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Internet of Things—a new world and a huge business opportunity

In revenue terms, the IoT market in 2019 was worth $465 billion and is expected to grow to $1.5 trillion by 2030.

June 26, 2021 / 10:26 AM IST

What is IoT?

Internet of Things (IoT) simply means devices communicating with each other and systems using the internet. Not just mobile, computers and TVs but all kinds of devices including fridge, fan, car dashboard,  industrial machines, transportation and logistics, thermometer and dialysis devices—in short all devices that can be connected to the internet.

With the use of sensors, cloud data and applications, they communicate with users and each other and can also perform manual or pre-programmed instructions and tasks.

A simple example is when you are in your car and can turn on AC and lights at home. The camera and security system recognises you and gives access to digital locks at home. In industry, it can mean the workshop supervisor and control room being alerted about the failure of a part of a machine.

Applications can range from home automation, travel and logistics, industrial use, plant monitoring, agriculture and more. Let’s try to understand how this happens.


IoT system integration has five major elements.

Sensors/devices: These collect data from the environment they are operating in. For example, a proximity sensor will sense if an object is coming in the way of a car or a robot so that it stops or pauses. Thermal sensors can report temperature and humidity sensors can tell how moist air or Earth’s crust, information that can be used by farmers and to predict the weather. Camera, accelerometer and GPS are few other examples.

Connectivity: To send this data to other devices or people we need to gather it, analyse it and create end-user understandable messages over a programmed application. Connectivity to the internet makes data transfer and access possible.

Gateways: These basically convert raw data from sensors to formatted data which cloud applications can understand. They may reduce the volume and size of data to be passed to the cloud. Gateways provide security by protecting the system from unauthorised access and cyberattacks.

Cloud ecosystem, data management and processing: This cloud ecosystem binds all components together over the internet, right from gateways through which data is received to actuators to users and their devices. These are often referred as IoT platforms.

Depending on the input and data, the information will be processed and passed on to the user as well other devices. Like in the above proximity case, it may send input to apply brakes to the brake lever (such actionable components are called actuators). All of these need to be connected to the internet.

UI user interface: It is nothing but messages or apps that users have that show them status, action and information. Through this web, cloud server info can be passed to the user. Users may interact with the system using a phone, smartwatch or computer, or connected wearable.

How big is the opportunity? 

In revenue terms, IoT market in 2019 was worth $465 billion and is expected to grow to $1.5 trillion in 2030.

Services, software, cloud, and apps including connectivity, will account for 66 percent of spending on IoT, with the remaining accounting for hardware, in the form of dedicated IoT devices, modules, and gateways.

According to a McKinsey and IOT forecast, the number of businesses that use IoT technologies has increased from 13 percent in 2014 to about 25 percent today. Worldwide, the number of IoT-connected devices is projected to increase to 43 billion by 2023, an almost threefold increase from 2018.

In my view, it is an industrial revolution just like electricity in 1914 and onwards where electricity is now the internet in every device out there. With faster cloud- computing power and the advent of 5G, our homes and businesses will see a huge change.

Various studies of smart manufacturing as a key growth sector of the industrial internet of things (IIoT) market over the next five years predict an increase in the global number of IIoT connections from 17.7 billion in 2020 to 36.8 billion in 2025, representing an overall growth rate of 107 percent.

According to Forbes, the global security market is expected to reach $270 billion by 2026 and 77 percent of the companies will be spending on externally managed security services. Regular security updates should be a part of the IoT platform package that you choose.

In a report from Digitalist, by 2025, the IoT’s economic impact could reach $11 trillion, or 11 percent of global economic value. With evident importance to the economy, the internet of things industry continues to grow in market size as well.

Statista says the global IoT market will grow to $1.6 trillion by 2025. International Data Corporation estimates that total spending on consumer and industrial IoT technology and services will surpass $1 trillion by 2022, growing at a double-digit rate.

Bottom line is that opportunity is huge and like electricity, windows /Macintosh OS, computers, mobiles, IoT will become an inherent part of our lives.

Which IoT stocks to watch for?

Skyworks Solution

Skyworks makes wireless chips for the mobile, automotive, home automation, medical, wearable, wireless infra components, security, defence, and industrial markets. Skyworks is uniquely positioned to capitalise on emerging 5G and IoT opportunities.

Skyworks will acquire the Infrastructure & Automotive business of Silicon Labs in an all-cash asset transaction valued at $2.75 billion, which can help them in expanding to driverless connected cars.

The company has a large share of revenue coming from Apple, which is its key customer for chips. Recently developed Skyworks’s highly integrated SkyOne solution for WiFi is enabling Facebook’s Oculus Quest which is a top-notch VR game.

So from connected homes, which have security, devices, gas and electricity to IoT-based health monitors defibrillators and patient telemetry and in industry, GPS, smart cities and lighting controls are being targeted.

Sky5's portfolio reached premium and mid-tier 5G smartphone launches at Samsung, Oppo, Vivo, Xiaomi, and other leading OEMs. The company has more than 24 percent PAT margins over the last four years with 27 percent RoE & ROCE. Growth this quarter has been stupendous.

Rockwell Automation Inc

It is a provider of industrial automation with brands including Allen-Bradley and FactoryTalk Software Innovation Suite. Innovation Suite with PTC INC s ThingWorx IIoT platform connects disparate devices, applications, and data sources across enterprises, providing a single source to collect, aggregate, and enable secure access to industrial operations data.

Its design lets companies connect, manage, monitor, and control diverse automation devices and software applications through one intuitive user interface. Companies like Lonza or Thermo Fisher, which are world-class companies, are using Rockwell’s Pharma suite manufacturing and execution system with digitisation in processes.

Honeywell Automation

“Honeywell connected plant” an industrial Internet of Things approach connects people to assets, automates predictive analytics, and enables increased collaboration.

Offshore oil platforms can reduce production losses and unplanned downtime and increase safety and regulatory compliance. When it comes to automation, Honeywell has always been an obvious choice with precise expertise.

From chemicals, paper, cement to refrigeration and air conditioning of plants, the company has thrived in the human-machine interface (HMI) and a highly scalable, integrated multi-server system. Honeywell DSA allows multiple experion SCADA servers to operate as one within a single asset or across the enterprise and enables seamless global access to points, alarms, interactive operator control messages, and history.

Virtual engineering platform (VEP) is a private cloud operated from three Honeywell data centres with a total capacity equivalent to 15,000 virtual machines (VMs). Engineers can have access to all the tools inside this cloud environment to virtually implement an industrial user’s real-world automation control system. This company is advantageously placed as most companies for their Capex and plant upgrades are its clients.

Disclaimer: The views and investment tips expressed by the expert on are their own and not those of the website or its management. advises users to check with certified experts before taking any investment decisions.

Pritam Deuskar
first published: Jun 26, 2021 10:26 am
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