Report: IoT to dominate connected device landscape by 2021

Machine-to-machine devices will hit a milestone by 2021, accounting for more than half of connected devices, according to Cisco's 2017 Visual Networking Index.
Written by Stephanie Condon, Senior Writer

The so-called Internet of Things will hit a major milestone in 2021, according to a new report on global mobile and fixed IP traffic growth. By then, according to Cisco's annual Visual Networking Index, machine-to-machine (M2M) connections that support IoT applications will account for more than half of the world's 27.1 billion devices and connections.

"While there is and has been a lot of hype around the internet of things, it is definitely real," Thomas Barnett, Jr., director of thought leadership in Cisco Systems' SP marketing group, told ZDNet. "We're seeing that in our own lives every day."


M2M growth rates are in the double digits for just about every vertical, from smart home devices and smart workplace tools to connected cars and connected health tools. Meanwhile, the Cisco VNI looks only at devices that touch IP networks, excluding devices connected via bluetooth or near field communications.


By 2021, Cisco projects, the connected home vertical will account for 46 percent of total M2M connections. Connected health will show the fastest growth, with a 30 percent CAGR. Connected car and connected cities are close behind at 29 percent.

In North America, the average household will have an average of 23 devices, including 13 machine-to-machine connections. In the APAC region, the fastest M2M growth will come in the connected car segment, while in Latin America and the Middle East the fastest growth will come in the connected cities segment.

The projections "speak to the fact this is not only a developed region phenomenon, it is a global phenomenon," Cisco analyst Shruti Jain said to ZDNet.

While just about all segments are expected to grow quickly, the dominance of connected home devices makes sense, given the already-established connections built into the home, Barnett said.

"It's almost a tailor-made environment to begin to extend connectivity," he said. "When we look at connected cities, the potential there is huge, but regulatory issues need to be met," along with higher technical standards in terms of reliance.


As M2M devices -- machines that interact with each other rather than a human -- proliferate, the use of PCs is diminishing. While PCs accounted for nearly half of IP traffic in 2016, they should account for a quarter of IP traffic by 2021. M2M devices will still account for a small fraction of IP traffic but will more than double its share from 2 percent in 2016 to 5 percent in 2021. The greatest share of IP traffic in 2021 will come from smartphones, at 33 percent.

Meanwhile, the VNI finds there will be 1.3 billion internet users by 2021, totaling nearly 60 percent of the population. In North America, that figure rises to 88 percent. Global IP traffic will increase 3-fold from 2016 to 2021, from 96 exabytes a month to 278 exabytes a month. Middle East and Africa will show the highest growth rate at 42 percent, while APAC will generate 39 percent of all IP traffic by 2021.

By 2021, nearly half (48 percent) of total devices and connections will be video capable. As many as 11 percent of M2M connections are expected to have video capability. Video viewing will make up 82 percent of all IP traffic, and live video will increase 15-fold, accounting for 13 percent of all internet video traffic. VR/AR traffic will increase 20-fold but will only account for 1 percent of all entertainment traffic.

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