The internet of things (IoT) market in the Middle East and Africa (MEA) region is forecast to defy the region’s economic outlook by growing 19.6 percent year-on-year in 2017 to total USD 7.8 billion, according to a recent update from International Data Corporation (IDC). This compares favorably to the 18.1 percent growth seen in 2016, with IDC attributing the market’s performance to the proliferation of digital transformation initiatives across the region as businesses and government entities strive to boost productivity and improve efficiency.
“The MEA IoT market is becoming increasingly competitive, enabling organizations to source a range of innovative digital solutions aimed at transforming business operations, improving the customer experience, and enhancing employee engagement. IoT now offers a myriad of industry-specific solutions that can be easily deployed by organizations in a bid to stay ahead of competition,” said Wale Babalola, Research Analyst for Telecommunications, IoT, and Digital Media at IDC MEA.
IDC expects the manufacturing, transportation and utilities industries to see the highest levels of IoT-related spending in 2017 as organizations across these verticals look to digitalize their operations and improve their value proposition across different lines of business. “The commitment of service providers, application developers, and OEMs to developing purpose built end-to-end IoT solutions is serving as a major driver of the growing adoption we are seeing across the region,” he added.
Manufacturing organizations will lead the way in 2017 with IoT-related spending of USD 1.3 billion for this vertical. The ‘manufacturing operations’ use case will account for more than 51 percent of this investment. ‘Manufacturing operations’ is an IoT use case that supports digitally-executed manufacturing and the way in which manufacturers use intelligent and interconnected I/O (input output) tools (sensors, actuators, drives, vision/video equipment) to enable different components in the manufacturing field (machine tools, robots, conveyor belts) to autonomously exchange information, trigger actions, and control each other independently.
The transportation industry is also forecast to see IoT-related spending of around USD 1.3 billion in 2017. The ‘freight monitoring’ use case is expected to account for USD 849 million of this figure, which aptly highlights the increasing importance of monitoring goods and improving productivity. The use of IoT for freight management purposes (air, railroad, land or sea) is based on RFID, GPS, GPRS, and GIS technology to create intelligent, internet-connected transportation systems.
These systems perform intelligent recognition, location, tracking and monitoring of freight and cargo by exchanging information and real-time communications via wireless, satellite and other channels.
IoT-related spending by MEA utilities will reach USD 918 million in 2017, with investments around ‘smart grid’ technologies to account for more than 82 percent of this total. Smart grids are rapidly gaining traction across the region as municipalities increasingly see the value proposition in deploying related solutions in an effort to efficiently distribute resources to their respective end customers.
“Numerous smart city projects are already underway across the region, and the propagation of such initiatives will continue to fuel IoT adoption by both public and private sector organizations. Saudi Arabia and the UAE are leading the charge when it comes to smart cities, so it makes sense that these two countries will account for the highest contributions to overall IoT investment in MEA during 2017, with a combined value of more than USD 1.6 billion,” said Mr Babalola.
IDC’s 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.
