Strategy Analytics says the market will be worth billions of dollars, not trillions.
Internet of Things Hype:
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It’s been a good week for hype correction both globally and locally, with analysts taking the air out of respective bubbles surrounding both chatbots and the Canadian wireless market. Add the internet of things to the list.
Boston-based Strategy Analytics has issued a new report criticizing some of the expectations for the internet of things, or IoT, suggesting that the market has been wildly overvalued. While some observers expect the IoT opportunity over the next decade or so to be in the trillions of dollars, the real value will be considerably lower.
“Can IoT really be bigger than the entire IT industry?” said Strategy Analytics president Harvey Cohen in a release. “The economic value potential of IoT is indeed huge, but the opportunity for suppliers of products and services is likely to be measured in $US billions, not trillions.”
To reach its dialled-down conclusions, the firm polled IT decision makers in the United States, United Kingdom, France and Germany and found that two-thirds of businesses had spent less than $100,000 (U.S.) on IoT projects. About a third that had deployed IoT projects also had fewer than 100 connected devices.
Among the many roadblocks holding back IoT are, “security, integration with legacy systems, proliferation of standards, privacy concerns, compliance issues, and the skill sets needed to extract value from the huge volume of data produced,” according to the respondents.
Total global IT spending will grow to $4.8 trillion in 2025 from $3.3 trillion in 2015, while global IoT spending will top $300 billion in 2025, up from $120 billion, the firm says.
That’s still a lot of money, but estimates that see IoT spending going into the trillions have “a credibility problem,” Cohen said.
Strategy Analytics didn’t point fingers at any specific trillion-dollar predictions, but London-based Machina Research last year issued a report forecasting IoT spending would hit $3 trillion by 2025. As the old saying goes: booyah.
Now if only someone would take a more sober look at augmented reality’s supposedly glorious future market potential.