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Internet of Things Expected to Quadruple in Size by 2020

Cities will be major beneficiaries from growth in the IoT market, according to a report released by Verizon.

Organizations are seeing measurable benefits from Internet of Things (IoT) projects, and the number of overall IoT connections will more than quadruple between 2014 and 2020, according to a Verizon Enterprise Solutions report released Feb. 23.

State of the Market: The Internet of Things (IoT) 2015: Discover How IoT is Transforming Business Results is based on data from a variety of sources, including Verizon usage statistics, customer insights and third-party research. The report delves into adoption trends and predictions for the future of the IoT market (Verizon defines IoT as to machine-to-machine technology enabled by secure network connectivity and cloud infrastructure, to reliably transform data into useful information for people, businesses and institutions.)

The report also includes guidance for business and public-sector leaders on developing an IoT strategy.

“For cities, it’s about taking data and weaving it together for actionable insight that can add value,” said Toni Oubari, manager of Internet of Things, Smart Cities, and New Product Development and Innovation at Verizon. “For example, if a city can use IoT to improve transportation or public safety, that can translate to more jobs, better economic development and improved sustainability as well.”

For example, said Oubari, local governments are making budgets go further with LED smart street lighting that doesn’t need regular maintenance, but can automatically report when it needs to be repaired. Utility companies are eliminating costly and inconvenient home visits to read meters by introducing smart meters that report more granular usage data without human intervention. 

According to the report, IoT growth is being fueled by a mix of technological, political and social factors which are driving more organizations to adopt IoT-enabled solutions. For example, use of social media and mobile technology has transformed consumer and citizen expectations, while the declining costs of sensors, connectivity and processing power has made IoT a more viable proposition to a broader set of organizations. 

To date, Verizon experts estimate that just 10 percent of enterprises have deployed IoT technologies extensively. But research commissioned by Verizon from ABI Research forecasts massive growth broadly, with the number of business-to-business IoT connections more than quadrupling between 2014 and 2020 — rising to an estimated 5.4 billion connections globally. Significant growth is expected among car manufacturers and makers of health and fitness tracking devices. Meanwhile, smart cities capabilities will become critical considerations for companies deciding where to invest and open facilities, due to their impact on operating costs and talent availability.

Mark Bartolomeo, vice president IoT Connected Solutions at Verizon, points out that while the core technologies powering the Internet of Things — sensors, cloud computing, intelligent networking — are familiar to most businesses and public-sector organizations, formulating a viable strategy and developing IoT solutions can be highly complex. 

Oubari suggests that government agencies that want to start IoT projects start small.

“You don’t have to boil the ocean,” she said. “But you need to look for a visionary – a city manager, a CIO – as long as they have that vision, you can look for a problem and start a trial project, then build on that and get buy-in to move it across the city.”

Other key findings from the report include: 

  • Machine-to-machine connections in the public sector managed by Verizon grew 46 percent in 2014.
  • The declining cost of sensors, connectivity and data processing power makes ROI equations for IoT projects even more appealing. Verizon also predicts that by 2025, organizations that adopt IoT extensively will be at least 10 percent more profitable than competitors that don’t.
  • By 2025 smart cities capabilities will become a critical consideration for companies deciding where to invest and open facilities.
  • By 2025 more than 10 percent of electricity will be micro generated by consumers and contributed directly to the smart grid.
Justine Brown is an award-winning veteran journalist who specializes in technology and education. Email her at