Gartner expects phenomenal growth in the number of connected things due to more intense urbanization and a need for city leaders to find the right balance between limited resources and environmental sustainability issues.
And that growth is a boon for the companies that sell those connected devices and services. "Smart cities represent a great revenue opportunity for technology and services providers (TSPs), but providers need to start to plan, engage and position their offerings now," said Bettina Tratz-Ryan, a Gartner research VP.
The hot spots for growth
Gartner’s forecast anticipates smart homes and smart buildings will account for 45% of the connected things in use this year, and that the total will rise to 81% by 2020.
"The majority of Internet of Things (IoT) spending for smart cities will come from the private sector. This is good news for TSPs as the private sector has shorter and more succinct procurement cycles than public sectors and cities," she added.
It isn’t all about smart buildings and smart homes, though. Also contributing to the forecast totals are connected things used in transport, utilities, public services and to a lesser degree health care (monitoring devices).
As might be expected, residential applications -- specifically smart LED lighting -- will lead the way with the most growth in IoT applications, increasing from 6 million in use this year to 570 million by 2020.
Services and analytics too
While investment on the residential side as well as other applications such as parking, traffic flow metering, EV charging coupled with streetlights and more are very much part of the picture, Tratz-Ryan said Gartner’s research indicates that services and analytics are where the big money will be. "We expect that by 2020, many IoT TSPs will have grown their hardware revenues through services and software by more than 50%."
Detailed analysis is available in the Gartner report: Smart Cities Will Include 10 Billion Things by 2020 — Start Now to Plan, Engage and Position Offerings.