Connected Devices: How Big Can the Market Get?
It’s hard not to get carried away by the excitement of connected devices these days. With more devices being connected at all levels and across multiple market segments, it’s not uncommon to see grandiose numbers emerging regarding just how big this market can become.
The analyst firms aren’t alone in making such projections; carriers, hardware providers, and software companies alike are all sharing in the excitement regarding the possibilities. While it’s difficult to accurately assess how this market will ultimately shake out, we can however examine some factors that can impact its direction.
Harbor Research, www.harborresearch.com, San Francisco, Calif., points out challenges in realizing such growth, including hurdles associated with adopting new business models; what it calls “complex value creation ecosystems” requiring businesses to relate in new and different ways; and new modes of product, service, and systems innovation that are not widely adopted today.
Harbor itself indicates the number of intelligent devices being connected to the Internet in 2010 will reach 10% of the volume of IT and telephony devices and will grow at three times the pace of traditional IT and telephony systems throughout the next several years.
"Many IT equipment suppliers and wireless carriers have made recent pronouncements concerning the scale of the Internet of Things," says Glen Allmendinger, president, Harbor Research. "While we don't question that this will certainly happen, there are many structural elements that need to be in place to support such growth."
He suggests we have entered an era where people, businesses, and social organizations are beginning to understand the impact that connected devices will have on society. He says, “In the not too distant future, hundreds of millions, then billions, of individuals and businesses, with potentially billions of smart, communicating devices, will stretch the boundaries of today's business and social systems and create the potential to change the way we work, learn, entertain, and innovate ... we call this Smart Business.”
The factors and impacts are examined more closely in Harbor’s new report, The Emergence of Smart Business, a forecast on M2M and smart systems.
“It is clear from these forecasts that the market is now poised for higher growth and mass adoption – there is substantially greater recognition of the technology capabilities and the potential benefits of connecting devices to the Internet,” says Allmendinger. “The market will begin now to move forward into more complex higher value applications where the need for new business models and new modes of systems design innovation are much more evident."