Today there are 8.6 billion IoT connections. By 2026, that number will nearly triple to 23.6 billion, according to a new report from research firm ABI Research.
However, the analyst firm said the looming security gaps offer at the same time a tremendous revenue potential for players in IoT security.
“Concerns about security of the Internet of Things (IoT) are widespread,” said Michela Menting, digital security research director at ABI Research.
Security gaps run the gamut from devices that are incapable of being secured to original equipment manufacturers (OEMs) and vendors often choosing to accept the risk rather than remediate it, as well as functional safety-type IoT devices that prioritize availability and cannot simultaneously ensure confidentiality.
“There are limited IoT security solutions in the market, due in large part to the fragmented nature of the IoT itself,” Menting explained.
While these security gaps pose a significant challenge for companies and end-users, they also represent a tremendous opportunity for players in the IoT space, including IoT service providers, vendors, platform operators, and Information Technology (IT)/Operational Technology (OT) security organizations.
“Much like the number of IoT connections is set to explode, so too is the revenue opportunity in IoT security. ABI Research market data shows that total revenue in the space will reach $16.8 billion by 2026,” Menting said.
The sheer number of new IoT connections over the next 5 years, the increased digitization capabilities of certain IoT markets (e.g., utilities, industrial, infrastructure, and smart cities), the increase in connected users and assets along with the increased connectivity needs brought forth by the Covid-19 pandemic are all fair predictors for digital security overall.
The amount of IoT security revenue, however, does not always correlate with the amount of IoT connections, and some markets are expected to experience disproportional revenue, Abi said.
Menting pointed out, “This is due to the multi-faceted level of security and management requirements that provide the foundation for other key operations and valuable services, including for intelligence operations and analytics, life cycle management and predictive maintenance, firmware updates, and device and data integrity.”
“ABI Research forecasts that digital security services will enter the Return on Investment (ROI) equation significantly faster in the next 3 years, as both security vendors and IoT players will better understand how to protect the key monetization applications related to their IoT strategies,” Menting said.
