April 1, 2014

Government To Invest $1.2 Trillion in Internet of Things, According to IDC

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A new report released by IDC Government Insights predicts the direction of government IT spending throughout 2014 and beyond. Two of their major predictions are that the US government will decrease its traditional IT expenditures by 15 percent, and invest the money into cloud computing, and that the government will spend $1.2 trillion in 2017 on Internet of Things (IoT).

A decrease in traditional IT expenditure is in line with current market trends. Many of the companies that fulfill government IT contracts, such as IBM and Oracle, are shifting their own resources into cloud computing. Last month for instance, IBM sold their low-end server business to Lenovo for $2.3 billion, in order to focus on their enterprise big data platform. Oracle recently announced a new cloud-based offering as well, that it’s calling Database as a Service (DBaaS).

IDC’s prediction that the government will increase its spending on IoT related technology to $1.2 trillion by 2017 is a bolder claim. Although a few major technology companies recently announced an Internet of Things Consortium, in an attempt to standardize device interoperability, there’s no clear indication of where exactly the market is headed.

The Internet of Things refers to devices that can transfer data between each other without requiring direct human interaction. Popular consumer devices such as the Nest thermostat, and FitBit activity monitor, represent the first major forays into widespread IoT connectivity. Some of the potential business uses of IoT technology include smart factories, highly personalized advertising, and connected warehouses and assembly lines.

In a separate report released last year, IDC estimated that the total worldwide IoT market would be worth $8.9 trillion by 2020. Putting these predictions together, government spending would then make up at least 13 percent of the entire market.

Do you have any of your own predictions about the future of IoT or cloud computing? Let us know in the comments!

photo credit: paul bica via photopin cc