ISG Provider Lens™ Internet of Things - Services and Solutions - Global Summary Report - August 2021
GLOBAL MARKET TRENDS
Global IoT managed services market likely to be driven by the growing popularity of managed cloud services
The IT industry is transitioning from traditional hosting to cloud hosting. This fuels the rise of managed cloud services. Many organizations are still unaware or not able to exploit the full potential of the cloud. Cloud service is a major trend in the outsourcing services market. Managed anything as a service (XaaS) is a large focus area for managed service providers (MSPs) as they typically deliver via cloud infrastructures. Cloud and IoT are highly correlated as the IoT components are often not designed to have a self-storage element; thus, the data generated must be stored in the cloud. As a result, IoT MSPs are adopting cloud platforms to deliver their services to organizations.
Increased demand for enhanced user comfort, safety and convenience
The increased implementation of advanced driver assistance systems (ADAS) for enhanced levels of safety is a key growth driver for the connected car market. Governments across regions, especially Europe and the U.S., are mandating various ADAS and safety related connected car features. As a result, the overall demand for connected cars has surged.
COVID-19 impact on IoT security market
With the growing trend of the remote work model in light of the COVID-19 outbreak, organizations are increasingly adopting the bring-your-own-device (BYOD) approach. As workplace devices are potentially vulnerable due to the lack of efficient security solutions, the demand for endpoint security has increased during the period of nationwide lockdowns. Furthermore, the pandemic has pushed the demand for managed IoT security services to safeguard organization and employee data.
Rapid increase in the number of intelligent applications
Enterprises are increasingly adopting edge AI software to support critical AI applications such as autonomous vehicles and robotics. Furthermore, the significant increase in the use of wearable devices is a potential factor that will promote the expansion of the software as they require processing on the go and cannot rely on remote cloud services. With the extension of IoT sensors to more devices and the need for quicker decision making, edge AI is likely to gain substantial market traction in the coming years.
Growing demand for IoT-enabled digital transformation of enterprises
IoT, a crucial digital transformation technology, allows companies to improve their operational efficiency. Big data analytics, cloud computing and edge computing are just some of the technologies that drive demand for enterprise digital transformation. Service providers that offer IoT consulting have been forced to retool their current IoT service offerings due to the increased need for digital transformation. The growing usage of advanced technologies enables enterprises to opt for IoT-based digital transformation. Retail, agriculture, manufacturing, transportation and healthcare are some of the main verticals that are undergoing this shift. Smart retail, smart manufacturing and connected health are key applications in these verticals, further driving enterprises to opt for IoT-based digital transformation.
IT/OT convergence becoming mainstream in enterprises
The digitization of industrial control systems (ICS) and the revolution in operational technology (OT) are diminishing the reliance on human resources in the manufacturing industry. IT and OT security capabilities are merging into a unified monitoring environment that promptly detects anomalies and thus facilitates data protection. Security is expanding beyond the IT sector into various other domains including OT. These changes bring various benefits such as reduced order fulfillment cycles, more sustainable production processes and better product quality. In addition, vendors are driving the concept of integrating an overall monitoring system across the entire IT/OT value system without interfering with devices.
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