According to a study by Boston Consulting Group (BCG), global spending for IoT technologies will reach $270 billion (250 billion euros) by 2020. BCG predicts that technology investments in areas such as technology services, as well as IoT applications and analytics, account for 60% of the global IoT spend. The other 40% comprises security, communication, and IoT backbone technology.
More and more businesses are implementing IoT into their daily operations and budgets, but most businesses are not looking to build entire IoT software stacks themselves or to handle security in house. Third-party security, software as a service (SaaS), and platforms as a service (PaaS) will gain serious momentum in the coming years since they make it easier for businesses to set up IoT infrastructures.
Security That Protects All
Investment in IoT security technologies is essential for the growth of the entire IoT industry. The more widespread IoT becomes, the larger a target it becomes for hackers, especially for healthcare, fleet telematics, commercial aircraft, autonomous vehicles, and other industries where IoT is used to transmit sensitive information. Investment in IoT security also makes it more attractive for businesses to set up their own IoT infrastructures without fear of losing valuable data or being vulnerable to attacks.
Gartner predicts worldwide spend on IoT security will top $348 million in 2016. Computer Business Review states that security spend across the industry will increase to $547.2 million by 2018 and continue to grow from there:
All-in-One IoT Solutions
Another area of IoT that is experiencing large funding growth is IoT applications and services. Just a decade ago, implementing IoT monitoring required custom code and solutions, including data collection, analytics, and pulling reports on actionable data. Now, IoT service providers are developing their own ready-to-use software stacks for customers, effectively lowering the financial and technical barriers of creating an IoT system. This is a huge boon for smaller companies that require the immediate advantages of IoT, but have not had the scale necessary to implement custom software and services spending.
According to Zinnov, the spend for managed IoT services will reach $143 billion by 2021. There always will be certain large scale and industrial IoT operations that require completely custom solutions, but the market shows that future IoT investment trends will veer toward SaaS and PaaS platforms. IoT companies and service providers who don’t invest in IoT platforms that include automatic data collection, analytics, security, and customized alerts will lose out on the revenue from new IoT adopters who held out for a simple, all-in-one solution.
For more information on how you can take advantage of the changing IoT landscape for your business needs, contact Aeris today.
To learn more about opportunities in the growing IoT market, read about Aeris’ partnership with Tech Mahindra, which provides a blueprint for mobile operators to build a scalable and profitable Internet of Things (IoT) business.