Worldwide spending on the Internet of Things (IoT) to grow 17% year over year in 2017, and to be near $1.4 trillion by 2021, according to IDC.
"The discussion about IoT has shifted away from the number of devices connected," said Carrie MacGillivray, VP for Internet of Things and mobility at IDC. "The true value of IoT is being realized when the software and services come together to enable the capture, interpretation, and action on data produced by IoT endpoints."
The IoT use cases that are expected to attract the largest investments in 2017 include manufacturing operations ($105 billion), freight monitoring ($50 billion), and production asset management ($45 billion).
Smart grid technologies for electricity, gas and water and smart building technologies are also forecast to see significant investments this year ($56 billion and $40 billion, respectively).
While these use cases will remain the largest areas of IoT spending in 2021, smart home technologies are forecast to experience strong growth (20% CAGR) over the five-year forecast. The use cases that will see the fastest spending growth are airport facilities automation (33% CAGR), electric vehicle charging (21% CAGR), and in-store contextual marketing (20% CAGR).
The industries making the largest IoT investments in 2017 are manufacturing ($183 billion), transportation ($85 billion), and utilities ($66 billion).
From a technology perspective, hardware will be the largest spending category until the last year of the forecast when it will be overtaken by the faster growing services category. Hardware spending will be dominated by modules and sensors that connect end points to networks, while software spending will be similarly dominated by applications software. Services spending will be about evenly split between ongoing and content services and IT and installation services.