IoT revenue: state of the market 2020
The global Internet of Things (IoT) market will be worth $900 billion in revenue by 2025 - an almost threefold increase on 2019. However, we expect the revenue opportunity to contract by $200 billion compared to our previous forecast, on account of Covid-19.
Enterprises have had to readjust their operations in response to Covid-19, focusing more on remote access and automation. This places an emphasis on software tools and cloud in the short term, and the need to digitise operations over the long term. As such, the bulk of IoT revenue is generated by applications, platforms and services that exploit the insights generated by data. Growth in 'useful' data and advances in AI and machine learning will continue to increase the applicability and value of data analytics. Meanwhile, we forecast professional services to be hit the hardest by Covid-19. As economic growth returns, however, we expect IoT professional services revenue growth to return to pre-Covid-19 levels; systems integration will be the main contributor to revenue. Although connectivity revenue will grow over the period, it will only account for 5% of the total IoT revenue opportunity by 2025. Operators have been expanding their capabilities beyond connectivity to capture a larger proportion of the overall market.
The accompanying report highlights the key drivers of market growth and delves into our thinking behind the forecasts presented in the Excel file.