The internet of things (IoT) managed services market was valued at USD 46.53 billion in 2020, and it is expected to reach a value of USD 158.75 billion by 2026 at a CAGR of 27.82%, during the forecast period (2021 - 2026). The rise in the application of multi-cloud, automation, and increased demand for IoT in industrial space is augmenting the demand for IoT managed services across the globe.
- With the advent of Industry 4.0, the industrial adoption of IoT solutions is on the rise, the scalability, cost benefits, and data analytics benefits enabled by IoT solutions in industrial space are influencing the adoption. For instance, according to Tech Pro, over 80% of industrial manufacturing companies are either using or planning to use IoT devices.
- Enterprises looking to opt for IoT are increasing in number, and global IoT MSPs are further targeting such enterprises. According to CompTIA survey on MSPs, MSPs are seeing emerging technology as a significant source of business opportunity, and over 50% of respondents offer IoT managed services.
- However, exposure of confidential information regarding the privacy concerns is a key challenge for the market.
- Due to spread of COVID-19, manufacturing facilities are expected to increase the level of automation in future, wherever possible, due to social distancing norms. This would further push the number of industrial IoT connected objects to increase at a remendous pace, hence fuelling the demand for IoT managed services.
Key Market Trends
Manufacturing Sector to Hold a Significant Market Share
- Industry 4.0 is transforming industries, from having legacy systems to smart components and smart machines, to facilitate digital factories and development of an ecosystem of connected plants and enterprises. Industry 4.0 has persuaded OEMs to adopt IoT across their operations. Anticipating the increased adoption of IoT and digital transformation across industries, the European Commission estimated that the value of IoT in Europe itself is expected to exceed EUR 1 trillion in 2020.
- Maryville University estimates that by 2025 over 180 trillion gigabytes of data will be created worldwide every year. A large portion of this will be generated by IIoT-enabled industries. A survey by Industrial IoT (IIoT) giant Microsoft found that 85% of companies have at least one IIoT use case project. This number will increase, as 94% of respondents said they would implement IIoT strategies by 2021.
- The benefits offered by IoT in the manufacturing industry are driving the adoption rates, benefits such as increased machine utilization, predictive maintenance and production, data analytics, monitoring, automation, and cost benefits.
- According to the Information Technology and Innovation Foundation (ITIF), IoT applications for monitoring machine utilization can increase manufacturing productivity by 10% to 25%. %. BC Machining LLC, a metal parts manufacturer, onboarded a machine utilization monitoring solution that helps it to improve productivity and optimize the utilization of computer numerical control (CNC) machines. IIoT solutions capture real-time data from equipment sensors to provide reports on the machines' cycle times, downtime, and other parameters.
Asia-Pacific is Expected to Witness the Highest Growth Rate
- As the Asia-Pacific region is developing, it holds major expansion potential, owing to the booming commercial sectors, like healthcare, safety and security, manufacturing, energy, and agriculture. This is enabling the IoT market to grow at a faster rate.
- Due to integration of blockchain and cryptographic processes across IoT security services, IoT offers centralized management of network and associated data, thereby reducing the business vulnerabilities and security concerns, as well as fueling the IoT in the engineering services market in this region.
- The countries, such as India, Japan, China, Australia, and South Korea, are the major contributors to the Asia-Pacific market, and the growing smart city implementation in this region is presenting the market with varied potential growth opportunities.
- Moreover, growing government initiatives to encourage healthcare providers and other healthcare organizations to adopt EHR and EMR technologies and aggressive investments from nonprofit entities and private sectors in different applications are some of the factors expected to drive IoT managed services market in the Asia-Pacific region.
The IoT managed services market is highly fragmented, owing to the presence of a large number of players. Majority of vendors are participating in various marketing strategies to expand their market share. The vendors available in the market are competing on price, quality, brand, and product differentiation, and also the acquisition of small players are happening to ensure an optimum position in the IoT managed services, globally. Various key players are IBM Corporation, Accenture PLC, Tech Mahindra Limited, etc. Key recent developments are -
- February 2020 - Smartfren, one of Indonesia's leading telecom operators with more than 20 million active subscribers, announced Cisco as its preferred digitization partner to create a multi-cloud architecture. The project will entail the creation of a digital services data center architecture in Indonesia with cloud computing, and cloud services integrated.
- October 2019 - Integron announced the launch of managed services solution for mobile asset management. Integron will leverage its expertise in IoT managed services to assist connected health and life sciences companies in the turnkey deployment of scalable asset management tools.
- April 2019 - Larsen & Toubro Infotech Ltd. and Veermata Jijabai Technological Institute (VJTI) implemented several projects, which are the outcome of their alliance's unique Industrial Internet of Things (IIoT) test lab developed in past years. By establishing the IIoT lab, the alliance of LTI-VJTI is aimed at increasing awareness and creating interest in using the cutting-edge and emerging technologies to solve social problems.
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