Technology analyst firm International Data Corp. has updated its spending estimates for the Internet of Things, saying it will grow 16.7 percent in 2017 to just over $800 billion.

IDC also said global IoT spending will jump to almost $1.4 trillion by 2021, driven by investments in IoT connectivity, hardware, software and services.

IDC reckons that freight monitoring, manufacturing and production asset management will see the biggest IoT related investments in 2017. In addition, smart grid technologies for utilities such as electricity, gas and water will also see significantly increased investments this year.

Investments in smart home technologies will see a big increase in the next five years, IDC said, and so will airport facilities automation, electric vehicle charging and in-store contextual marketing. The manufacturing and transportation industries will be the biggest spenders on IoT in the next four years, splashing out $183 billion and $85 billion this year, respectively.

IoT hardware will account for the bulk of enterprise spending throughout IDC’s forecast period, which covers 2017 to 2021. However, while IDC reckons that spending on hardware will double between now and 2021, its growth will be much slower than that of spending on services, software and connectivity. Instead, software and services spending will grow at the fastest pace, with application software accounting for more than half of all IoT investments by 2021. Hardware spending will focus mostly on the modules and sensors that connect end points to data center networks.

“The discussion about IoT has shifted away from the number of devices connected,” Carrie MacGillivray, IDC’s vice president of Internet of Things and mobility, said in a statement. “The true value of IoT is being realized when the software and services come together to enable the capture, interpretation and action on data produced by IoT endpoints.”

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