Meaningful use cases help spur spending on Internet of Things in Central and Eastern Europe, according to IDC


Jun 25, 2016

23 Jun 2016

FOR IMMEDIATE RELEASE, Prague — In a new update to the Worldwide Semiannual Internet of Things Spending Guide , International Data Corporation (IDC) forecasts that organizations in Central and Eastern Europe (CEE) will invest more than $11.2 billion in Internet of Things (IoT) hardware, software, services, and connectivity this year. And IDC expects IoT revenues in the CEE region will post a compound annual growth rate (CAGR) of 20.9% over the 2016‒2020 forecast period, reaching $24 billion in 2020.

Among industry verticals, transportation and manufacturing are leading the way in CEE IoT investments, at roughly $2.3 billion each in 2016. The next largest vertical, utilities, is expected to have IoT investments exceeding $1.2 billion this year. The IoT use cases receiving the greatest levels of investment from CEE organizations across these three industry segments are:

Freight Monitoring — which uses radio frequency identification (RFID), GPS, GPRS, and geographic information system (GIS) technologies to create an intelligent, Internet-connected transportation system. This system carries out the intelligent recognition, location, tracking and monitoring of freight and cargo through exchanging information and real-time communications via wireless, satellite or other channels.

Manufacturing Operations — which supports digitally-executed manufacturing, or how manufacturers use intelligent and interconnected I/O tools (e.g., sensors, actuators, drives, vision/video equipment) to enable the different components in the manufacturing field (e.g., machine tools, robots, conveyor belts) to autonomously exchange information, trigger actions, and control each other independently.

Smart Grid (Electricity) – where non-smart meter field devices owned by the electric utility are used to control and optimize power flow to assure efficient, safe, and reliable service. The devices used throughout the electricity distribution grid for tasks including line sensing, substation automation, feeder and line equipment control, and optimization. Utility-owned, in-home devices are included in this category when used for grid operations.

Looking across all industries in the CEE region, freight monitoring will receive the greatest level of IoT investment throughout the forecast period, followed by manufacturing operations and smart grid projects (electricity). In addition to these use cases, production asset management (where IoT is used to remotely track, monitor, and maintain industrial manufacturing devices that are part of the production value chain) and smart home will see significant levels of investment over the next several years. The IoT use cases that will experience the greatest revenue growth over the 2016-2020 forecast period are smart buildings, smart grid (gas), insurance telematics, and connected vehicles. In addition, eight other IoT use cases will see revenue growth of more than 100% during this time.

"The IoT market in the CEE region is taking off in much the same way as we see happening around the world. In recent years, it has become a popular theme among businesses, governments and other organizations, as well as consumers," said Milan Kalal, program manager of Internet of Things research with IDC CEMA. "During 2016, we expect IoT will move up the priority list for CEE organizations as they learn more about it and witness payback from IoT investments. Real-life deployments will increase as organizations strive for digital transformation with IoT as a key enabler."

While transportation and manufacturing will lead CEE verticals in terms of overall IoT investments, spending levels in the insurance industry will increase by more than 300% over the 2016‒2020 forecast period. Cross-industry investments, which represents use cases common to all industries, will increase by nearly 250% during this time. In addition, IoT spending levels will increase by more than 100% in construction, consumer, resource industries, retail, and transportation verticals.

A use case represents a detailed composition of a technology investment that is made to produce a set of end user benefits. The long term opportunity for IoT vendors is helping to identify and create immediate and residual benefits for end users through their technologies. “We see strong opportunities across many industries,” says Marcus Torchia, IoT research manager for IDC's Customer Insights and Analysis team. “For example, in highly instrumented verticals like manufacturing and transportation, large data sets are used to optimize operational processes and extend the life of high capital cost assets. In other sectors like healthcare and consumer, IoT technology is being used to improve quality of life."

The Worldwide Semiannual Internet of Things Spending Guide forecasts IoT revenues for 12 technologies and 47 use cases across 20 vertical industries in eight regions and 52 countries. Unlike any other research in the market, the comprehensive spending guide was designed to help vendors clearly understand the industry-specific opportunity for IoT today.

About IDC Spending Guides

IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.

This content extract was originally sourced from an external website (IDC) and is the copyright of the external website owner. TelecomTV is not responsible for the content of external websites. Legal Notices

Email Newsletters

Sign up to receive TelecomTV's top news and videos, plus exclusive subscriber-only content direct to your inbox.