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The Internet of Things (IoT) represents a new construct in the information and communications technology (ICT) world that is occupying the minds of IT vendors, service providers, and systems integrators as it represents huge potential for new streams of revenue and new customers.

The ongoing development of smart cities, cars, and houses; enhanced connectivity infrastructure and increasingly connected culture are just some key enablers to the rise of IoT. In fact, Internet of Things is not something that is coming, but something that has already been partly implemented, but will continue to grow at a rather rapid pace.

International Data Corporation (IDC) has looked at the components, processes, and supporting IT and connectivity for the Internet of Things and expects IoT technology and services spending to generate global revenues of $4.8 trillion in 2012 and $8.9 trillion by 2020, growing at a compound annual rate (CAGR) of 7.9%.

"The momentum of the Internet of Things is driven by a number of factors. There is no doubt that business and consumer demand exists and will continue to expand for IoT solutions. I expect the current IoT use cases are just the tip of the iceberg," said Vernon Turner, senior vice president of IDC's enterprise infrastructure, consumer, network, telecom, and sustainability research.

Even though there is growing demand for the IoT, there are still several factors inhibiting growth of this market. This is not to say that they cannot be overcome, but at present, they are hurdles that both vendors and enterprises will have to overcome to make IoT a reality. Some of these challenges are on the supply side, including lack of standards, global scalability, and a nascent ecosystem for application development. On the demand side, the challenges include lack of awareness and other IT/mobility priorities.

Despite these challenges, IDC expects the installed base of the Internet of Things will be approximately 212 billion "things" globally by the end of 2020. This will include 30.1 billion installed "connected (autonomous) things" in 2020. This is largely driven by intelligent systems that will be installed and collecting data – across both consumer and enterprise applications – by the end of the forecast period.

"It is important to remember that while the market for the Internet of Things is still in its infancy, there is a long legacy of autonomous wired connected things. The enabler for increased growth over the forecast period is the pervasiveness of wireless connectivity and ubiquitous access to the Internet regardless of location," said Carrie MacGillivray, program vice president of mobile services, M2M & network infrastructure at IDC.

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