Federal IoT market to reach $3B by FY18

Mark Wisinger

By Kevin Shaker and Mark Wisinger, senior analysts

The internet of things today is what cloud was five to six years ago. A lot of people are interested in it and buying IT solutions that comprise IoT in disparate ways.

This is an exciting time for the IT industry because companies can influence how the market is shaped since it’s still so new. IoT is not a discrete technology but rather a wrapper encompassing many different technologies, and these solutions are ramping up in a big way through the growing amount of sensors and data.

The big picture projection is that $6 trillion will be spent on devices and IoT software across all industries in the next five years, according to Business Insider’s Business Intelligence research. We predict the federal IoT addressable market will hit $3 billion in FY18, up from $2.5 billion spent in FY16.

So which federal agencies are investing in IoT solutions? The U.S. Army is consistently the biggest spender on the defense side, while the Department of Transportation leads the way for civilian. This makes sense considering that transportation is a big IoT use case and given the department’s IoT-focused initiatives with state and local governments. We’re also seeing big leaps from NASA, which is working hard to help address IoT challenges. Perhaps the most interesting and surprising agency is the Missile Defense Agency, which is punching way above its weight class. The organization has a lot of sensors and sensor data associated with missile defense.

Right now, the opportunities for IoT technologies are much more implicit in nature. Some elements of IoT are at play that are not explicitly branded as such. These opportunities are important because they offer a chance to get in on the ground floor of IoT. There are also some longer-term, more strategic IoT initiatives. Both offer an avenue to help shape what the future of IoT in government looks like and for companies to establish expertise.

IoT encompasses so many different types of technologies – the environment naturally encourages partnerships. The best way for the IT community to approach IoT in government is to identify past successes with specific technologies. Those past successes will help identify the right partnerships and best practices to apply to new IoT initiatives.

Want to learn more about IoT trends and how this disruptive technology will shape the future of government IT?  Join us May 4 for our event on IoT in Government: From Impact to Opportunity, which will include a Market Intelligence briefing and government panel discussion.

One Response to Federal IoT market to reach $3B by FY18

  1. who is a good point of contact at AID to talk to about some of the requirements you write about in your great article?

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