ISG Provider Lens™ IoT - Services and Platforms - U.S. 2020 - Smart Buildings
The IoT market has evolved over the years, spanning across technologies, services and activities. Big data analytics, platform selection and adoption, agile implementations, scalability and flexibility to 5G and cybersecurity all together form the connected ecosystem. With the rapid pace of innovation, technologies have no bounds and the internet of things (IoT) also has expanded beyond regular tasks. Digital twins, customized solutions, artificial intelligence (AI), augmented reality (AI), virtual reality (VR), autonomous cars, smart homes and smart workplace are among the revolutionary advances across technologies and industries. Today, IoT is a part of the digital transformation journey that most enterprises are embarking on, strongly driven by technology providers. Business optimization, operational efficiencies, cost reduction and remote operations are some of the main targets that clients want to achieve with their service providers, but the collaboration has expanded beyond regular norms. Creating business value and enhancing experience have been the highlights for IoT providers across industries and geographies, and their journey has been collaborative for achieving new targets every day.
IoT is the key driver of a connected or smart ecosystem. A connected factory, building, home, car, office, process or operation is considered smart if it is infused with IoT elements. This market comprises service providers (SPs), system integrators (SIs), vendors, technology providers, software providers, hardware providers, network providers, security providers and others that are working cohesively to support one connected implementation or deployment to improve and optimize a business.
Enterprise clients are forward looking; they do not want just a service provider but also a partner that would co-create and co-innovate new ways of optimizing business and commit to a continuous relationship to improve the existing models. Cost reduction, positive returns on investment, reduced risks and easy data transfer from their legacy systems are the regular outcomes that are expected from IoT deployments. However, enterprise clients are interested in partnership-based engagements with service providers, where collaboration would enable technology integration and more business-focused outcomes.
Partnerships, mergers and acquisitions (M&As) and facilitate comprehensive collaboration for building a strong connected ecosystem. Providers understand the need to strengthen their existing digital portfolios with the right partners. Enterprises are exploring partnerships and M&As in the IoT space in order to assess the capabilities that would give them a competitive edge. Partnerships today have moved beyond software, hardware, platforms, etc. and are focused more on technology, innovation and expertise.
The convergence of IoT with blockchain, AI and edge computing is the future. Enterprise clients have been investing in at least one of these technologies as part of their IoT investments. AI provides the intelligence from IoT-derived data, while blockchain offers secure data transactions through its decentralized framework. Edge analytics enables real-time data visualization and predictive maintenance for IoT devices.
Cybersecurity is gaining importance but still lacks a comprehensive framework for IoT adoption. The lack of a suitable security framework is a barrier to deployment. Ensuring secure data transfer and payment transactions are major challenges in the IoT ecosystem. By combining an IoT solution with blockchain and edge processing technologies, instances of such vulnerabilities can be minimized. However, the risk remains high in IoT systems, as the data set is large.
The connected ecosystem has been adopted in various industry verticals. The impact varies with the rate of adoption in each of these industries, but the technological evolution and rate of returns have been impressive. R&D is intensifying every day and the investments in technologies are mounting high given their significant impact on business outcomes. ISG tracks a few key industry verticals of manufacturing, connected vehicles and smart buildings and how has it been impacted by IoT and its expansion in the U.S market.
Manufacturing
IoT has been making waves in the manufacturing industry space. With the Industry 4.0 revolution, digital transformation is being achieved across the value chain for manufacturers, giving them fast and favorable returns. There are multiple touch points, where manufacturing IoT plays its role in bringing transformational changes. The operational areas of asset management, smart manufacturing, performance tracking and optimization are some of the key areas of digital transformation. IoT covers more than 50 percent of the investments in the manufacturing space. Different areas of manufacturing use cases fall under asset monitoring, maintenance and efficiency enhancements. The development of enhanced products and services also drive efficiency and profits. Worker safety and protection is another area where IoT can improve the ways of working and enhance productivity. Improvement in the quality of the work environment, facility management, risk assessments, and use of connected and safety applications have made positive shifts in modulating the working experience across factories. Increased labor productivity has enabled U.S.-based manufacturers to improve their overall operational performance by all most three times. The U.S. smart factory market has been gaining traction and driving the implementation of smart factory solutions.
Smart Buildings
Significant investments are being made in smart monitoring for both consumer and commercial buildings across the U.S. Most homes in North America have at a least one IoT device and a growing number of residences are installing two or more devices. Commercial buildings are expected to see rapid growth in this space over the next five years. Offices are already benefitting from smart systems to boost performance and productivity. Managing cost without compromising the comfort and capabilities of big multistory buildings is one the biggest business benefits of adopting smart equipment and devices. Service providers are working on more effective customized solutions to optimize the performance and reduce wastage/cost for buildings. ISG has identified some leading providers in the smart buildings space in the U.S. The incorporation of devices and sensors in buildings and their usage management have helped building owners and management companies handle commercial real estate more efficiently. On the consumer side, increased device connectivity and its interaction through consumer mobile interfaces help improve mobility and ease of use of appliances. The convenience of using interactive devices has been a key enabler for more users to adopt IoT for device management.
Connected Vehicles
The connected vehicles market is growing globally, driven by investments from service providers and technology providers. The U.S. government, especially, has articulated the need and importance of autonomous vehicles. Developing IoT technology is critical for driving the shift toward a network of connected transport systems. This in turn enables a seamless production of autonomous vehicles. Electric vehicles (EVs) are also making headway in the connected vehicle space owing to their environmental benefits. The U.S. connected car market has seen a boom in the demand and adoption of advanced driver assistance systems (ADAS) solutions. Car manufacturers, automotive OEMs and services providers are increasingly engaged in developing connected solutions. The number of embedded solutions as well as connected and integrated solutions for smart/connected passenger cars has increased significantly over the years. Similarly, the use of telematics and fleet management solutions for connected commercial vehicles has also seen a spike. Usage-based insurance, vehicle diagnostics and security and over-the-air (OTA) updates enable consumers and manufacturers to increase efficiency and make some gains. OEMs are trying to differentiate themselves by offering a range of advanced features in infotainment and navigation systems. There is also a rise in the adoption of cloud technologies and IoT in this market.
COVID-19 impact – IOT Before and After Pandemic
This study was launched before the pandemic. Businesses were forced to adapt to the crisis and quickly implement measures to protect their services and ecosystem. Production in factories has been hampered as human touchpoints were minimized. As network communications expanded, security systems became increasingly difficult to upgrade. Service providers across the globe quickly rose to the challenge by providing solutions and services that ensure business continuity. Healthcare and life sciences have become the hub of innovation as hospitals and healthcare providers need to expand their facilities and services. Remote monitoring and treatment have also become crucial. The use of electronic or wearable devices such as mobiles, smart watches, fitness bands is on the rise for patient monitoring and treatment. The need for a connected infrastructure, buildings and cities for improving public health and safety has increased. The Internet of Things Consortium (IoTC), a business development association for IoT, announced that it would add connected health and well-being to its core areas.
The pandemic has driven other drastic changes such as the need for greater mobility and an uptick in digital payments. Supply chains, production lines, factories, solutions and services across the connected ecosystem are also being revolutionized. The use of sensors is on the rise to track, trace and manage device and data management across the supply chain. AI, AR, VR and digital twin models are put to stringent tests to deliver new norms of technology and solution interactions. Automation, robotics and 3D printing technologies are used to augment client business across the value chain of connected ecosystems.
Service providers have responded quickly and effectively to address the threats of the pandemic across various industry verticals. They have started offering COVID-19 ready solutions and services to support clients’ businesses with minimum costs and efforts involved but also with expanded functionalities and outcomes. IoT, with the power of AI, helps clients across the globe to reset their businesses. Threat management, change management and business continuity planning (BCP) have become more essential than ever.
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