Internet of Things Expected to Hit $7.1 Trillion by 2020

A recent study conducted by the International Data Corporation, titled “Worldwide and Regional Internet of Things 2014-2020 Forecast”, states that the Internet market is expected to reach the $7.1 trillion mark by the year 2020. This represents growth of over $5 trillion across the next 6 years. Why exactly will the Internet of Things (IoT) market boom?

Global Reach Propels Marketplace

The IoT’s rapid rate of growth is due to the expansion of high speed internet around the globe that has empowered people to be online nearly anywhere at any time of the day.

The $7.1 trillion figure is calculated based on revenue from the IoT system shipments themselves as well as revenue from connectivity services, infrastructure, purpose-built IoT platforms, applications, security, analytics and professional services attributable to the base of installed IoT systems. The figure is so astounding because in 2013, the global IoT market stood at “just” $1.9 trillion. The remarkably lofty growth expectations will come at nearly a 20% increase per year.

The vast majority of IoT devices exist in First World, “developed” nations. This makes the market especially potent because of all the capital that exists in those countries as well as their consumer oriented populations. These people have significant discretionary income and more of their time is being spent online to shop, play (and buy) games, as well as read and web surf.

First World citizens are spending an incredible amount of time with their Internet connected devices, making it much more likely that they will use them to buy and even sell products (think eBay and other auction sites). Most citizens in developed nations have Internet access not only on computers but also on their smartphones and tablets. They can make purchases while riding in a car, while on an airplane or while strolling through the park. The web has empowered us to consume at any hour of the day, nearly everywhere. This is exactly why the IoT market will reach the $7 trillion mark in the near future.

The Business Side Of IoT

Yet it isn’t just consumers who are doing all of the buying and selling. Businesses are also driving the IoT as they conduct transactions online at an ever increasing pace. Vernon Turner, the IDC’s senior vice president of enterprise infrastructure, consumer, network, telecom and sustainability research states, “Businesses are taking the necessary steps to gain a deeper understanding of IoT…technology vendors are evolving their solutions in a supply-driven market that’s edging toward becoming a more demand-driven market”.

The two top IoT businesses are Google and Apple. Each likes to proclaim themselves as the king of IoT but it appears as though Google is on track to win the crown. Google is on a spending spree, acquiring manufacturing companies as well as companies that focus on Internet technologies.

Both Google and Apple are invested in home automation technologies that allow homeowners to use applications on their mobile devices to control their home security systems as well as other domestic functions like thermostats, lights and locking / unlocking doors. The IDC’s findings include that 43 percent of US broadband homes are already willing to invest in a smart home package that offers home management, safety and security features.

Yet the focus of online enabled security goes far beyond the home. While we are beginning to use the web to protect our personal valuables and property, our increased reliance on the IoT also makes us that much more vulnerable in a virtual sense. As more devices go online, security risks are also increased in different ways. Private organizations, consumers and governments must work in unison to help prevent fraud and theft or the public could eventually lose trust in virtual transactions.