The Internet of Things is not just the latest buzzword. The IoT — which refers to the practice of connecting objects, appliances, buildings, and equipment to the web — is already a significant factor for major industries, particularly manufacturing.
- Industrial companies are early IoT adopters, using it to create new internet-assisted manufacturing systems: 18% of industrial machinery companies are already using IoT devices, according to a recent survey from SAS.While this doesn’t measure the extent that the IoT has been implemented by these manufacturers, it’s notable that almost one-fifth of major manufacturing companies are already using the IoT to increase production and reduce costs. For example, plastics manufacturer Petrobas Zarate of Argentina added sensors to the factory to monitor the temperature so it could ensure the plastic was created under optimal conditions.
- It’s already big in the massive global auto industry:Nearly as many automotive companies, 17%, are using IoT devices in the production of their vehicles. Volkswagen added an SAP system that keeps track of all of their parts’ supply pipeline to help them track where items are located at all times.
In a new IoT report from BI Intelligence, we size the enterprise IoT market, noting the breakdown between hardware versus software spending, and determine which industries will upgrade to the IoT first. We examine how businesses are already using IoT systems and what barriers might still stand in the way of IoT enterprise upgrades.
Here are some of the key findings from the BI Intelligence report:
- It’s not just manufacturing. The transportation and warehousing, and information sectors will also be top investors the in IoT systems and devices in the next five years. But manufacturers are currently the leading industry to use IoT devices and we estimate there total IoT investment will reach $US140 billion over the next 5 years.
- In all, the enterprise sector will account for 39% of the roughly 23 billion active IoT devices we expect by the year 2019. We believe it will be the largest of the three main IoT markets including enterprise, home, and government.
- Spending on enterprise IoT products and services will reach $US255 billion globally by 2019, up from $US46.2 billion this year, according to our estimates. This represents a 5-year CAGR of 40%.
- Enterprise IoT software providers will earn far more than those who provide IoT hardware. Enterprise-focused IoT software and services sales will reach $US43.9 billion by year-end, while hardware will account for about $US2.3 billion in revenue, according to our estimates.
- The primary barriers to installing the IoT within businesses include the high costs for installation and increasing vulnerability to a cyber attack.
The full report:
- Examines how many IoT devices the enterprise will use and what those devices will look like
- Forecasts the value that businesses will see from implementing IoT solutions and the amount that will be spent upgrading
- Analyses executives sentiment towards the IoT and how they are already putting the IoT to work
- Examines which industries are at the forefront of implementing the IoT and how they use the data the IoT generates
- Provides specific case studies of how businesses are using IoT systems in their workplace
For full access to all BI Intelligence reports, briefs, and downloadable charts on the Internet of Things and mobile computing markets, sign up for a risk-free trial membership.
Business Insider Emails & Alerts
Site highlights each day to your inbox.