# Analysis of ICT Industrial Trends in the IoT Era

This chapter organizes the overall structure of the ICT industry, given IoT progress, and provides quantitative verifications of each market's size, growth potential, and competitive environment.

## Section 1 Current Status of the ICT Industry and Its Structural Reorganization

### 1. Growth in things connected to the Internet

With advances in Internet technology, as well as in sensors and other technologies, household appliances, vehicles, buildings, factories, and many other things in the world are starting to be connected to the Internet, in

### 2. Growth in data traffic

The data traffic on networks is certain to skyrocket, given the growth in things connected to the Internet, as mentioned in the previous paragraph, the global penetration to conventional Internet-connected devices such as PCs and smartphones. In the Internet of Things (IoT) era, the number of things connected to the Internet is predicted to explode.

tration of the Internet, and the emergence of various services and applications.

### 3. Creation of new markets and business model transformations

How will the explosive growth in Internet-connected things and data traffic transform existing ICT industries and market structures?

The first projected effect is the creation of new markets and the development and expansion of existing ICT industries and markets. Potential new markets are those for new services and applications focused on adding value to big data collected from devices. Artificial intelligence (AI) technologies are expected to analyze and make use of big data created by the IoT. AI advances, then, will likely accelerate the IoT's creation of markets.

The second projected effect is further competition, as new business domains emerge. The competition around new added value from data and business domains will arise not just between traditional ICT industry enterprises but also between entrants from other industries and sectors, including ICT user industries.

In this way, an ecosystem of new ICT industries is expected to form, while existing ICT platforms and new ICT trends, driven by IoT, big data, and AI, influence and interact with each other.

## Section 2 Quantitative Verification of the Market Size, etc

### 1. Platforms

## (1) Cloud service market

Cloud services provide Internet resources such as servers, applications, data centers, and cables.

As pointed out in the previous section, the explosive growth in Internet-connected devices will fuel exponential growth in the data generated by these devices. Extracting value from huge numbers of devices and massive volumes of data with conventional cloud services entails very significant costs and labor. Furthermore, applications requiring real-time performance and services handling big data suffer from latency problems because cloud computing lacks sufficient processing power.

Edge computing is a recent technological trend to overcome these problems. Edge computing is a concept that expands conventional cloud computing to the edges of networks and distributes and allocates resources physically close to end users. The edges of a network refer to the borders where a communications network interfaces with external networks or the areas where end terminals are connected to the network. In other words, applications are distributed close to where data are created instead of concentrating data and their processing in the cloud. The goal of edge computing is to make use of more data and derive more value from the data (Figure 2-2-1-1).