconnected
  • Artificial intelligence (AI) enables producers to make sense of the overwhelming data that their factories, operations and consumers generate, and to transform that data into meaningful decisions
  • Today, 70% of captured production data goes unused
  • Applying AI to the connectivity of IoT, producers are able to orchestrate and streamline business processes from desktops to machines, across department walls and tiers of suppliers
  • The most promising immediate opportunities for applying AI in production systems are in quality management, predictive maintenance and supply chain optimization
  • AI-enabled products will be a game changer for value propositions addressed to customers, and producers must be ready to orchestrate the value networks required to deliver these

Technology-&-Innovation-for-the-Future-of-Production- Accelerating-Value-Creation

Source: World Economic Forum

Gartner – Diversity of IoT Analytics Systems

Gartner summarizes the Analytics temperatures for:

  • Sensor and actuator analytics systems
  • IoT device analytics systems
  • Gateway analytics systems
  • Platform and streaming analytics systems
  • Enterprise analytics systems

Gartner - Diversity of IoT Analytics Systems

Source: Gartner

Gartner – IoT Extends IT Into the Physical World to Sense, Analyze, Act and Communicate

The marriage between the physical world and IT poses major challenges for technical professionals.

Integrating physical assets or control systems into the broader IT context is a complex undertaking that involves many heterogeneous and complex technologies.

Significant challenges arise for testing, quality and monitoring requirements.

Technical professionals must approach this opportunity with the right plans, architectures and practices to surmount these challenges and successfully deploy IoT solutions.

These are the 3 top priorities to achieve this goal

  • Develop an IoT technical strategy to manage complexity proactively
  • Architect and design for successful IoT execution
  • Build expertise in IoT architectural components

Gartner - IoT Extends IT Into the Physical World to Sense, Analyze, Act and Communicate

Source: Gartner

Gartner – Steps for Developing and Executing an IoT Technical Strategy

It’s important to approach IoT technology planning from a strategic perspective upstream in the process – before individual business units initiate efforts and then pull in IT to approve purchases.

Gartner’srecommended process of developing and executing an IoT technical strategy includes the key steps needed to address this priority:

  • Identify the team
  • Define the architecture
  • Govern the delivery process
  • Deliver solutions
  • Operate, manage and improve

A best practice is to establish an IoT center of excellence (COE) to ensure that the organization has the right staff in place, understands the desired business outcomes and has the right people involved in IoT strategy planning and execution sessions.

Gartner - Steps for Developing and Executing an IoT Technical Strategy

Source: Gartner

Gartner’s Three Tiers of an IoT Architecture

Organization sare expected to deploy multiple IoT solutions.

Rather than making and implementing Iot technology solutions in a one off, ad-hoc manner, address the opportunity in an integrated, holistic manner.

IoT solutions should be planned and deployed within a managed, repeatable framework to ensure they are executed consistently and in a manner that leverages institutional IP.

As an organization develops its IoT deployment competency, it will become more productive, efficient and cost-effective – avoiding chaotic and inefficient IoT implementations.

Develop an IoT architecture that can meet the needs of the organization holistically:

  • Process layer
  • Functional layer
  • Informational layer
  • Communication layer
  • Device layer

Gartner's Three Tiers of an IoT Architecture

Source: Gartner

IoT Barometer Report – Executives Are Researching & Launching IoT Projects

Vodafone’s fifth annual IoT Barometer Report, 2107

82% of companies who have adopted IoT define its role as integrating analytics, artificial intelligence (AI) and key digital initiatives

84% of respondent’s agree that their adoption and use of IoT solutions have grown in the last year

According to the Barometer study, 46% of IoT adoption companies have integrated with their Customer Relationship Management (CRM), Enterprise Resource Planning (ERP)

IoT Barometer Report

Source: Vodafone

IoT Barometer Report – Business Benefits

The greatest benefits of IoT can be achieved when IoT is taken beyond a project and integrated within the business

51% of adopter state that IoT is increasing revenue or generating new revenue streams

36% of respondent’s communicated that there organization saw an increase in revenue based on IoT and that growth was in excess of 20%

29% of IoT adopters reported cost reductions and that the decreases were in excess of 20%

IoT Barometer Report - Business Benefits

Source: Vodafone

Executives Are Researching & Launching IoT Projects

In 2017, 73% of Executives Are Researching & Launching IoT Projects

Manufacturing-based IoT connections grew fastest between 2016 and 2017 – 84%

73% of executives stated that they are either researching or currently launching IoT projects

The IoT platform market is expected to grow 35% a year to reach $1.16B in revenues by 2020

B2B uses are expected to account for  nearly 70% of the potential value enabled by IoT

Executives Are Researching & Launching IoT Projects

Source: EnterpriseIrregulars

Go to Market IoT Research From McKinsey

  • 75% of IoT experts communicate that IoT security is either important or very important, and that its relevance will increase
  • Only 16% of IoT experts stated that their company is well prepared for the challenge – insufficient budget allocated to IoT cybersecurity is a key barrier
  • When it comes to prediction capabilities, 16% of IoT experts interviewed felt well prepared, compared with 24 – 28% on prevention, detection and reaction
  • More than 1/3 of organizations lack a cybersecurity strategy that also covers the IoT

Go to Market IT Research From McKinsey

Source: McKinsey

Computerworld Forecast Study – IoT

Computer World Spending Forecast - IoT Plans

Go to Market IoT Research – Mary Meeker Internet Trends Report

Go to Market IoT Research – Forrester Summarizes Greatest Impact for IoT

Forrester Go to Market IoT Research –  IoT Is A Business-Driven Tech Trend That I&O Will Support for Each Use Case

  • A majority of global enterprises are using or planning to use IoT — but that doesn’t mean I&O leaders should rush to construct IoT infrastructure for the business. IoT tech is enormously varied and complex because it is designed to address a wide range of business applications that span many industries. I&O leaders must support business leaders as trusted advisors to support business-led use cases.

Forrester Go to Market IoT Research – Organizations Must Prioritize Your Firm’s IoT Applications And Use Cases

  • Forrester suggests that firms evaluate opportunities to deploy IoT-enabled applications and use cases based on three factors specific: (1) IoT use case applicability and maturity, (2) physical asset intensity, and (3) information and communications technology (ICT) spending.

Forrester Go to Market IoT Research – Evaluate The Impact Of IoT Application Deployment On Processes And Skills

  • Forrester believes that implementing IoT requires I&O executives to reassess technology solutions that is expected to help deploy, manage, and secure their organization’s connected devices and processes.
  • In addition, Forrester communicates that organizations will need to invest in new employee skill sets to enable IoT applications and analyze data captured from these connected products and applications.

Go to Market IoT Research – Forrester’s IoT Geographical Analysis

Forrester’s IoT Heat Map Highlights - IoT Plans

Go to Market IoT Research – Forrester’s IoT Industry Analysis

Forrester’s IoT Heat Map Highlights - IoT By Region

Go to Market IoT Research – Forrester’s IoT Use Cases

Forrester’s IoT Heat Map Highlights - IoT Top use Cases

Source: Cloudera

Go to Market IoT Research – Bain Defines the Battlegrounds of the Internet of Things

Go to Market IoT Research - Bain IoT Infographic

Go to Market Research – IoT – Consumer

  • As leading mobile platform providers expand into new markets with new products (wearables, smart homes, cars) many software and hardware companies will find their niche in the IoT ecosystem.
  • Companies that invest in learning which platforms offer the best market opportunities, depending on their region, industry, use case and capabilities.
  • Serious competition among a small set of platform providers is expected as they will use scale, developer communities, device partnerships and businesses subsidized by data as competitive weapons. Creating platform stickiness and bridging customers across industry segments will be the critical to go to market plans.

Go to Market Research – IoT – Enterprise & Industrial

  • As industrial and enterprise equipment and devices become connected, incumbents will focus on specific industries to build on their domain expertise and customer relationships by expanding into broader offerings.
  • Many companies are expected to form partnerships, either to improve their capabilities (especially in analytics & security) or to acquire expertise in adjacent industries.
  • Companies that can build scale and make partnerships work have the opportunity to shape platform standards. Given the diversity of industries, expect a wide range of vendor platforms that may share common features but are tailored for particular uses.

Go to Market Research – IoT – Network & Gateway

  • Connecting devices through the network provides opportunities for new products and services.
  • Edge analytics and real-time (or low-latency) services will become increasingly important – close to sources of data rather than in the data center.
  • Many companies will look to their long-standing relationships with network equipment makers and telecom service providers to capitalize on market opportunities.
  • Telcos are expected to try and capitalize on the proliferation of devices and apps in several ways. First, they will improve connections with better directory services to locate, authenticate and connect remote devices. Second, they will offer life-cycle management services to maintain, upgrade, secure and provision the complex device and sensor networks.

Go to Market Research – IoT – Analytics

  • Analytics are expected to emerge as a critical platform battleground.
  • Traditional analytics vendors, cloud service providers and system integrators could successfully extend their customer relationships and scale into tailored products and services.
  • On the other side of the coin, new pure play vendors will offer custom analytic solutions in which limited integration with broader data sources is needed.
  • Partnerships with industry incumbents will be important for both horizontal and pure play vendors.

Go to Market Research – IoT – Autonomous

  • Robotics, drones and autonomous driving are among the most greenfield of all these applications.
  • Robotics, drones and autonomous driving differ in that most sensor information is collected locally and processed on board, with less (though not zero) connectivity back to the cloud, creating different demands on local vs. remote data storage and processing than other Internet of Things applications.
  • Real-time capabilities and technologies such as computer vision and machine learning will be important differentiators for success.

Source: Bain – Defining the Battlegrounds of the Internet of Things

Read Pragmatic Posts on B2B Marketing >>

Download Go to Market Templates (FREE) >>

View the Go to Market PowerPoint Slide Library >>

Leverage Proven Go to Market Planning Templates >>

Back to Go to Market Research Main >>

Go to Market Planning Templates