Executive Briefings

The IoT Market Is Huge, But Is It THAT Huge?

Over-the-top headlines and estimates of the size of the IoT market create more confusion and skepticism about hype than a real understanding of how big the market really is. There needs to be a framework for understanding IoT market size.

The IoT Market Is Huge, But Is It THAT Huge?

"Cisco Pegs Internet of Things as $19 Trillion Market" … that was the big bold headline of a Bloomberg article last year. Unfortunately, the article didn't explain that this was an estimate of value realized, not revenue of IoT solution providers. More egregiously, the article failed to mention that this estimate was the total over the next 10 years, not an annual figure as most people would assume if not told otherwise. It may have made for a sensational headline, but a figure like $19tr (when not properly explained) only serves to create confusion and reinforce skepticism about the hype.

We see other figures touted, such as Gartner’s prediction that the IoT Market will be $300B in 2020, IDC’s forecast that the IoT market will reach $7.1tr by 2020, and GE’s estimate that the Industrial IoT will add $15tr of value by 2030. There are dozens of other predictions. How is it that these estimates vary so wildly and how can we make sense of them? It turns out that sizing IoT markets is not such a simple exercise and the actual numbers you come up with can vary by orders of magnitude, depending on what you are including and how you are measuring it. In order to really understand the size of the IoT market, first we have to understand what is being counted. At the highest level, there are three levels on which to view the market size.

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"Cisco Pegs Internet of Things as $19 Trillion Market" … that was the big bold headline of a Bloomberg article last year. Unfortunately, the article didn't explain that this was an estimate of value realized, not revenue of IoT solution providers. More egregiously, the article failed to mention that this estimate was the total over the next 10 years, not an annual figure as most people would assume if not told otherwise. It may have made for a sensational headline, but a figure like $19tr (when not properly explained) only serves to create confusion and reinforce skepticism about the hype.

We see other figures touted, such as Gartner’s prediction that the IoT Market will be $300B in 2020, IDC’s forecast that the IoT market will reach $7.1tr by 2020, and GE’s estimate that the Industrial IoT will add $15tr of value by 2030. There are dozens of other predictions. How is it that these estimates vary so wildly and how can we make sense of them? It turns out that sizing IoT markets is not such a simple exercise and the actual numbers you come up with can vary by orders of magnitude, depending on what you are including and how you are measuring it. In order to really understand the size of the IoT market, first we have to understand what is being counted. At the highest level, there are three levels on which to view the market size.

Read Full Article

The IoT Market Is Huge, But Is It THAT Huge?