IoT market size has been dramatically inflated, says analyst firm

IoT

The potential of the IoT market has been overblown and will account for just seven percent of global IT spend in 2025, new research has forecast.

Strategy Analytics said claims that the IoT had become mainstream were wide of the mark and that the market had “ a credibility problem”.

The IoT accounted for 3.8 percent of global IT spend in 2015, the research said, and will grow to 7.1 percent by 2025.

Strategy Analytics based its figures on interviews with “IT decision makers” across nine vertical markets in the US, the UK, France, and Germany.

It found that 35 percent of firms with IoT deployments had fewer than 100 devices connected.

In the US, two-thirds of businesses spent less than $100,000 on IoT projects, it said.

Last year, Machina Research said IoT revenues were set to top $3 trillion in 2025, up from $750 billion in 2015.

Harvey Cohen, President of Strategy Analytics, said: "Estimates that put the IoT market value at $3 trillion or more have a credibility problem.

“Can [the] IoT really be bigger than the entire IT industry?

“The economic value potential of [the] IoT is indeed huge, but the opportunity for suppliers of products and services is likely to be measured in $US billions not trillions.”

Machina, now owned by Gartner, declined to comment.

Strategy Analytics also took issue with the likes of Vodafone, which said last year that the IoT market had “entered the mainstream”.

[Read more: Vodafone hails 50 million IoT connections]

David Kerr, a VP at Strategy Analytics, commented: "Claims that the IoT market has progressed from experimental to mainstream are just not supported by Strategy Analytics voice of the buyer data yet.

“[The] IoT must compete for a share of the total IT budget; businesses and public entities move slowly and are not easily convinced by vague claims of future economic benefit."

Services will continue to be the biggest revenue opportunity accounting for 64 percent of global IoT revenue by 2025, Strategy Analytics said.

The challenges for providers, notably security, integration with legacy systems, proliferation of standards, privacy concerns, compliance issues, and the skill sets needed to extract value from the huge volume of data produced, are myriad.

As such, partnerships and alliances will be critical, as no one company can serve every IoT requirement.

More News

Orange, China Telecom join forces in enterprise IoT push Orange, China Telecom join forces in enterprise IoT push Orange Business Services and China Telecom are offering IoT-focused enterprises access to each other’s networks, after signing a new deal. More detail
Orange wins exclusive rights to new Besson film Orange wins exclusive rights to new Besson film Orange has partnered with acclaimed French director Luc Besson on his upcoming film release, in its latest foray into the content space. More detail
BICS boosted by China Unicom roaming deal BICS boosted by China Unicom roaming deal Proximus’s troubled wholesale division has won a major contract to provide China Unicom Global with roaming services. More detail
Wind Tre CEO replaced by former Deutsche Telekom, Swisscom exec Wind Tre CEO replaced by former Deutsche Telekom, Swisscom exec The CEO of Wind Tre has left just six months after the Three-VEON joint venture launched on the Italian market. More detail
TIM to be Europe’s first “official mobile broadcaster” for the Olympic Games TIM to be Europe’s first “official mobile broadcaster” for the Olympic Games TIM has signed a deal with Discovery Communications to offer content from the Olympic Games to subscribers. More detail
    

@eurocomms