6.4 billion connected 'things' will be in use during 2016

Gartner estimates that the Internet of Things (IoT) will support total services spending of $235 billion in 2016, up 22 percent from 2015. Services are dominated by the professional category (in which businesses contract with external providers in order to design, install and operate IoT systems), however connectivity services (through communications service providers) and consumer services will grow at a faster pace.

"IoT services are the real driver of value in IoT, and increasing attention is being focused on new services by end-user organisations and vendors," said Jim Tully, vice president and distinguished analyst at Gartner.

Enterprises to Bolster IoT Revenue

"Aside from connected cars, consumer uses will continue to account for the greatest number of connected things, while enterprise will account for the largest spending," said Mr. Tully. Gartner estimates that 4 billion connected things will be in use in the consumer sector in 2016, and will reach 13.5 billion in 2020 (see Table 1).

Table 1: Internet of Things Units Installed Base by Category (Millions of Units)

Category	2014	2015	2016	2020
Consumer	2,277	3,023	4,024	13,509
Business: Cross-Industry	632	815	1,092	4,408
Business: Vertical-Specific	898	1,065	1,276	2,880
Grand Total	3,807	4,902	6,392	20,797

Source: Gartner (November 2015)

In terms of hardware spending, consumer applications will amount to $546 billion in 2016, while the use of connected things in the enterprise will drive $868 billion in 2016 (see Table 2).

Table 2: Internet of Things Endpoint Spending by Category (Billions of Dollars)

Category	2014	2015	2016	2020
Consumer	257	416	546	1,534
Business: Cross-Industry	115	155	201	566
Business: Vertical-Specific	567	612	667	911
Grand Total	939	1,183	1,414	3,010

Source: Gartner (November 2015)

In the enterprise, Gartner considers two classes of connected things. The first class consists of generic or cross-industry devices that are used in multiple industries, and vertical-specific devices that are found in particular industries.

Cross-industry devices include connected light bulbs, HVAC and building management systems that are mainly deployed for purposes of cost saving. The second class includes vertical-specific devices, such as specialised equipment used in hospital operating theatres, tracking devices in container ships, and many others.

"Connected things for specialised use are currently the largest category, however, this is quickly changing with the increased use of generic devices. By 2020, cross-industry devices will dominate the number of connected things used in the enterprise," said Mr. Tully.