The IoT services market is one of the largest due to revenue generation from the rapidly accumulating installed base of IoT devices.

Edward Gately, Senior News Editor

December 5, 2017

2 Min Read

The market for Internet of Things (IoT) services will grow at a rapid compound annual growth rate (CAGR) of nearly 30 percent through 2021 as businesses continue to shift products toward the network-based, as-a-service business model.

That’s according to findings outlined in a VDC Research study titled “The Global Market for IoT Services.” The market is one of the largest due to revenue generation from the rapidly accumulating installed base of IoT devices, rather than just yearly unit shipments. Every connected system adds to the potential pool of devices that can use or consume IoT services over the useful life of the system.

Vendors in the market include Aeris, Amazon Web Services (AWS), BlackBerry, Cloudflare, Dell EMC, Delphi, Eurotech, General Electric, Google, Harman (Samsung), Microsoft, IBM, Intel, PTC, SAP, Sentrian, Siemens, Telit and Wind River.

Roy Murdock, IoT and embedded technology analyst at VDC, tells Channel Partners the IT and embedded markets are “meeting in the middle” as both technologies are needed to enable IoT.


VDC’s Roy Murdock

“Nowhere is this more apparent than the IoT services market,” he said. “Embedded players are using their traditional strength to supply remote device monitoring, control and updating services, while large IT vendors are using their data centers to provide storage, networking and analytics services. Growth of the IT channel depends on embedded vendors and vice versa.”

The move away from traditional licensing to service-based business models is itself an emerging trend, according to VDC. Other trends include a shift away from basic services towards higher value-added analytics and security services. The automotive market will grow the fastest as the high level of investment increases the power of the hardware, software and services needed for the next generation of smart vehicles.

IoT services are central to many organizations’ decisions to invest in IoT capabilities, according to the research. Finding new strategic opportunities or service-oriented business models was top of mind among engineering managers surveyed by VDC. The usual factors – price, competition and time-to-market – have taken a back seat in recent years, as managers look to transform products and businesses at a higher level through service-oriented business models.

“As many IT vendors face commoditization in mature markets, offering hardware and software as-a-service is a key way that vendors can and are reinventing themselves to better serve their customers,” Murdock said. “Additionally, IoT services allow IT vendors to generate stable revenue over time, rather than staking their financial well-being on the sometimes volatile life cycle of traditional, sell-once products.”

Read more about:


About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

Free Newsletters for the Channel
Register for Your Free Newsletter Now

You May Also Like