Vendors must get vertical or miss $5tn IoT opportunity

Internet of Things could help vendors reach into consumer sphere but a targeted approach is key, says IDC

The Internet of Things (IoT) represents a global opportunity that is worth almost $5tn (£3tn) annually and growing, but channel firms must tailor their offerings to vertical markets, with manufacturing and government emerging as key sectors.

That is the finding of an IDC report, which advises vendors to start addressing "this huge IT opportunity in a more realistic and valuable framework".

Scott Tiazkun, senior research analyst at IDC's Global Technology and Industry Research Organisation, said: "The Internet of Things market must be understood in terms of vertical markets because the value of IoT is based on individual use cases across all markets. Successful sales and marketing efforts by vendors will be based on understanding the most lucrative verticals that offer current growth and future potential and then creating solutions for specific use cases that address industry-specific business processes."

IDC claims that the market for IoT-related components, processes, and IT support was worth $4.8tn in 2012. This is set to expand at a compound annual growth rate of 8.8 per cent to reach a total of $7.3tn in 2017.

The market watcher singles out government, discrete manufacturing, and the consumer space as potentially fruitful markets in the short term. In the case of the latter, IDC claims the dawn of IoT will allow many IT vendors to deepen their reach into the consumer world, with the chance to run B2B2C services connecting things such as houses and cars.

Tiazkun concluded: "The IoT market will greatly impact and offer the potential for vertical-aligned businesses to improve both performance and profitability. The IoT solutions space will expand exponentially and will offer every business endless IoT-focused solutions. The initial strategy of businesses should be to avoid choosing IoT-based solutions that will solve only immediate concerns and lack staying power."