Global IoT solutions and services market is estimated to be valued at US$ 286.35 Bn in 2024 and is expected to reach US$ 913.67 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 18% from 2024 to 2031.
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Growing adoption of advanced technologies such as AI, Machine learning, and cloud computing can boost demand for IoT solutions and services globally. Global IoT solutions and services market can witness significant growth during the forecast period due to rising deployment of IoT across various industry verticals such as manufacturing, healthcare, retail, transportation and logistics. Furthermore, increasing investment by major technology players such as IBM Corporation, Microsoft Corporation, General Electric Company, Siemens AG, etc. to develop innovative IoT platforms and solutions can also drive the market growth.
Growing adoption of smart devices and connected technologies
Rising adoption of connected devices and smart technologies can drive the market growth. From basic smartphones to the latest smart watches and virtual assistants, people have increasingly brought connectivity into their everyday lives. Devices ranging from appliances to vehicles now have internet connectivity and the ability to communicate. This growing trend of connectivity has helped lay the foundation for the internet of things.
As devices becomes smart and sensing capabilities improves, more day-to-day products and infrastructure are gaining networked connectivity. Home automation has gained popularity, thus, allowing people to monitor and control lights, locks, thermostats and other systems remotely. Smart functionalities are making their way into other areas like healthcare with connected medical devices and sensors, smart cities through infrastructure monitoring, and supply chain management with track-able shipments and inventory. The desire for convenience and efficiency through smart connectivity compels both consumers and organizations to adopt IoT solutions.
Seamless communication between various smart endpoints has led to many applications involving device integration and data sharing. This has expanded the IoT ecosystem and infrastructure requirements. User expectations around personalization and predictive services have pushed companies to leverage the vast amounts of data generated through connected systems. The proliferation of smart devices and growing reliance on connectivity across sectors have established IoT technologies.
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Increased focus on automation and efficiency across industries
Rising focus across industries on driving operational efficiency, reducing costs and enhancing productivity through automation and data-driven insights can drive the market growth. Leveraging IoT technologies is seen as an avenue to achieve these strategic priorities. Continuous data collection from connected devices allows previously unobserved processes and assets to be monitored remotely. This improves visibility and provides invaluable performance metrics. Streaming data also enables detection of inefficiencies, downtime prediction as well as maintenance upgrades post-analysis. With IoT, idle capacities can be better utilized while unnecessary resource expenditure gets curtailed.
Automation of routine tasks optimizes labor deployment while minimizing human errors. For example, industrial equipment monitoring helps achieve predictive maintenance through sensors that track machine health. IoT-enabled smart transportation pilots reduced traffic congestion with sophisticated traffic light controls. Smart grids leveraged IoT to balance energy demands in real-time. In logistics, track-and-trace technologies help optimize deliveries and address issues proactively. The healthcare sector has deployed IoT to monitor patients remotely as well as streamline hospital operations through electronic records.
For instance, In March 2023, IBM, a global leader in technology and consulting services, introduced a new AI-powered Internet of Things (IoT) platform aimed at industrial applications. This innovative platform is designed to enhance operational efficiency by integrating AI capabilities with IoT data, enabling businesses to gain valuable insights and drive automation in their processes. The launch reflects IBM's commitment to advancing digital transformation across various industries through cutting-edge technology solutions.
Key Takeaways from Analyst:
Global IoT solutions and services market growth is driven by increasing adoption of connected devices across industries. The retail and manufacturing sectors have emerged as early adopters of IoT solutions and services, utilizing IoT for inventory management, predictive maintenance, and supply chain optimization. Further expansion into sectors like healthcare, energy, and transportation can drive the market growth. North America remains the largest market currently but Asia Pacific is expected to lead over the long term due to massive infrastructure investments and growing base of technology companies.
Security and privacy concerns surrounding IoT implementations can hamper the market growth as lack of proper safeguards could discourage adoption of IoT solutions and services. High initial deployment costs of enterprise IoT solutions and lack of skilled talent may also hamper short term spending.
Opportunities around IoT analytics, augmented reality/virtual reality integration and application enablement through low-code platforms can boost revenues for service providers. Ongoing 5G investments can boost IoT connectivity and open the door for new use cases.
Market Challenge - Security and privacy concerns associated with IoT devices
Global IoT solutions and services market growth can be hampered due to security and privacy concerns associated with various IoT devices. As IoT devices become more advanced and get connected to the internet, it raises several security and privacy issues. Large number of IoT devices have vulnerabilities that can be exploited by hackers to gain access to sensitive user data. Once compromised, these devices can be used to launch cyberattacks. Furthermore, personal and usage data collected by IoT devices often lacks proper anonymization, which can threaten user privacy. Lack of security updates also makes many older IoT devices vulnerable for a long time. The complexity of IoT ecosystems with different stakeholders also makes it difficult to pinpoint security responsibilities. If not addressed properly, such security and privacy risks associated with IoT can significantly limit adoption of these solutions among both consumers and organizations.
Opportunity: Expansion of 5G technology enabling faster IoT connectivity
Expansion of 5G telecom networks around the world provides a major growth opportunity for the global IoT solutions and services market. 5G technology delivers significantly higher speeds, lower latency and better reliability compared to existing 4G networks. This enables various new IoT use cases that require fast connectivity between devices in real-time. From smart factories to autonomous vehicles to remote monitoring in industries, 5G opens up possibilities for applications that rely on high-speed, low latency connectivity between large numbers of IoT devices. As 5G networks get deployed widely, it can boost adoption of IoT across more sectors. This can boost demand for IoT platforms, services and solutions required to develop and manage 5G-enabled IoT projects.
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Insights By Solution Type - Dominance of software segment in driving IoT solutions and services adoption
In terms of solution type, software segment is estimated to contribute the highest market share of 44.1% in 2024, owing to the pivotal role it plays in enabling the connectivity, operations, and data handling functions within IoT solutions. As hardware devices proliferate at the edge with the rise of connected things, there has been huge need for high-level software platforms and programming tools that can integrate these disparate endpoints and extract meaningful insights. This presents a massive opportunity for software vendors to develop applications and operating systems tailored for specific industries and use cases. Software segment encompasses areas like data management software, application development software, IoT programming frameworks, real-time analytics tools, and SDKs (Software Development Kits) that allow for quicker development of solutions. Increasing complexity of IoT deployments across industries requires robust yet user-friendly software layers that abstract away technical complexities.
For instance, In May 2022, HCL Technologies, a global technology corporation recognized for its expertise in the Internet of Things (IoT), announced its collaboration with SAP to develop industry-specific IoT packaged offerings and services. This collaboration aims to address the fragmented and complex solution stack that companies face during Industry 4.0 transformations. HCL Technologies plans to bundle relevant SAP software with associated services and hardware to expedite and simplify the implementation process for businesses.
Insights By Deployment Mode- Cloud-based segment gravitating IoT adoption by offering scalability and economies of scale
In terms of deployment mode, cloud-based segment is estimated to contribute the highest market share of 52.8% in 2024 as IoT solutions leveraging cloud infrastructure have significant advantages over on-premises models in the forms of scalability, manageability, anywhere access, and low upfront costs. As devices, endpoints, and data volumes expand exponentially, cloud deployment ensures IoT systems can grow seamlessly on-demand without extensive hardware procurement or management overhead. Cloud platforms provide automated tools to integrate, process, analyze and act on streaming IoT data with minimal effort. These also take care of critical aspects like security updates, backup/failover, and capacity planning transparently through pay-per-use models. This elasticity of cloud is well-suited to accommodating spikes in activity as well as supporting experimental Proof-of-Concepts before committing to costly on-premises rollouts. Cloud removes technological, financial and resource related barriers for organizations of all sizes to embrace IoT and trial innovative use cases.
Insights By Application- Industrial IoT segment accelerating as a cornerstone application domain
In terms of application, industrial IoT segment is estimated to contribute the highest market share of 31.6% in 2024. From improving productivity and quality to predictive maintenance to supply chain optimization, Industrial IoT solutions have helped transform industrial processes tremendously. Connected machines and ubiquitous sensor data allow real-time visibility, remote monitoring, automation, and consistency across geographically dispersed plants. Advanced analytics on this manufacturing data helps identify bottlenecks, wastage and inefficiencies proactively. Future-ready technologies like AI, computer vision, AR/VR are further enhancing productivity, safety and worker experience on shop floors. Transitioning to smart, connected factories improves competitive advantage, opens new revenue streams and helps meet the demands of Industry 4.0. These compelling benefits have made Industrial IoT the torchbearer for broader IoT uptake globally.
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North America has established itself as the dominant region in the global IoT solutions and services market with an estimated market share of 41.5% in 2024. With countries like the U.S. and Canada having a strong digital infrastructure backbone and early adoption of new technologies, many leading IoT players have set up their base in this region. Large number of innovative IoT startups are emerging from the Silicon Valley region, developing path breaking solutions across various sectors. The presence of technology giants like Microsoft, IBM, Cisco and Intel along with emerging players like Amazon has contributed towards North America becoming a hub for cutting edge IoT research and development. Furthermore, North America companies are quick to integrate IoT deployments across industries like manufacturing, healthcare, utilities and others to gain competitive advantage. The focus on digitization of processes along with high technology literacy makes North America an attractive market for IoT solution providers.
Asia Pacific, especially countries like China, India, Japan and South Korea, is expected to be the fastest growing region. Factors such as rising internet penetration, growing middle class population and government initiatives towards smart cities boosts IoT adoption. China, with its strong manufacturing base, has emerged as a global manufacturing hub and companies are increasingly using IoT in connectivity along the supply chain. Furthermore, several Chinese technology companies like Alibaba, Baidu and Huawei have significantly ramped up investments in IoT oriented technologies. In India, initiatives such as Digital India and Smart Cities boosts deployment of IoT solutions across sectors. Both countries have started developing indigenous IoT platforms and technologies as well. Other Asia Pacific countries are also proactively working towards building connected infrastructure to power their digital economies of future. The presence of a massive consumer base and emergence of new use cases makes Asia Pacific an attractive market for all IoT participants.
IoT Solutions and Services Market Report Coverage
Report Coverage | Details | ||
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Base Year: | 2023 | Market Size in 2024: | US$ 286.35 Bn |
Historical Data for: | 2019 to 2023 | Forecast Period: | 2024 to 2031 |
Forecast Period 2024 to 2031 CAGR: | 18% | 2031 Value Projection: | US$ 913.67 Bn |
Geographies covered: |
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Segments covered: |
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Companies covered: |
Cisco Systems, Inc., IBM Corporation, Microsoft Corporation, General Electric Company, Siemens AG, Intel Corporation, Oracle Corporation, Honeywell International Inc., Bosch Group, SAP SE, PTC Inc., Vodafone Group plc, Qualcomm Technologies, Inc., Schneider Electric SE, and Dell Technologies Inc. |
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Growth Drivers: |
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Restraints & Challenges: |
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*Definition: Global IoT solutions and services market provides companies with end-to-end IoT solutions and services to connect devices to cloud platforms and applications. It helps organizations develop IoT strategies, select the right connected devices and sensors, integrate IoT solutions with existing IT systems, ensure the security of connected devices and data, and manage and maintain IoT infrastructure. The services enable businesses to extract meaningful insights from IoT data to optimize operations, improve customer experiences and launch new data-driven products.
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About Author
Suraj Bhanudas Jagtap is a seasoned Senior Management Consultant with over 7 years of experience. He has served Fortune 500 companies and startups, helping clients with cross broader expansion and market entry access strategies. He has played significant role in offering strategic viewpoints and actionable insights for various client’s projects including demand analysis, and competitive analysis, identifying right channel partner among others.
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