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IoT Services Revenue will Reach $235 Billion in 2016

Just imagine, 6.4 billion 'connected things' will be in use worldwide in 2016 -- that's up 30 percent from 2015 -- and will reach 20.8 billion by 2020, according to the latest worldwide market study by Gartner, Inc.

In 2016, 5.5 million new things will get connected to the public internet every day. Gartner now estimates that the Internet of Things (IoT) will support total services spending of $235 billion in 2016 -- that's up by 22 percent from 2015.

Services are dominated by the professional category -- in which businesses contract with external providers to design, install and operate their IoT systems. However, connectivity services -- offered through telecom 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.

Consumer and Enterprise Apps Drive 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.

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.

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 industry-specific devices -- such as specialized equipment used in hospital operating rooms, tracking devices in container ships, and many other unique applications.

"Connected things for specialized 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.

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