IDC’s Canadian IoT forecast makes the smartphone market look small

IDC Canada is projecting the market for products and services related to the Internet of Things will reach $21 billion within four years, driven by the hope among CIOs that it will boost productivity and reduce complexity, the research firm said Thursday.

Speaking at IDC Canada’s 30th anniversary celebration in downtown Toronto, IDC Canada group vice-president Tony Olvet unveiled the firm’s first major Canadian Internet of Things (IoT) report, which details a market worth $5.6 billion today. Olvet told the room of mostly local technology vendors that IoT revenue will grow at 30 percent CAGR, providing the business case for projects is crystal-clear.

Tony Olvet Internet of Things IDC Canada
Tony Olvet, IDC Canada

Olvet admitted that conducting a market-sizing report for IoT was more complicated than other areas of IT, given the number of components involved. IDC defines IoT as communication among endpoints enabled by IP connectivity, locally or globally, without human intervention. The report suggests that there are 28 million autonomous, intelligent and embedded systems or units in Canada today. By 2018, IDC expects that number to reach 114 million. In comparison, IDC estimates there have been shipments of about 23 million smartphones.

“We’re not talking about SIMs or sensors,” he said, though those could become part of the equation eventually. “There are lots of different players. It’s a fragmented constellation of markets.”

To create the report, Olvet said IDC had to consider everything from shipments of IT products to miles of roadways, the number of Canadian households and a host of other factors. “We thought about (how the industry is) tagging cows.”

The IoT may play out a bit different in Canada than elsewhere, Olvet added, because at the moment a lot of the activity is being driven within large enterprises, whereas this is more a country of small businesses and mid-market firms. For CIOs that want to use the IoT to further business objectives, Olvet had a few key recommendations:

Look at how to improve existing processes first before tackling the more difficult tasks. Asset tracking in retail, for example, may be a good way of addressing cost and efficiency issues.

Identify your industry’s “smart meter.” Olvet pointed to the government’s use of smart meters as a great case study of early IoT deployments. Although most people may not know all the politics behind the project, Olvet suggested smart meters helped municipalities avoid brownouts and provided monthly savings to consumers. CIOs should figure out how those objectives could translate to their firm’s sector or customers.

Foster relationships with IT and ops. Although collaboration between IT departments and other areas of the business will obviously be critical, Olvet said the IoT will also require alignment between tech vendors and those companies involved in operations. Work that’s already been going on between Cisco and Rockwell automation are a good example of this. “We’re talking about the plumbing — literally the plumbing — and how it will relate to the IT infrastructure,” he said.

Though much of the work in IoT will be invisible to the naked eye, that behind-the-scenes work needs to be as simple as possible, Olvet said. “The Internet of Things should not increase complexity,” he said, “although that may be easier said than done.”

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