Report: 4.9 billion connected “things” will be in use next year

According to the latest report from Gartner, the Internet of Things (IoT) is forecasted to reach 25 billion connected things by 2020, with just shy of 5 billion installed objects to be in use next year — up from 0.9 billion just five years ago. That’s nearly three Internet-enabled devices for every person on the planet over the next six years!

The analysts recently listed the Internet of Things and smart machines among the top 10 strategic technology trends for 2015. This disruptive technology has become a powerful force for business transformation, and its impact will be felt across all industries and all areas of society. Gartner Vice President Jim Tully believes that this shift has been spurred by what he calls a “nexus of forces.”

“The digital shift instigated by the Nexus of Forces (cloud, mobile, social and information), and boosted by IoT, threatens many existing businesses. They have no choice but to pursue IoT, like they’ve done with the consumerization of IT,”  said Tully.

As a result, we can expect this expansion to significantly enhance the economic impact of the IoT as consumers, businesses, city authorities, hospitals and many other entities find new ways in which to exploit these next-gen, embedded things. In fact, Gartner estimates that the Internet of Things will support total services spending of $69.5 billion in 2015 and $263 billion by 2020.

In its report, Gartner anticipates apps will drive the number of connected objects, while the enterprise will account for most of the revenue. The research firm also estimates that 2.9 billion connected things will be in use in the consumer sector in 2015 and will reach over 13 billion in 2020. Furthermore, the automotive sector will show the highest growth rate at 96% in 2015.

Gartner notes that while connected devices — such as automated teller machines and airline check-in machines — already exist, new and novel ones will arise. This next batch of web-enabled devices will consist of once-ordinary objects reinvented with digital sensing, computing and communications capabilities, many of which will be given new “powers” with Atmel microcontrollers (MCUs).

The analysts also highlight that manufacturing, utilities and transportation will be among the top three verticals using IoT in 2015 – all together they will have 736 million connected things in use. By 2020, the ranking will change with utilities in the top spot, followed by both manufacturing and government, totaling 1.7 billion IoT units installed.

“Government will take the No. 3 spot as it invests in smart street and area lighting for energy saving reasons,” shared Tully. “Utilities will move to the No. 1 position because of investment in smart meters.”

It is likely that within the next few years, some level of built-in intelligence and connectivity will be regarded as standard, and this will rapidly filter down to mainstream products and services. However, Gartner Vice President Steve Prentice urges that “CIOs must understand that the most disruptive impact and competitive threats — and, equally, the greatest competitive opportunities — arise not from simply digitalizing a product or service, but from creating a new business model and value proposition.”

The IoT showcases the tight linkages between information security, information technology security, operational technology security and physical security like never before. As Gartner points out, executives will face a decision over “the future of security in their enterprise and who governs, manages and operates it.” Gartner said that by the end of 2017, more than one in five organisations will have digital security services devoted to protecting business initiatives using devices and services in IoT.

“The number of connected intelligent devices will continue to grow exponentially, giving ’smart things’ the ability to sense, interpret, communicate and negotiate, and effectively have a digital ‘voice’,” concluded Mr. Prentice. “CIOs must look for opportunities to create new services, usage scenarios and business models based on this growth.”

As the Internet of Things continues to be heralded as the next major area of growth, you will find Atmel smack dab in the middle of this futuristic trend. We power the edge nodes that form the link between individual devices and the gateways that connect to the cloud. We supply Makers and designers with all the basic building blocks – from embedded processing and connectivity to sensors, security, and software – and tie it all together with a rich ecosystem of design tools and development partners, so it’s simple to leverage our expertise.

Those interested in delving deeper into this topic can access Gartner’s entire study here.