Internet of things is not an entirely-new development. Industrial and process automation spending already exists, using sensors, monitoring and control platforms and analytics that one day will be subsumed or augmented by IoT. But it is a good place to start.
In a broad sense, all existing industrial and process automation, monitoring, robotics might be counted in the existing “IoT” basket, even if the sensor systems do not actually use internet protocol, cloud computing or edge computing. But that creates a natural upper limit to the IoT market, if it describes all spending on systems that monitor processes.
A couple of obvious caveats are that such forecasts necessarily must include all enterprise spending for processes and systems that might eventually be considered part of IoT, including all process control systems, of any type.
So one fundamental assumption is that perhaps all existing forecasts are too optimistic, as some present spending will eventually be counted in the “IoT” basket. In that sense, some IoT spending will simply be a replacement for legacy spending, as much 5G subscription spending will simply replace existing 4G spending.
Over time, most control processes might switch to use of internet protocol for communications, digital sensors for collecting information and cloud, multi-cloud, edge or private data centers. In the interim, we might assume all estimates of IoT include the value of existing automation platforms, whether they are formally IoT or not, as replacement will almost-certainly move those expenditures into the IoT category.
Industrial sensors already are used in electrical power, natural gas utility, automotive and manufacturing settings, to measure pressure, current, temperature and flow, for example. By some accounts, $16 billion industrial sensors are sold every year.
Industrial wireless sensors might represent $3 billion to $4 billion in annual sales already. Optical sensors might generate $16 billion in annual sales, of which perhaps $3 billion to $4 billion already is used by robotics systems.
The global automation market, including factory automation, process automation, industrial software, 3D printing, artificial intelligence and drones is someplace between $150 billion and $200 billion globally, and already would include the value of sensor purchases.
Some estimate that hardware represents 20 percent of the cost of any initiative. Assume IoT hardware represents about 15 percent of all hardware used in an implementation. That implies IoT hardware could represent $23 billion to $30 billion in annual purchases.
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