By 2021, global IoT spending is expected to total nearly $1.4 trillion, led by enterprise investments IoT hardware, software, services, and connectivity.
Breaking down use cases, IDC says manufacturing, freight monitoring and production asset management will attract the largest investments. Smart grid technologies for electricity, gas, and water, and smart building technologies are also expected to see significant investment gains this year.
Long tail, investments in smart home technologies will jump over the next five years, as well as airport facilities automation, electric vehicle charging, and in-store contextual marketing.
From a technology perspective, IDC says hardware will garner the most spending throughout the forecast, followed by services, software, and connectivity. But while hardware spending will nearly double over the forecast timeframe, its growth is the slowest out of all IoT technology groups.
Software and services spending will grow the fastest with application software representing more than half of all IoT software investments. Hardware spend will focus on modules and sensors that connect end points to networks, IDC says.
"The discussion about IoT has shifted away from the number of devices connected," said Carrie MacGillivray, VP of Internet of Things and mobility at IDC. "The true value of IoT is being realized when the software and services come together to enable the capture, interpretation, and action on data produced by IoT endpoints.
In terms of industries, manufacturing and transportation remain the highest spenders, reaching $183 billion and $85 billion, respectively. Utilities comes in a close third with expected spending of $66 billion.