The Internet of Things Market Trends

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The Internet of Things
Market Trends

by Geoff Keston

Docid: 00021620

Publication Date: 2210

Report Type: MARKET


The Internet of Things (IoT) refers to efforts designed to extend the
dominion of the internet from cyber space to the physical world, creating
a network of intelligent devices that form the digital/physical equivalent
of the body’s central nervous system. A rapidly expanding field, both
technologically and economically, MarketsandMarkets predicts that the IoT
market will grow from $300.3 billion in 2021 to $650.5 billion by 2026,
reflecting a compound annual growth rate (CAGR) of 16.7 percent during the
forecast period.

Report Contents:

Executive Summary

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The Internet of Things (IoT) refers to efforts designed to extend the
dominion of the internet from cyber space to the physical world, creating
a network of intelligent devices that form the digital/physical equivalent
of the body’s central nervous system.

The Internet of Things Tutorial
The Software of the Internet of Things Tutorial

The purpose of the IoT is twofold:

  1. To gather information about physical processes in order to improve
  2. To exercise real-time control over physical processes in order to
    affect greater efficiency and effectiveness.

As an example, the US and other nations are presently engaged in building
so-called “smart grids.” These electric grids incorporate microprocessors
to record and report information relative to electric utilization –
information that will enable electric providers (and consumers) to better
regulate and conserve costly energy resources.

While the potential impact of the Internet of Things is often diminished
by discussion of questionable applications like smart refrigerators that
inventory their contents and automatically place orders for depleted food
stuffs, the IoT promises to enhance:

  • Manufacturing, through the introduction of smart production equipment
  • Transportation, through intelligent vehicles and traffic control
  • Urban Infrastructure, through community-wide deployment of smart
  • Healthcare, through “body area networks” and assistive systems
  • Emergency response, through IP-enabled surveillance systems

IoT Market

A rapidly expanding field, both technologically and economically,
MarketsandMarkets predicts that the IoT market will grow from $300.3
billion in 2021 to $650.5 billion by 2026, reflecting a compound annual
growth rate (CAGR) of 16.7 percent during the forecast period.1

IoT Platforms

Over the past few years, the marketplace has significantly matured as many
of the top vendors released Internet of Things platforms that provide
centralized device management and data analysis functionality
for products from a variety of vendors. Whereas organizations
previously needed to do much of the configuration work themselves, platforms
now provide unified administration as a product or cloud service. Examples
of leading platforms include:

  • Amazon Web Services IoT Core
  • GE Predix
  • Google Cloud Platform IoT Core
  • IBM Watson IoT
  • Microsoft Azure IoT Edge

Market Dynamics

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In their latest Internet of Things market report, “IoT Market by
Component (Hardware, Software Solutions and Services), Organization Size,
Focus Area (Smart Manufacturing, Smart Energy and Utilities, and Smart
Retail) and Region (2022 – 2026),”2 MarketsandMarkets
attributes the present state of the IoT market to several factors, both
positive and negative.

Positive: Access to Low-Cost, Low-Power

“Initially, the cost of sensors used in IoT
devices was relatively high, resulting in the limited adoption of the
technology among industries. However, the rapid fall in the prices of
these sensors has led to a significant increase in the adoption rate of
IoT across organizations.”

Negative: Lack of Access to Advanced
Communication Technology

Various areas, including parts of the Asia
Pacific, Middle East and Africa, and Latin America regions “suffer from
the unavailability of basic technologies.” While the US and Europe are
busy rolling out 5G, which greatly facilitates IoT communication and
interoperability, some countries are struggling to maintain – or even
introduce – 4G services.

Positive: 5G As the IoT Superhighway

In the developed world, 5G is steadily
replacing 4G as the telecommunications standard. As this transition
occurs, an increasing number of wireless connections are able to handle
the demands of mission-critical applications, especially in telecom and
industrial use cases. Protocols such as ultra-reliable low latency
communication (URLLC) have been developed and are being put to wider use
for everything from wearable consumer products to industrial robots.3
Other applications – current, emerging, and predicted – are in healthcare,
smart cities, and utilities, among others.4

“The long-term map for 5G IoT promises to
support a density of devices far beyond what current-generation LTE can
deliver – up to a million ‘things’ per square kilometer, versus almost
61,000 under today’s 4G.”5

Positive: A Track Record of IoT Success

Although a relatively new set of technologies,
IoT can already claim enterprise application and success, especially in
certain verticals:

“The healthcare sector has
already initiated the implementation of IoT across application areas,
including remote consultation and monitoring, virtual health kiosks and
portals, and electronic personal health records.

“The energy sector deploys
IoT-based solutions for predictive maintenance, asset performance
management (APM), security, mobile workforce management, field
surveillance and monitoring, and [other applications].

“IoT in the transportation sector
helps in congestion control, safety maintenance, city traffic
surveillance, and crime reduction.”

Negative: Lack of IoT Awareness

Unlike now-common concepts like cloud
computing and artificial intelligence, the Internet of Things and its
variants, like the Industrial Internet of Things (IIoT), are still foreign
to many observers, even technical observers. “This lack of awareness …
is an important factor slowing the development of [an IoT-enabled] smart

In their most recent IoT findings, “Internet
of Things (IoT) Market, 2022-2029,”6 Fortune Business Insights
sees IoT-fueled “smart city” technology being deployed in individual homes
and other structures.

Positive: Smart Cities to Smart Homes and

“The rising trend for smart city solutions has
encouraged stakeholders to bolster their penetration across untapped
areas. The footfall of smart meters, smart light and sensors will further
gain prominence from the demand for smart homes and buildings.”

Market Leaders

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The Internet of Things market space is broad and diverse, with the
effect that no single provider – or set of providers – can claim true
market dominance. Among today’s more prominent market participants

  • Amazon Web Services
  • Intel
  • Microsoft
  • PTC
  • Robert Bosch
  • Cisco Systems
  • IBM
  • Oracle
  • SAP
  • Siemens 7

So far, the trend has been for more and more companies to enter the
market, not for the market to consolidate around a small group of leaders.
This trend might continue because there are many types of technologies and
services within the Internet of Things. IoT providers are not necessarily
competing against each other. Instead, each is often providing one piece
of the overall puzzle. For instance, some provide sensors, some offer the
monitoring software that analyzes data from the sensors, some focus on
connectivity between the sensors and the data centers that store
information from them, and some provide security for these systems, to
mention just a few types of companies in the market. Different niches can
be defined based on whether an application targets consumer use or
business use and, within the business segment, markets such as energy
provide additional niches.

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A rapidly expanding field, both technologically and economically,
MarketsandMarkets predicts that the IoT market will grow from $300.3
billion in 2021 to $650.5 billion by 2026, reflecting a compound annual
growth rate (CAGR) of 16.7 percent during the forecast period.8

One potential future development is the creation of nano-sized devices
that work on the Internet of Things. Design work on this concept is still
in the formative stages but, if successful, it would extend the Internet
of Things to new places such as inside the human body. Describing this
vision, an analysis by Javier Garcia-Martinez explains that “Because they
are so small, nanosensors can collect information from millions of
different points.

External devices can then integrate the data to generate incredibly
detailed maps showing the slightest changes in light, vibration,
electrical currents, magnetic fields, chemical concentrations and other
environmental conditions.”9 The market for nano devices on the
Internet of Things is expected to grow quickly, at a compound rate of 22.2
percent, reaching $37.9 billion by 2027.10 In the future, the
nano-devices network could be broadened to include bacteria and other
biological components.11

Another potential development is the increased use of blockchain to
secure Internet of Things transactions. Blockchain is a method of
recording and verifying transactions across a distributed, non-proprietary
network. Best known for its use in verifying Bitcoin transactions, it can
also be used to facilitate exchanges between devices. Interactions among
Internet of Things devices are meant to be quick and automatic, two of the
characteristics of blockchain transactions. One of the main promoters of
the idea of using blockchain for the Internet of Things is IBM, which has
hosted events to promote the concept.12

But blockchain’s applications beyond ensuring cryptocurrency transactions
remain tentative and are being explored at a measured pace. Attempts to
use “blockchain-like” technology are beginning in the industrial sector,
but they are sill relatively preliminary.13

Strategic Planning Implications

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When developing and deploying applications to be used on the Internet of
Things, there are a number of critical issues to consider.


Depending on the application, machine-to-machine failures could cause
environmental damage, threaten security interests, and, potentially, put
lives in jeopardy. For these reasons, IoT applications should be
engineered to be redundant and to protect against inadvertent or
intentional tampering.

Researchers are developing ways to make IoT networks more fault tolerant
and less prone to failure.14 But real-world uses and the
release of new products are likely moving faster than this lab work, so
organizations need to be cognizant of reliability as they put together
their own IoT systems.


From a client perspective, machine-to-machine applications provide
automated monitoring and response, eliminating or, at least, reducing
human intervention, thus improving operational efficiency and lowering
personnel costs. As with any IT initiative, enterprises should ensure
that such efficiencies will be realized before committing to an expensive
and potentially disruptive machine-to-machine implementation. Whenever
possible, Internet of Things projects should be piloted before any
decision on full deployment is made.

Data Security and Privacy Concerns

Devices on the IoT are vulnerable to security threats that are similar to
those that threaten typical computers. But organizations are not as good
at protecting their IoT technology. “The main issue regarding the security
of IoT devices is that they are often built with functionality and ease of
use in mind rather than security,” says security company Check Point.15
“This is mainly due to the device manufacturers’ pursuit of profitability
over user security. In turn, this means there is much potential for a
large number of vulnerabilities to be exploited and the risk to users is

And beyond security, privacy is a concern. IoT data is sold in a similar way
to internet data, and this practice is likely to grow.16 The
privacy ramifications of selling this data are likely to not be understood
immediately, and if the use of internet data is a guide, organizations will
push this practice as far and as wide as they can.


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About the Author

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Geoff Keston has written more than 250 articles that help
organizations find opportunities in business trends and technology. He also
works directly with clients to develop communications strategies that
improve processes and customer relationships. Mr. Keston has worked as a
project manager for a major technology consulting and services company and
is a Microsoft Certified Systems Engineer and a Certified Novell

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