The world of internet is spawning the new world of connected devices. Today, every device be it the simple coffee maker, refrigerator or even aircraft engines are connected providing valuable insights.
These also spell business opportunities where enterprises are better able to reimagine their business through the various data and insights gained from these devices.
This has led to technology companies and software service providers to create new solutions which fall into the realm of Internet of Things (IoT).
Gartner forecasts that 6.4 billion connected things will be in use worldwide in 2016, up 30% from 2015, and will reach 20.8 billion by 2020. In 2016, 5.5 million new things will get connected every day.
Zinnov, a management consulting firm, in its latest study Internet of Things Technology Services said that the overall IoT technology spend stands at $120 billion in 2016 and is expected to grow at 16% to $253 billion.
The study pointed out that industrial, BFSI and automotive verticals are the biggest spenders contributing to over 46% of the overall IoT technology spend.
A geography wise analysis in the report shows North America as the biggest spender followed by Asia, led by Japan and China, and Europe.
The report said that the current addressable IoT technology market for service providers stands at $34 billion and is expected to reach $69 billion in 2021.
Out of the $34 billion addressable market, $2.8 billion is currently addressed. An analysis of 200 service providers reveals a highly consolidated space with the Top 20 service providers addressing 82% of the market.
Talking about the study, Sidhant Rastogi, partner & practice head, Zinnov, said, “North America leads the IoT technology spend accounting for 40% of the global spend.
Global companies are seeking product development and managed services expertise from service providers for faster go-to-market. India is addressing to over 40% of total outsourced market.
Additionally, service providers are building end-to-end solutions across the IoT value chain through internal investments, or through acquisitions and partnerships with niche companies and start-ups across the technology stack. We expect to see high intensity consolidation in the IoT space soon.”
A study done by Tata Consultancy Services (TCS) has found that about four out of every five large companies are already using IoT technologies to deliver a picture that is richer than ever before on at least one of these four key aspects of their businesses: (a) their supply chains—the operations in which they produce and distribute their offerings, (b) the premises in which they do business with customers, (c) the products and services they sell to customers and lastly customers themselves.
Companies that have deployed IoT technologies to track all four areas—and especially how customers are using their products and services—are much better positioned to digitally reimagine their businesses.
“The core of IoT technology services will soon move towards providing data monetisation services through decision sciences. In order to win end to end IoT projects, pure-play engineering service providers would need to build or acquire strong managed services competencies,” Sidhant said.
According to TCS, companies that have digitally reimagined their businesses are pulling ahead in their sectors. They are profiting handsomely by changing their business model, core
offerings, business processes, customer segmentation, channels to market, and workplaces. The TCS study has found that IoT technologies are giving many companies new and vital insights on the state of their businesses.
For example, about a quarter have embedded digital sensors in their product offerings, ranging from coffee makers and refrigerators to aircraft engines and television sets.
Such product-monitoring IoT data reveals whether a piece of construction equipment or a truck engine is running or is incapacitated, or whether a car or truck will break down in the next 500 miles or motor along without a hitch. It therefore paints a clear picture of how customers actually use the product or service.
According to Zinnov report, companies are exploring newer business models and additional revenue streams through IoT implementation. At the same time consumers are becoming more powerful with the access to real time usage data.
There is a push for forming standards in IoT to enable interoperability of billions of connected devices. Companies and service providers are joining consortium and alliances across the technology stack and are collaborating even with their peers to promote standards. Service providers are also exploring new IoT specific engagement models. Innovations across the technology stack to cater the potential IoT threats are expected to continue driving IoT investments and penetration.
Service providers are also exploring new IoT specific engagement models. Innovations across the technology stack to cater the potential IoT threats are expected to continue driving IoT investments and penetration.