The global market for Internet of Things (IoT) technologies will almost treble in size over the next five years, according to a new forecast.

Research firm GlobalData predicts that the overall market, consisting of software, services, connectivity and devices, will jump from $130 billion this year to $381 billion by 2023, with sales volumes rising at a compound annual growth rate of 20 per cent.

The study finds that IoT solutions for government, utilities and manufacturing currently dominate the market with the combined sectors responsible for 58 per cent of related-sales this year. These industries will continue to lead in the coming years, albeit at a slightly smaller rate as other sectors, such as the leisure and retail industries, step up their adoption of IoT technologies.

Energy and transportation are among other industries embracing IoT with a the sectors combined responsible for 15 per cent of sales this year.

While IoT devices and connectivity get a lot of the publicity, software and services comprise the biggest opportunity, according to Global Data.

“The diverse ecosystem of providers offering software and services makes this segment especially competitive. Operators are vying to offer value-added services beyond connectivity, while network and infrastructure vendors are branching out into IoT platforms and applications,” said Kathryn Weldon, technology analyst at the research group.

On the enterprise adoption side, companies are only now beginning to use IoT for more than cost control or productivity and operations enhancements, GlobalData said.

It said deployments are getting larger, and more lines of business within a given company are seeing opportunities.

“Capabilities enhanced by new technologies such as augmented and virtual reality, and machine learning/artificial intelligence are going to change the way companies use IoT, with the eventual goal of enabling them to not only improve their current products and processes, but also generate new revenue streams through the development of their own new products and services,” the company said.