We have written recently on the cloud-IoT connection and on how cloud hosting is central to the current growth of the hosting industry. Given those two precursors, it is only natural to write this third piece on the direct impact of the IoT on the web hosting market.
Boom of IoT fueling hosting industry: long time coming
Some may experience déjà vu, feeling that they have read this same article maybe 5 or 6 years ago. After all, the notion of a surge of connected devices has been around for some time, and researchers who saw IoT as a source of growth for data center and infrastructure services have been proven right. An example of that is Rachel Chalmers, an analyst with 451 Research; she said in 2012 that the IoT would revolutionize the data center and hosting sector, creating a deluge of data that would cause organizations to work with outside companies to assist them in management.
Chalmers talked about how the potential of the data center industry was growing in part because it had remained so strong during the Great Recession, continuing to grow during that period when so many other industries receded. The worldwide credit crisis and economic conditions that some said teetered on a worldwide depression were not felt within the infrastructure industry, which continued with double-digit growth over those years.
Chalmers specifically pointed to the Internet of Things as the main centerpiece of the future, defining the emergence of the IoT as an “inflection point” that would create much greater growth for hosting as companies began to reorganize the way they approach information. “We believe hosting and managed services providers stand to be the main beneficiaries of this trend,” she said.
Reports show investment in IoT networks & infrastructure
Recent numbers suggest that Chalmers is right.
An IDC forecast from December 2017 suggested that the IoT would rise at a 15% CAGR, from $674 billion to $772.5 billion, between 2017 and 2018.
The same analysis noted that the sector would hit $1.1 trillion by 2021, growing at a CAGR of 14% from 2017 through that point.
A January 2018 report from Massachusetts-based analyst BCC Research specifically looked at the expansion of the market for IoT networking services.
The report said that the IoT is expanding globally because of the following factors:
- evolution of cloud computing and storage systems
- dropping cost of embedded computers and sensors
- proliferation of wearables
- broader wireless and web access.
The researchers noted that there are currently more connected devices than people on the planet, and that there would be four devices per person worldwide by 2022.
The revenue from sale of IoT networking plans will reach $1.0 trillion by 2022, this report projected, rising at a CAGR of 21.6% over that period.
Another compelling report is from Chalmer’s firm, 451 Research. The 2017 analysis gathered responses from 575 worldwide IT executives and senior IT buyers who had positions largely in North America and Europe.
The results showed that large numbers were planning on investing in various backend elements in order to facilitate the burgeoning Internet of Things over the next year:
- storage capabilities – 32.4%
- network edge hardware – 29.4%
- server infrastructure – 27.2%
- external cloud infrastructure – 27.2%.
The report noted that companies were increasingly adopting cloud storage because it allowed them to keep costs low while staying agile.
IoT impact: rise of cloud hosting
The cloud is predicted to quadruple in the next few years, said Chris Pentago in TechCo 2017. Pentago pointed out another startling fact: the portion of workloads processed internally would dwindle to just 8% of the total, with cloud hosts and data centers processing 92% of Web traffic.
Pentago pointed to the Internet of Things and big data as fueling this growth, since the volume of data being produced by the IoT is so massive.
IoT impact: “the new oil”
The Internet of Things is about interconnection of all the things around us, giving cloud processing and insight to our environments. We will increasingly be able to talk with and better manage our homes, offices, and cars.
Again, the scope of data must be huge in order to enable our “smart” surroundings.
Mark Bidinger of Schneider Electric said that the IoT is fundamentally about growth of data and growth of data centers.
As the Internet of Things heralds the arrival of an even more connected environment, said Bidinger, businesses realize that their networks should be interoperable, secure, transparent, and flexible. This concern with networks is in large part because of the value of what it is carrying – the data that Bidinger calls the “new oil,” a resource that large analytics platforms consume.
An example is a metals, minerals, and mining business. Every minute, the enterprise generates 2.4 terabytes of data through its mines, railways, and ports. The data is produced to feed the firm’s preventive maintenance and predictive analytics platforms. The ultimate question is always whether or not investing in data analysis is worth it. In the case study of this firm, “[t]he return on that data investment is about $200 million per year over the next 3 years.”
The extent to which IoT technology could yield ROI and help companies outperform their competition is almost unbelievable. However, edge data centers are needed for data processing. Colocation providers and web hosts will have to provide strong and flexible service so that the IoT can be easily integrated and demand can be met.
While huge amounts of data may be needed as “food” for the analytics programs, those systems will pay off by developing insights that lead to lower expenses, streamlined efficiency, better reliability, and greater speed.
IOT impact: rise in data lakes
People will be deploying more data lakes within the era of the IoT. Enterprises are increasingly using theses repositories of raw data stored in its native format.
This trend was reported by IT executive and engineer Dean Hamilton, who noted in 2017 that data lakes were becoming commonplace with the embrace of the Internet of Things.
He is backed up by the numbers. A study by MarketsandMarkets found that the data lake market would grow at a 28.3% compound annual growth rate (CAGR) from 2015 to 2021, rising from $2.53 billion to $8.81 billion (in USD) over that stretch.
As an increasing amount of data is produced, and as more cars, appliances, and sensors start to interact seamlessly in an IoT world, it is becoming generally accepted that data should be collected at central points, where big data engines can be used to compare it to other data and otherwise assess it. Having these data lakes in place is important in order for companies to get the most value out of the data, in immediately applicable and long-term knowledge.
To be clear on what a data lake is, it is a management and storage platform for huge quantities of structured and unstructured data, all in its native format. It is also utilized to more quickly restore data as needed.
Your IoT cloud
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