Steady commercial and consumer adoption will drive worldwide spending on the IoT to $1.1 trillion (€0.97 trillion) in 2023.
IDC's new IoT spending guide says this represents a compound annual growth rate (CAGR) of 12.6%.
The three commercial industries expected to spend the most on IoT solutions throughout the forecast are discrete manufacturing, process manufacturing and transportation.
Together, these three industries will account for nearly a third of total worldwide spend in 2023.
The primary IoT use case for the two manufacturing industries is expected to be manufacturing operations while transportation industry spending will largely go toward freight monitoring.
The consumer market is tipped to be the second largest source of IoT spending in 2019, led by smart home and connected vehicle use cases.
With the fastest five-year growth rate across all industries (16.8% CAGR), the consumer market is forecast to overtake discrete manufacturing to become the largest source of IoT spending by 2023.
IDC predicts IoT services will be the largest technology category through to the end of the forecast after overtaking hardware spending this year. Together, these two categories account for roughly two-thirds of all IoT spending.
Services spending includes traditional IT and installation services as well as ongoing ‘as-a-service’ offerings.
Two additional trends within the IoT software category include the dominance of vertical industry IoT platforms and the rise of cloud deployments for IoT software. More than three-quarters of all spending on IoT platform software is forecast to go towards software packages that integrate and support devices, applications, data schemas and standards of a single industry.
Firms are increasingly deploying their IoT software, including applications, analytics software and IoT platforms, in the cloud.
By the end of the forecast period, nearly one third of IoT software spending is expected to go towards public cloud deployments, compared to less than 20% spent on cloud deployments in 2018.
Carrie MacGillivray, group vice president, Internet of Things, 5G, and Mobility at IDC, said, "Spending on IoT deployments continues with good momentum and is expected to be $726 billion (€643 billion) worldwide this year.
“While organisations are investing in hardware, software and services to support their IoT initiatives, their next challenge is finding solutions that help them to manage, process and analyse the data being generated from all these connected things."