If the IT universe is going to grow any further or faster than it is now, the growth will come from something other than humans, according to a new Gartner report.
By 2015, the combined global IT and telecom market will grow to about $4 trillion, while spending on IT alone will only grow at an average of about 2.2 percent per year through 2017, according to Peter Sondergaard, senior VP and global head of research at Gartner.
Companies selling products and services for the Internet of Things, on the other hand, will be pulling in $309 billion per year by 2020, half of which will come from startups and 80 percent of which will be spent on services – because “things” are cheap, but services to connect them and do something with the data are not.
Gartner has predicted the Internet of Things will add $1.9 trillion per year by 2020 by making existing processes more efficient and introducing additional sources of revenue. Increases in efficiency from better tracking of materials and components will help the manufacturing industry rake in 15 percent of the $1.9 trillion windfall, according to Sondergaard. Wearable devices to diagnose or treat diseases, sensors to detect the falls of elderly patients, and other ways to automate treatment will net the healthcare market 15 percent of the total windfall as well.
Increases in efficiency are only the first wave of potential benefit, however. The first wave of the Internet of Things will be used primarily to make businesses more efficient at what they already do, Sondergaard added: “No matter what business or service organizations deliver today, digitalization is changing it and becoming pervasive inside organizations.”
The second wave will come from companies inventing new ways to do business, or completely new industries that were impossible before the widespread digitization of “things,” according to Gartner analyst Hung Le Hong.
Predicting what will happen is difficult, because many of the businesses have yet to be invented, but it might be useful to look at trends in usage of the human part of the Internet, seeing as how it has stabilized to the point that all the exciting new developments will come from “things.”
The biggest recent wave of disruption in the business world began in about 1998, when the Web, e-commerce and an increasing number of communications methods and devices began to revolutionize the way corporate employees do their jobs, as well as the kinds of users, devices and service providers IT has to deal with on a daily basis. It also changed the economics of information by making huge volumes available to everyone at virtually no cost.
Now all that has stabilized so much that the growth in spending on technology for humans won’t be significant for a few years. And what do people do with the Internet now that it’s pervasive? According to mobile-networking vendor Sandvine’s most recent twice-annual Global internet Phenomena Report, the thing humans use the Internet for most heavily is… watching television.
In 2002, peer-to-peer filesharing made up 60 percent of all the traffic on the Web, according to Sandvine CEO Dave Caputo, in a public statement. That level dropped below 10 percent during 2013, while traffic from Netflix and YouTube rose to make up 50 percent of all Internet traffic on fixed networks in North America. Netflix alone makes up 31.6 percent of fixed-line traffic on the web, while YouTube adds another 18.6 percent.
That’s no guarantee the 30 billion or so “things” expected to be connected to the Internet by 2015 will go through an excitingly disruptive period, and then fade back into doing exactly what they would have been doing anyway. It is an indication not every one of 30 billion “things” will be executing totally new tasks: they could just end up helping people do the same old stuff.
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