Strategy Analytics criticises IoT revenue forecasts - Mobile World Live

Strategy Analytics criticises IoT revenue forecasts

06 APR 2017

The market value for IoT services is “dramatically inflated”, analysts at research company Strategy Analytics cautioned.

In a new report, the company said the global IOT opportunity for suppliers should be measured in billions of dollars rather than trillions, and argued current deployments remain limited because most are still largely in trial and development phases, despite claims the sector is now mainstream

Strategy Analytics quizzed IT decision makers across nine vertical markets in the US, UK, France and Germany in early 2017.

The research found 35 per cent of companies with IoT deployments have fewer than 100 devices connected.

Of the 70 per cent of current IoT deployments in the US, the company found these cover less than 500 devices in total, while two thirds of the businesses “spent less than $100,000 on IoT projects”.

As part of the study, the company looked into scaling IoT potential with total GDP and global IoT spend from 2015 to 2025.

Strategy Analytics estimated global IT spend will grow from $3.3 trillion to $4.8 trillion over the ten year period, while global IoT spend will hit $300 billion in 2025, up from $120 billion in 2015.

In 2025, IoT will represent 7.1 per cent of total global IT spend.

Harvey Cohen, president of Strategy Analytics said estimates placing “the IoT market value at $3 trillion or more have a credibility problem”.

“Can IoT really be bigger than the entire IT industry? 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,” he said.

Notably, Cohen did not specifically mention which forecasts he was referring to, but rival analyst firm Machina Research in 2016 stated the revenue opportunity will reach $3 trillion in 2025.

Strategy Analytics added the biggest opportunity for companies will lie in services, accounting for 64 per cent of total IoT revenue, or $219 billion by 2025.

“The opportunity for professional services is attractive for firms who are seeing enterprise software sales stagnating,” Cohen added.

 

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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