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Enterprise driving IoT hardware and services spend

In 2016, 5.5 million new ‘things’ will get connected to the internet of things every day, with 6.4 billion connected things in use worldwide – a 30% increase on 2015.

Gartner says those connected things will help propel internet of things services spending to US$235 billion next year, up 22% from this year.

The analyst firm says services are dominated by the professional category, in which business contract external suppliers to design, install and operate IoT systems, however connectivity services through communications service providers, and consumer services will grow at a faster pace.

Jim Tully, Gartner vice president and distinguished analyst, says IoT services are the real driver of value in IoT and increasing attention is being focused on new services by end-user organisations and vendors.

Tully says the enterprise will account for the largest IoT spending, with enterprise IoT hardware spend of $868 billion in 2016.

In the enterprise, Gartner considers two classes of connected things: generic or cross-industry devices that are used in multiple industries, and vertical-specific devices that are found in particular industries.

Cross-industry devices include connected light bulbs, HVAC and building management systems that are mainly deployed for purposes of cost saving, while vertical-specific devices, include specialised equipment used in hospital operating theatres, tracking devices in container ships and many others.

"Connected things for specialised use are currently the largest category, however, this is quickly changing with the increased use of generic devices,” Tully says.

“By 2020, cross-industry devices will dominate the number of connected things used in the enterprise,” he adds.

While enterprise will account for the largest spend, Gartner says aside from connected cars it will be consumer uses which will continue to account for the greatest number of connected things.

Gartner estimates that 4 billion connected things will be in use in the consumer sector in 2016, and will reach 13.5 billion in 2020, with hardware spend for consumer applications amounting to $546 billion in 2016.