Forecasting the IoT market opportunity: USD4.3 trillion in 2024

In the most recent copy of the Machina Research M2M Forecast Database, the global M2M market opportunity will be USD2.5 trillion by 2024. Devices, connectivity and M2M services are the core components of this M2M market.

It is a market that has enabled enterprises to deliver such innovative services as improved energy management through smart metering, user based insurance in the automotive industry, and real-time patient information from wearables in healthcare. It is also a market that provides a suitable starting point for forecasting the IoT market opportunity. IoT is a successor market from M2M yet a significantly different one. This becomes clearer as we explore the attributes and additional components that make up the IoT market opportunity.

Traditional M2M markets are changing to support an emerging IoT world. From solutions designed to monitor hundreds and thousands of fairly homogenous remote assets and devices for singular application purposes, in the emerging IoT world, these solutions will be required to monitor, manage, and actuate data from millions of heterogeneous remote things, including other IoT applications, corporate IT systems and social media. IoT is focused on an extensively more open and shared data and applications approach, recognising that the benefits and value for enterprises in IoT will be achieved from applications and data rather than devices and connectivity. It follows that the additional IoT market opportunities will be found in these areas.

In pursuit of this open and shared data and applications approach, the IoT market begins to leverage sectors that have a longer tradition in Information Technology (IT) markets. These sectors include data centre systems (cloud services), system integration, enterprise software, and more general IT services such as application hosting and provisioning.

These are in fact disruptive times for traditional IT industry service providers. Not necessarily in technology terms but in terms of standards and best practices where service providers are having to adopt IoT standards and best practice frameworks. One of the major developments expected by Machina Research is that IT markets will eventually be subsumed by IoT markets because of the pervasive nature of these IoT standards on the enterprise implementations.

With the shift from M2M to IoT, these additional revenue streams from professional services, platforms and middleware, applications and data monetisation and IoT Services will deliver an additional USD1.8 trillion to the total forecast IoT market opportunity for 2024.

This will bring the total IoT market opportunity to USD4.3 trillion by the end of 2024, reflecting a significant change in the markets from USD900 billion in 2014. As shown in Figure 1, the main IoT market opportunities by the end of 2024 will be in applications, professional services (system integration and strategy), M2M services and devices.

The IoT market opportunity presents significant opportunities across a growing ecosystem of technology and service providers. But more importantly, the IoT market will enable enterprises to design and deliver new and innovative products and services to their customers, improving business efficiency, enhancing customer experience, and ultimately generating additional economic activity across global markets.