By 2025 the IoT market will be worth $1.1 trillion according to the GSMA. There will be 25 billion IoT connections – both cellular and non-cellular.

Now show me the revenue. Well there is the bad news amid all the exciting potential. Because according to the GSMA only 5% of the IoT revenue is be for connectivity. That still equates to $55 billion, but spread over 100 major operators that comes down to about half a billion a piece. Nice if you can get it, but not enough to transform our fortunes.

It begs the question where the other 95% is going, and how we can get a piece of that. According to the GSMA, spending on IoT will comprise

  • 5% on connectivity
  • 68% on platforms, applications and services
  • 27% on professional services.

There is a profound question in all of this, which is why connectivity itself is valued so little. But moving beyond that, the message from the GSMA is clear. B2B service providers need to expand beyond connectivity to build their share of that $1.1 trillion. And the report contains some hope. More than half the IoT connections (13.8 billion) will be for the industrial internet – ie vertical-specific applications and those within enterprises.

The question is, can B2B service providers expand into areas like security, managed services, professional services, consulting, data analytics and supplying applications – thereby increasing their share of the spend that’s available?

To do so requires a massive shift away from selling pipes to selling solutions. But the benefit of doing so is clearly highlighted in these figures.

Posted by Teresa Cottam

Teresa helps B2B service providers improve their commercial results and the customer experience they deliver through research, insight and analysis that builds effective strategy. She is a judge of the GSMA GloMo's for customer experience and enterprise innovation, and for the UK Cloud awards. You can follow her on Twitter @teresacottam

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