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By 2020 the Internet of Things will provide an economic value-add of almost $2 trillion dollars and will generate annualized revenues of $309 billion for the IT&T sector alone, according to research group Gartner.

Those forecasts may even be conservative. Industrial IP for instance puts the economic value-add $3.88 trillion, double the Gartner forecast. In its estimates it identifies a trillion dollars worth of value from extra customers, $810 billion in reduced time to market and $729 billion from eliminating waste as the three biggest gains.


(Image: Economic value-add from the IOT. Source Industrial IP)

Earlier this year McKinsey & Company offered a range of $2.7 trillion to $6.2 trillion, but over a longer time frame – out to 2025.

Likewise Gartner’s forecast of 30 billion IP addressable devices by 2020 pales in comparisons to some other forecasts which put the number as high as 80 billion.

Speaking at the recent Gartner Symposium/ITxpo Peter Sondergaard, senior vice president at Gartner and global head of research said the world is experiencing the emergence of a new digital industrial economy, fuelled by a massive expansion of devices connected to the internet.

Sondergaard said the combination of cloud, social collaboration, mobile and information with the Internet of Everything was the foundation of this new economy.

Digitalization exposes every part of your business and its operations to these forces. It is how you reach customers and constituents; how you run your physical plant; and how you generate revenue or deliver services. Enterprises doing this today are setting themselves apart and will collectively lead the new Digital Industrial Economy,” Sondergaard said.

While the IT sector is set to extracts strong benefits, it will also reap the whirlwind of disruption. “What many traditional IT vendors sold you in the past is often not what you need for the digital future. Their channel strategy, sales force, partner ecosystem is challenged by different competitors, new buying centers, and changed customer business models.” according to Sondergaard.

And he suggested the era of extended industry dominance by a few technology leaders may also be ending and as evidence he pointed to the emergence of new cloud and mobile providers, most of whom were unheard of five years ago

Digitalization creates an accelerated technology-driven start up environment across the globe. Many of the vendors who are on top today, such as Cisco, Oracle, and Microsoft, may not be leaders in the digital industrial economy.”

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