The Internet of Things Is Expected To Generate a $3.88 Trillion in Potential Value for Global Manufacturers

IHS Report Forecasts Tremendous Growth in IP-Addressable Devices as Manufacturers, Industrial Operators Seek To Capture Internet of Things Value

IHS estimates that the capital expenditure for industrial automation is $3.7 trillion, and that this sum is split into the main categories of machinery investment, automation directly end users, and expenditures like land, facilities, services and other categories last. $1.5 trillion, or 41% of the market goes into machinery. The largest markets seeing the best growth opportunities are agricultural equipment, the food and beverage industry, machine tools, and materials handling.

The Future for Industrial Automation

• A new IHS Technology report forecasts that industrial automation will make up the majority of the Internet of Things by 2025, and Internet Protocol (IP)-addressable devices are the key enabling force that will get industry there.
• Industrial automation accounts for slightly more than half of the installed base for all Internet-connected devices in 2012, according to the IHS report, “Industrial Internet of Things – 2014 Edition.” By 2025, the industrial automation sector will account for nearly three-fourths of all connected devices.
• Equally impressive is the pace at which that installed base is expected to grow. The report estimates that the number of Internet-connected devices in the industrial automation sector will increase more than fiftyfold from 2012 to 2025 – at a compound annual growth rate of 36.3 percent.
• IHS estimates that the capital expenditure for industrial automation is $3.7 trillion, and that this sum is split into the main categories of machinery investment, automation directly end users, and expenditures like land, facilities, services and other categories last. $1.5 trillion, or 41% of the market goes into machinery.
• Internet-connected devices can be segmented into three different device classes: nodes, controllers and infrastructure. Among the three, the IHS report estimated that nodes, which include devices such as drives, I/O blocks and sensors, will account for roughly 80 percent of all Internet-connected devices shipped in 2018. This is due to the use of smart, connected devices in a broadening mix of market segments, such as transportation and building automation. On the other hand, shipments of infrastructure devices, while significantly lower in total number, will grow at the highest rate in that timeframe, with the total number of devices more than quadrupling from 2012 to 2018. This indicates that converged network architectures will become more and more prevalent in industrial applications.

Top trends in Industrial Automation

IHS predicts these top industry changes in the near future of industrial automation:

• Big Data taking a larger role in manufacturing
• Internet of Things
• Pervasive sensing and measurement
• Cyber security concerns in the industrial sector
• Consumer devices influencing automation
• Distributed intelligence systems

Internet of Things Market Forecast

• By 2020, over 100 million Internet connected wireless light bulbs and lamps will be in use worldwide up from 2.4 million in 2013, according to On World.
• IoE Creates $19 Trillion of Value at Stake for Companies and Industries — Cisco
• Between 2013 and 2022, $14.4 trillion of value (net profit) will be “up for grabs” for enterprises globally — driven by IoE — Cisco
• By equipping street lights with sensors and connecting them to the network, cities can dim lights to save energy, only bringing them to full capacity when the sensors detect motion. This can reduce energy costs by 70-80%. — John Chambers, Cisco
• Barcelona estimates that the Internet of Everything has created 47,000 jobs over the past seven years. — Cisco
• “Industrial Internet” has the potential to add $10 to $15 trillion to global GDP over the next 20 years — GE
• GE estimates that convergence of machines, data and analytics will become a $200 billion global industry over the next three years.
• By 2020, more than 5 billion people will be connected, not to mention 50 billion things. –World Economic Forum
• Within the next five years, more than 90% of all IoT data will be hosted on service provider platforms as cloud computing reduces the complexity of supporting IoT “Data Blending” — IDC
• Within three years, 50% of IT networks will transition from having excess capacity to handle the additional IoT devices to being network constrained with nearly 10% of sites being overwhelmed.  — IDC
• By 2017, 90% of datacenter and enterprise systems management will rapidly adopt new business models to manage non-traditional infrastructure and BYOD device categories. — IDC

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American Industrial Systems, Inc. (AIS) the leader in open architecture, IP-based HMI panels, Panel Industrial PCs (IPCs), Industrial IoT, M2M and Industry 4.0 touch screen interfaces, has developed a new white paper on the topic of the Industrial Internet of Things (IIoT), Machine-to-Machine Communications (M2M), Smart Technologies and Industry 4.0 Technologies.The term Industrial Internet of Things (IIoT), also known as Industrial Internet and Industry 4.0, refers to the integration of physical industrial machinery with software, internet, along with network sensors, actuators, and other industrial machines and equipment. Learn More>>