News

The 'Internet of Things' Set to Explode

Several analyst firms are predicting industry disruption, starting as early as 2015.

• By Keith Ward
• 11/13/2014

IoT can be loosely defined as the network of physical objects using embedded technology. It can come in both business and consumer forms, and is gaining ground rapidly. Gartner, Inc. estimates a 30 percent increase in those "things" in 2015 as compared to the current year. This increase will have a transformative effect on business, the analyst firm predicts.

"The digital shift instigated by the Nexus of Forces (cloud, mobile, social and information), and boosted by IoT, threatens many existing businesses. They have no choice but to pursue IoT, like they've done with the consumerization of IT," Jim Tully, vice president and distinguished analyst at Gartner, said in a press release.

Gartner forecasts the size of the IoT at 4.9 billion next year, a number it sees reaching 25 billion by 2020. Along with that increase comes a corresponding jump in money spent on IoT services, from $69.5 billion in 2015 to $263 billion by 2020.

For next year, Gartner expects the consumer space to account for nearly 3 billion of the 4.9 billion "things." The fastest growing market for the IoT will be the automotive industry, which Gartner expects to have a growth rate of 96 percent in 2015.

"The number of connected intelligent devices will continue to grow exponentially, giving 'smart things' the ability to sense, interpret, communicate and negotiate, and effectively have a digital 'voice'," said Steve Prentice, vice president and Gartner Fellow.

Forrester Analyst Frank Gillett also sees the business disruption the IoT is threatening to cause. In his 2015 predictions, he says that:

"CIOs will find that IoT becomes another force driving the digital transformation of their company. Until now, business units have implemented IoT with little involvement from the CIO's technology management org. But no longer. The growing scope and importance of the data from IoT will force CIOs to integrate the Internet of Things into their Business Technology agenda, with full capabilities for data management, analytics, security, and enterprise application integration."

Gartner's Prentice goes a step further, stating that CIOs need to go beyond mere making various devices "smart," and creating new business models from the emergence of the IoT. If not, the competition certainly will.