Everyone knows the industrial Internet of Things (IIoT) is growing. Whether you look at funding, data generated, or market acceptance, you can see how IoT is transforming the business landscape. But where are the best opportunities, and how should companies position themselves to take advantage of them?
If you look at the opportunities by market segment, Automotive is by far the strongest, particularly in OEM Telematics and After-Market Telematics (numbers from ABI Research). Together, these segments make up nearly 47 percent of the estimated 202o market of $196.5 billion for IoT software and service. Fleet management is also large, showing the near-term importance of transportation in general.
Does this mean you should focus your IoT efforts around penetrating this potentially profitable vertical? Not at all. The IoT software and service market will reward those who focus on their industry expertise—and the market for every segment will grow dramatically.
Market segments like agriculture and user-based insurance will grow at an average annual rate of around 40 percent. Home security and video surveillance will together be a $26 billion market.
Other analysts, including Gartner and McKinsey, partition the market somewhat differently, but they too see growth in various segments, from Smart Cities to healthcare. The factory floor will be particularly significant. Smart Cities includes such things as smart commercial buildings, public services, and utilities, and has seen strong growth in number of connected things.
Takeaway: there’s plenty of the IoT market to go around. Worry less about the size and growth rate of a particular segment and more about what benefit you will bring to your customers.
The hidden transformation IoT enables is building the connection between operational technology (OT) and information technology (IT). In most businesses OT and IT are separate sides of the house and do their business largely separately.
The data flows from connected assets, products, and services will make it essential for these two groups to work together. The only way to achieve that in a reasonable amount of time, with minimum disruption, is to base the integration on a capable IoT platform.
According to both Gartner and ABI, IoT Service Provider revenue is expected to grow at an annual average of 17 percent to 2020—but the share of that revenue related to the use of IoT platforms at 21 percent. IoT-platform-enabled providers will grab a larger and larger share of the market.
Takeaway: support your efforts with an IoT platform, and ensure that your customers get the benefit of your expertise quickly and efficiently.
Being a first mover is good. Being a smart mover is even better. No one will survive in this market alone. Everyone must partner, team, and be a member of an ecosystem. With an IoT platform to enable and support integration, you can succeed.
Access the replay of our webcast to learn the size and scope of the global IoT market, technologies and capabilities that are key differentiators, emerging and actionable settings and use cases in the market.
A former engineer, Alex is now a writer on technical and healthcare business topics. He also provides marketing content for technical and healthcare businesses of all kinds at www.sturdywords.com.