Internet of Things Technology Spend is Expected to Grow at 20% to Reach ~USD 500 Billion in 2023, Says Zinnov

~The market addressed by IoT Service Providers has grown at 28% in the last year alone to touch USD 4.9 billion in 2018~

Zinnov, a leading management consulting firm, today released the ratings for Zinnov Zones 2018 – Internet of Things Technology Services. This pre-eminent rating will enable business leaders across industries make informed decisions in their partner selection across geographies for their Internet of Things (IoT)-led service initiatives.

According to Zinnov’s research and analysis, the current spend on IoT technology & services is pegged at USD 201 billion and is expected to grow at a CAGR of 20% over the next 5 years. Adoption of IoT is being buoyed by the increasing maturity of enabling technologies around networking, computing, and storage. Enterprises are also adopting transformative business models enabled by IoT to generate alternate revenue streams.

Speaking about the rating, Pari Natarajan, CEO, Zinnov, said, “The convergence of disruptive technologies is accelerating the adoption of IoT in enterprises. However, unclear returns on investments is an obstacle. Enterprises need to design a value proposition and RoI (return on investment) model to include relevant metrics around operational efficiencies and customer experience, in addition to enabling new revenue streams. Enterprises will need to adopt an open innovation fabric, and partner with various entities to achieve favorable outcomes.”

In addition to analyzing the state of IoT adoption in enterprises, the report also analyzes the existing business of IoT Service Providers, where the addressed market share currently stands at USD 4.9 billion, and has grown at a rapid rate of 28% in the last year. The IoT services marketplace is highly consolidated with the Top 25 Service Providers accounting for more than three-fourths of the market.

Speaking about the Service Provider opportunity, Pari added, “Service Providers with end-to-end capabilities help enterprises manage the challenge of multiple vendors. The market being addressed by Service Providers is growing faster than the rate of IoT spend, as enterprises are increasingly seeking support across different layers of their IoT initiatives.”

With enterprises increasingly seeking a use case-based assessment view of Service Providers, the rating has been structured to evaluate the Service Provider community extensively for their IoT prowess, with both a service line/competency- and use case-based approach across the following segments:

  • Service lines:IoT Strategy & Consulting, IoT Engineering, IoT SI and deployment, Managed Services
  • Competencies:Platform and Application, Communications, Sensors & Devices, Big Data and Analytics
  • IoT-enabled use cases:Predictive Maintenance, Connected Vehicles, Supply Chain Intelligence, Smart cities, and Customer 360

The Zinnov Zones IoT report highlights some of the key trends that emerged from the study –

  • The power of connectivity and data is providing unprecedented visibility, control, autonomy, and intelligence across verticals and use cases. However, security, privacy, and interoperability remain top challenges of large scale IoT adoption.
  • IoT is blurring industry lines and is helping enterprises explore newer business models and additional revenue streams.
  • Innovations across the technology stack to cater to the potential IoT threats are expected to continue driving IoT investments and growth.
  • Technology enablers at every layer of IoT stack are investing to provide solutions that address these challenges.
  • Enterprises and Service Providers are pushing for standardization in IoT through consortiums to allow interoperability of the billions of connected devices.

About the Study:

The study titled, ‘Zinnov Zones 2018 – Internet of Things Technology Services,’ analyzed the Global IoT market and trends from both the Spenders’ and Service Providers’ POV. This is the third consecutive year that Zinnov has assessed Service Providers across the globe for their IoT capabilities. The report covers a detailed market overview and the state of IoT adoption in enterprises. The list of Service Providers assessed includes: Altran, Capgemini, eInfochips, Genpact, Happiest Minds, HARMAN Connected Services, HCL, Innominds, L&T Infotech, L&T Technology Services, Microland, Mindtree, Mphasis, Persistent Systems, Robert Bosch Engineering and Business Solutions, Softdel, Syntel, Tata Consultancy Services, Tech Mahindra, UST Global, Virtusa, Volansys Technologies, Wipro, and Xoriant.

 

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