How many devices are likely to be connected to the Internet of Things (IoT) — and which industries are most likely to be affected by its growth? At its Symposium/ITxpo 2014 in Barcelona last week, Gartner offered answers.

By 2020, there will be 25 billion connected devices. And the most forceful impact will be with consumer goods, outstripping its nearest rival category of generic business goods by 250 percent.

Realities and Predictions

That consumer goods should be the top area of IoT penetration is no real surprise given the amount of investment that vendors in this space are making. But the fact that generic business goods should best the automotive industry is an interesting development.

After all, automobile manufacturers predict cars of the future will enable drivers to control their entire lives, including household and workplace applications.

Another interesting point: Whether businesses like it or not, they are going to have to follow the IoT whereever it takes them. "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 the IoT, like they’ve done with the consumerization of IT,” Gartner Vice President Jim Tully said.

IoT total services spending is expected to top $69.5 billion in 2015. By 2020 this will have quadrupled to $263 billion. Next year, there will be 4.9 billion IoT devices, up 30 percent from this year. Those devices will grow to 25 billion by 2020. Over half of the connected applications will be in consumer goods, up to 13 billion in 2020.

Gartner breaks this down further and has identified the top three verticals that will experience the greatest impact from the IoT. While the top three at the moment are manufacturing, utilities and transportation, by 2020 that will have changed again.

2014-11-15 gartner's iot predictions.jpg

Utilities will be the top vertical by 2020, with manufacturing second. 

The development of the IoT depends on the development of processors that are cheap enough to be embedded in every device and that critical point where economy of scale enables the insertion of processors into common devices appear close.

Disruptive IoT

Gartner predicts that over the next few years, this kind of connectivity will be considered standard. But this will be a disruptive event and will require a rethinking of business.

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,” Gartner VP Steve Prentice said.

Clearly it is impossible to say for certain that this is the future of the IoT. There are many things about it that are still far from clear, including when the inevitable standards emerge, how enterprise and industry will adapt, and how they will incorporate all this into their business models.

It also depends, of course, on securing the IoT and, as we have seen in the past, there are still many areas of IoT development where security has yet to arrive at a satisfaction level to ensure widespread adoption. In this respect, think how long it has taken enterprises, for example, to take to the cloud with many still dragging their heels even now.

There are also questions over the use of the IoT. Yes, it has the potential to produce vast amounts of data that offer the possibility of developing superior customer experience, or better customer engagement strategies, but even with big data analytics, there are still questions as to how useful all this information will be in practice.