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The IoT market continues to stabilize, with the overall market growing at a moderate accelerating CAGR of 24.8%

4Q18 Commercial Internet of Things Market Forecast infographic

TBR projects total commercial Internet of Things (IoT) market revenue will increase from $456.1 billion in 2019 to $1.4 trillion in 2024, a CAGR of 24.8%.

Topics covered in TBR’s Commercial IoT Market Forecast 2019-2024 include deeper examinations, such as trends, drivers and inhibitors of the seven technology segments we track (e.g., cloud services, IT services, ICT infrastructure, and connectivity), the 10 vertical groupings we cover (e.g., public sector, healthcare, manufacturing and logistics), and four geographies (i.e., APAC, EMEA, North America and Latin America).

In addition to a more in-depth examination of the aforementioned topics, we also delve into the rise of “bundles” and “packaged solutions,” and how vendor partnering is lowering cost of sales for IoT implementations.

For additional information about this research or to arrange a one-on-one analyst briefing, please contact Dan Demers at +1 603.929.1166 or [email protected].

The IoT market continues to stabilize, with the overall market growing at a moderate accelerating CAGR of 24.8%

TBR projects total commercial Internet of Things (IoT) market revenue will increase from $456.1 billion in 2019 to $1.4 trillion in 2024, a CAGR of 24.8%.

It is important to remember that IoT is a technique for applying technology components, not a technology itself, which leads to certain drivers and inhibitors. Because it is a technique, IoT has an unlimited shelf life. Vendors that invest now and solidify their IoT go-to-market strategy will benefit in the long run. Methods for connecting equipment and solutioning may evolve, but the overarching technique is not going away. However, IoT growth is limited by the components and solutioning that compose the technique, including capabilities, standards and cost. This leads the numerous submarkets and sub-technologies of the IoT ecosystem to experience varied growth.

IoT revenue will accelerate as technological capabilities and standards mature and common solutions appear, culminating in lower cost and complexity.

Graph showing commercial iot market forecast alternative market performance scenarios 2019-2024

TBR believes an emerging growth accelerator is the fact that IoT offerings have evolved from the initial DIY stage to easily integrated components to component kits to, finally, almost complete solutions. At each point in this evolution, IoT becomes less expensive, less burdensome and less risky to customers, while still delivering business benefits. This greatly broadens the market, resulting in market growth and revenue growth for vendors that participate in this evolution.

However, customers remain concerned with the cost of IoT solutions, including the expense associated with transmitting, processing and storing data. The amount of data stored increases as IoT projects remain in operation, and a thoughtful data collection and storage policy is key to maintaining positive ROI.

NFV/SDN prepares operators to support 5G-era use cases

Infographic explaining how nfv and sdnwill prepare operators to support 5G-era use casesOperators are under pressure to invest in these technologies

Operators will further adoption of virtualized network solutions by capitalizing on 5G use cases and strengthening security capabilities. Integrating NFV and SDN technologies will enable operators to more effectively support network technologies that will become prevalent in the 5G era, including network slicing and edge computing, which will play a pivotal role in supporting 5G use cases such as advanced Internet of Things (IoT). The flexibility and agility of network slicing will enable operators to remove unnecessary functionality (e.g., sunsetting a noncore service) while launching services on command. Edge computing will allow operators to support 5G use cases that require ultra-low latency, such as augmented reality (AR)/virtual reality (VR).

Operators are under pressure to invest in NFV and SDN to reduce total capex and opex spend as well as introduce new services and stay competitive as they prepare to offer 5G services and search for new network use cases. The flexibility and scalability offered by NFV and SDN is particularly appealing to operator enterprise customers, which are expanding their operations and are undergoing digital transformation initiatives such as utilizing multicloud environments, incorporating IoT solutions, and integrating digital customer service and sales portals. Software-mediated network services are enabling businesses to deploy applications and provide connectivity to new branches more quickly, which is particularly important to customers in verticals that frequently add new locations, such as retail.

The shift to software-defined network architectures is extremely disruptive to the vendor community. Incumbent network vendors are under increasing pressure to move up the network value chain, from hardware to software and software-related services. They are increasingly disrupted by the adoption of white-box hardware and the utilization of ODMs as operators search for avenues to reduce network costs. Deploying white boxes provides significant cost savings for operators as well as greater flexibility by allowing carriers to deploy the most appropriate virtual network functions for their environments without being limited by the constraints of propriety hardware. Though the ODM threat has not manifested in the telecom operator customer segment to the extent it has in the webscale segment, incumbent vendors must remain on alert and attempt to mitigate this threat. TBR believes the best course of action is for vendors to embrace the movement of value in the network from the hardware layer to the software layer. This could include embracing open-source code and layering in proprietary software to differentiate. For most incumbents, scaling quickly through acquisition is preferable.

For more information, contact Senior Analyst Michael Soper at [email protected].

NFV/SDN prepares operators to support 5G era use cases and helps drive network efficiencies

According to TBR’s 3Q18 NFV/SDN Telecom Market Landscape, operators will further adoption of virtualized network solutions by capitalizing on 5G use cases and strengthening security capabilities. Integrating NFV and SDN technologies will enable operators to more effectively support network technologies that will become prevalent in the 5G era, including network slicing and edge computing, which will play a pivotal role in supporting 5G use cases such as advanced Internet of Things (IoT).

Operators are under pressure to invest in NFV and SDN to reduce total capex and opex spend as well as introduce new services and stay competitive as they prepare to offer 5G services and search for new network use cases. The shift to software-defined network architectures is extremely disruptive to the vendor community.

Graph showing total NFV/SDN spend by capex and external opex for 2017 through 2022

Incumbent network vendors are under increasing pressure to move up the network value chain, from hardware to software and software-related services. They are increasingly disrupted by the adoption of white-box hardware and the utilization of ODMs as operators search for avenues to reduce network costs. Deploying white boxes provides significant cost savings for operators as well as greater flexibility by allowing carriers to deploy the most appropriate virtual network functions for their environments without being limited by the constraints of propriety hardware. Though the ODM threat has not manifested in the telecom operator customer segment to the extent it has in the webscale segment, incumbent vendors must remain on alert and attempt to mitigate this threat.

The NFV/SDN Telecom Market Landscape includes key findings, market size, customer adoption, operator positioning and strategies, geographic adoption, vendor positioning and strategies, and acquisition and alliance strategies and opportunities.

For additional information about this research or to arrange a one-on-one analyst briefing, please contact Dan Demers at +1 603.929.1166 or [email protected].