‘INTERNET OF THINGS’ TO REACH VALUE OF $1.9 TRILLION DOLLARS, SAYS GARTNER

Nearly 15% of this value would come from manufacturing, 15% from healthcare and 11% from insurance.

Gartner predicts $1.9 trillion (£1.18 trillion) could be unlocked in economic value for companies world wide in the 'Internet of Things' (IoT).

IoT refers to the rapid growth in the number of smart devices including industrial machines, cars, appliances and mobile devices that communicate with each other, generating massive amounts of data.

At the Gartner Symposium/ITxpo 2013 in Barcelona, Gartner said nearly 15% of this value would come from manufacturing, 15% from healthcare and 11% from insurance.

Its research suggested the manufacturing sector would benefit from producing billions of devices at reduced costs, while the healthcare sector would be driven by the emergence of people to device collaboration such as wearable devices for elderly people that detect medical conditions.

Although IT spending in Europe, the Middle East and Africa will show an average annual growth rate of 2.2% through 2017, IoT will create new markets with growth coming from non-traditional IT markets, according to Gartner.

Peter Sondergaard, SVP at Gartner and global head of Research, said: "While in 2015 the combined IT and telecom market will hit nearly $4 trillion, the incremental revenue generated by the Internet of Things' suppliers is estimated to reach $309 billion per year by 2020.

"Half of this activity will be new start-ups and 80 per cent will be in services rather than in products. The Internet of Things is a strategically important market. It will accelerate fast and will drive both revenue and cost efficiencies."

Gartner also predicted that the number of connected devices would hit 30 billion from 2.5 billion in 2009.

Nick Jones, research VP and analyst at Gartner, said: "Businesses will need big data and storage technologies to collect, analyse and store the sheer volume of information. Furthermore, to turn data into money business and IT leaders will need decisions as they won't have the time or the capacity to make all the decisions themselves they will need processing power."

The research comes not long after Cisco predicted $14.4 trillion could be unlocked in economic value for companies worldwide in the 'Internet of Everything'.

Cisco said nearly 27% of this value would come from manufacturing, 11% from retail, 9% from information and 22% in education, health and finance.