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The IoT Market

Welcome to the IoT Market section of our comprehensive IoT terminology guide! Here, we will explore the world of IoT and its market dynamics. In addition to this section, you will find other helpful segments covering IoT Definitions, IoT Communications, IoT Connections, and IoT Security. These sections are designed to swiftly provide you with the relevant terms for each specific area.

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The Global Development of the IoT Market 2023 and Beyond

The global Internet of Things market is predicted to be worth US$900 billion in revenue by 2025 and this figure has trebled since 2019, GSMA Intelligence reports, demonstrating the momentum that IoT has. Inevitably revenue has taken a hit because of COVID-19 but, at the same time, IoT has had the opportunity to prove its value in the pandemic, notably in connected logistics to ensure vital supplies and vaccines are delivered to those that need them.

The IoT market is complex, sophisticated and multi-layered with different use cases and categories requiring different services and relying on different business models. Thing to person business models are different to thing-to-thing models and provision of connected mobility has different costs and requires more complex connectivity that connecting static objects such as those in connected manufacturing and to enable Industry 4.0.

IoT benefits come in many forms. First there is revenue generated by the applications, platforms and services that exploit the insights generated by data. This can either be monetized by charging for improved services, better products or enhanced quality or a return can be achieved in operational efficiency. Often an IoT business case is a blend of both models and business models can involve multiple parties with benefits flowing in several directions simultaneously.

Consider watching our video tutorial on the Benefits of IoT and on IoT and Digital Transformation.

The immense scale of IoT can make competitors collaborators and transform product-focused companies into service organizations. This makes it a challenge to define the IoT marketplace because many IoT-related functions also fit into wider digital transformation initiatives. For instance, the traditional transaction of buying power from an electricity company has been altered by home generation using renewables which is also sold back to the grid.

This has resulted in connected utilities and smart grids that are managing different demand profiles caused by charging cars alongside different generation profiles caused by solar and wind generation. The growth in useful data alongside innovation in artificial intelligence and machine learning and advances in AI (Artificial intelligence) and machine learning will continue to increase the applicability and value of data analytics, uncovering additional use cases and functions that the IoT marketplace can support. Scale and flexibility requirements means the IoT market is moving away from selling equipment and software to selling business outcomes as-a-service. The XaaS (X as a service) market provides the means to scale up rapidly, access the latest innovation and avoid capital intensive investment in hardware such as servers and IoT equipment.

The market is maturing away from requiring organizations to create IoT systems and processes themselves by buying everything from IoT modules, gateways, terminals and devices to providing these as-a-service. To an extent, IoT is practising what it preaches in terms of servitization and thereby lowering barriers to entry by identifying the goals of a use case or the enterprise and then assembling the combination of software and hardware necessary to make the business case operational.

As always, the market determines the success of failure of an IoT project, and the XaaS model matches the need to accelerate time-to-market but also to experiment and fail fast with limited commitment to hardware and services.

X as a Service



The management of a network and systems, presented to the client in a web interface. In a sense, it’s a specialized version of SaaS, where the first “S” involved is management software.


Infrastructure as a service

A form of cloud computing that provides virtualized computing resources over the internet.


Platform as a service

A cloud computing model in which hardware and software tools are delivered to users over the internet.


Describes industries using their products to sell an outcome as a service, usually for a recurring subscription, rather than as a one-off sale of a product.


Software as a Service

A software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted.

Connected Mobility


Electronic Control Unit

A generic term for any embedded system that controls one or more of the electrical system or subsystems in a transport vehicle.


Intelligent Transportation Systems

Advanced applications which (without embodying intelligence as such) aim to provide innovative services relating to different modes of transport and traffic management, and enable various users to be better informed and make safer, more coordinated, and ”smarter” use of transport networks.

Connected Logistics


A machine-readable code in the form of numbers and a pattern of parallel lines of varying widths, printed on a commodity and used especially for stock control.

Cold chain

An unbroken cold chain is an uninterrupted series of refrigerated production, storage and distribution activities, along with associated equipment and logistics, which maintain a desired low-temperature range.


Electronic data interchange

The transfer of structured data from one computer application to another by electronic means and with a minimum of human intervention. It also describes the electronic exchange of documents between businesses and organizations including government agencies.

Fleet management

A function which allows companies to remove or minimize the risks associated with vehicle investment, improving efficiency, productivity and reducing overall transportation and staff costs (see also IoT fleet management)

Connected Manufacturing


Advanced Metering Infrastructure

A digital architecture that allows for two-way communication between a smart meter and a provider, by way of an IP Address.


Automatic Meter Reading

The technology of automatically collecting consumption, diagnostic, and status data from water meter or energy metering devices and transferring that data to a central database for billing.


Bill of Materials

A comprehensive list of parts, items, assemblies and other materials required to create a product.


Computer-Aided Design

A technology that designs a product and documents the design’s process. CAD may facilitate the manufacturing process by transferring detailed diagrams of a product’s materials, processes, tolerances and dimensions with specific conventions for the product.

Connected Utilities and Smart Grids

A utility supply network that uses digital communications technology to detect and react to local changes in usage.


Cyber physical production systems

Systems that connect physical and digital entities are connected, monitored and managed with computer programming and algorithms.


Enterprise Resource Planning

The integrated management of core business processes, often in real-time and mediated by software and technology.

Industry 4.0

A name given to the current trend of automation and data exchange in manufacturing technologies. It includes cyber-physical systems, the Internet of things, cloud computing and cognitive computing. (see also IoT trends in industrial manufacturing)


Just In Time

An inventory management method whereby materials, goods, and labor are scheduled to arrive or be replenished exactly when needed in the production process.


A visual system for managing work as it moves through a process. Kanban visualizes both the process and the actual work passing through that process.


Manufacturing Execution System

An information system that connects, monitors and controls complex manufacturing systems and data flows on the factory floor.


Product Lifecycle Management

The process of managing the entire lifecycle of a product from inception, through engineering design and manufacture, to service and disposal of manufactured products.


Quality Management System

A formalized system that documents processes, procedures, and responsibilities for achieving quality policies and objectives.


A visual system for managing work as it moves through a process. Kanban visualizes both the process and the actual work passing through that process.

Smart manufacturing

Describes an environment in which computers are in charge of decision-making. In a smart manufacturing environment, physical and digital are connected and communicate with one another to improve production.

Smart factory

A broad category of manufacturing with the goal of optimizing the manufacturing process.

Smart meter

A meter in a house or building that measures electricity, gas, or water consumption. It is termed ‘smart’ because it responds to usage and will increase or decrease flow according to the general consumption data from the utility company as well as the individuals within the building.

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