By | November 14, 2023
Worldwide spending on the Internet of Things is expected to exceed $1 trillion by 2026, according to a new IDC spending guide

NEEDHAM, Mass., June 20, 2023 – Worldwide Internet of Things (IoT) spending is projected to reach $805.7 billion in 2023, up 10.6% from 2022, according to a new International Data Corporation (IDC) Worldwide Internet of Things Spending Guide. Investments in the IoT ecosystem are expected to exceed $1 trillion by 2026 at a compound annual growth rate (CAGR) of 10.4% during the forecast period 2023-2027.

“The last few years have shown that connecting to a digital infrastructure is no longer a luxury, but a necessity,” said Carlos M. González, research director of the Internet of Things at IDC. “For organizations to excel in data-driven operations, investing in IoT projects is essential. Connecting devices to data networks to gather insights, expand operations and increase performance are the hallmarks of executing an IoT ecosystem.”

Discrete and process manufacturing are the industries that will see the largest investment in IoT solutions in 2023 and throughout the forecast period, accounting for more than a third of all IoT spending worldwide. Professional Services, Utilities and Retail are the second largest industries in terms of total IoT spending with roughly 25% of the global total. Government/local government and telecommunications will deliver the fastest spending growth over the five-year forecast with CAGRs of 12.0% and 11.7% respectively.

IoT investments are an important building block to support an increasingly digital and distributed organizational footprint. Most of these investments seek solutions that can help organizations achieve a specific business goal or customer challenge, such as cost savings or supply chain efficiency. As such, use cases are the focus of most IoT investment plans.

The two IoT use cases that will see the most investment in 2023 are both closely tied to the manufacturing industry: Manufacturing Operations ($73.0 billion) and Production Asset Management ($68.2 billion). The next largest use cases – Inventory Intelligence ($37.6 billion), Smart Grid (Electricity) ($36.9 billion) and Supply Chain Resilience ($31.6 billion) – will benefit from strong investment from retail and utilities industries. The use cases that will experience the fastest spending growth represent the diverse application of IoT technologies – Electric Vehicle Charging (30.9% CAGR), Next Generation Loss Prevention (14.5% CAGR), Agriculture Field Monitoring (13.9% CAGR ) and Connected Vending and Cabinets (13.8% CAGR).

“Updates to the IoT use case classification in this edition of the IoT Spending Guide reflect the evolving investment goals of businesses for digital transformation. Thematically, increased investment in goods manufacturing and supply chains as a result of the COVID-19 pandemic and global responses that caused massive business and societal disruption are evident in the new use cases. These production and supply chain-related use cases can be seen in the discrete manufacturing, process manufacturing, retail and transportation sectors,” said Marcus Torchia, research director of IDC’s Data & Analytics Group. “Meanwhile, digital business investment is increasing in other industries such as the resource industry. For example, IoT is helping to improve processes in the upstream supply chain in agriculture, such as growing, harvesting and delivering higher quality products to market.”

This edition of the IoT Spending Guide also includes an overlay forecast for Video Analytics intended to provide high-level insight into a broadly assumed use case (ie found in most or all business industries). Video analytics refers to the use of artificial intelligence (AI) and other advanced algorithms to recognize, detect, and analyze live or stored video feeds in a variety of uses, including business analytics, security surveillance, and other rapidly evolving adaptations of this technology. These uses are found in many environments (eg, business analytics in manufacturing and retail, in government for managing crowds and traffic congestion, and broadly for security monitoring). Video analytics requires IP network-capable cameras to support the advanced software whether embedded in hardware or provided by third-party vendors.

IDC expects spending on Video Analytics solutions across all industries to be more than $23.5 billion this year. Future editions of the IoT Spending Guide will include additional widely adopted use cases, such as smart buildings.

From a technology perspective, IoT services will be the largest area of ​​spending in 2023 and until the end of the forecast, accounting for nearly 40% of all IoT spending worldwide. Hardware spending is the second largest technology category, dominated by module/sensor purchases. Software will be the fastest growing technology category with a five-year CAGR of 11.0% and a focus on application and analytics software purchases.

Western Europe, the US and China will account for more than half of all IoT spending throughout the forecast. Although Western Europe and the US currently have similar spending levels, Western Europe will extend its lead with an 11.0% CAGR over the 2023-2027 forecast, compared to an 8.0% CAGR for the US. China’s IoT spending is expected to surpass the US by the end of the forecast due to its 13.2% CAGR.

The Worldwide Internet of Things Spending Guide (V1 2023) forecasts IoT spending for 18 technology categories and 70 named use cases (87 including sub-use cases) across 19 industries in nine regions and 53 countries. The spending guide also includes a forecast for IoT connectivity for mobile networks, low-power Wide Area Networks and other connectivity (eg wired, satellite). This gives technology buyers and vendors a tool to understand how the plethora of IoT use cases require multiple connectivity types, driven by different expectations in terms of latency, bandwidth and data rate.

About IDC Spending Guides

IDC’s spending guides provide a detailed view of key technology markets from a regional, vertical industry, use case, buyer and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.

For more information on IDC’s spending guides, contact Marcus Torchia at

Click here to learn more about IDC’s full suite of data products and how you can leverage them to grow your business.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services and events for the information technology, telecommunications and consumer technology markets. With more than 1,300 analysts worldwide, IDC provides global, regional and local expertise in technology, IT benchmarking and sourcing, as well as industry opportunities and trends in over 110 countries. IDC’s analysis and insight help IT professionals, business leaders and the investment world make fact-based technology decisions and achieve their most important business goals. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world’s leading technology media, data and marketing services company. To learn more about IDC, visit Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC blog for industry news and insights.


#Worldwide #spending #Internet #expected #exceed #trillion #IDC #spending #guide

Leave a Reply

Your email address will not be published. Required fields are marked *