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IoT Spending on the Rise, to Hit $1.1 Trillion by 2023

A recent report by market research firm International Data Corporation (IDC) projects that global spending on Internet of Things (IoT) software, hardware and services will surpass $1 trillion in 2022, and reach $1.1 trillion by 2023. The report projects aggressive growth in both commercial and consumer sectors, as well as increasing spending on public cloud deployments and data management, processing and analytics.

The IDC Worldwide Semiannual Internet of Things Spending Guide is released periodically and covers 53 countries and 20 industries, including banking construction, healthcare and government.

The latest report projects that spending around IoT will grow at a 12.6 percent compound annual growth rate, from $726 billion in 2019 to $1.1 trillion in 2023.

The study found that spending on IoT services in 2019 outstripped for the first time spending on IoT hardware. IDC expects services to remain the top spending category through 2023. IoT services and hardware spending, taken together, account for about two-thirds of all IoT spending in 2019.

The study identifies discrete manufacturing, process manufacturing, and transportation as the three most active commercial sectors for IoT spending, accounting for nearly a third of global spending around IoT in 2023. Consumer market spending, meanwhile, is expected to grow at a brisk 16.8 percent CAGR through 2023, vaulting it past discreet manufacturing as the largest source of IoT spending by 2023. Smart homes and connected vehicles currently lead IoT spending in the consumer space.

Going forward, IDC expects vertical industry IoT platforms and cloud deployments for IoT software to dominate. The report states:

"More than three quarters of all spending on IoT platform software – middleware that provides the device management, connectivity management, data management, visualization, and applications enablement for connecting IoT endpoints – will go toward software packages that integrate and support devices, applications, data schemas, and standards of a single industry."

According to Carrie MacGillivray, group vice president, Internet of Things, 5G, and Mobility at IDC, organizations can also expect to see increased spending to handle data produced by IoT deployments.

"While organizations are investing in hardware, software, and services to support their IoT initiatives," MacGillivray says, "their next challenge is finding solutions that help them to manage, process, and analyze the data being generated from all these connected things.

About the Author

Michael Desmond is an editor and writer for 1105 Media's Enterprise Computing Group.