The European companies and organizations will invest this year 227,000 million of dollars in Internet of Things technology. This is pointed out by IDC, a consultancy that also points out that during the next five years, investment in IoT in the area will continue to grow, with an annual growth rate of 11%. As a result, in 2027 the investment in IoT in Europe will touch the 345,000 million dollars.
The development of the Internet of Things in Europe is a sample of the evolution of the investment objectives in digital transformation of companies to achieve a greater reduction in costs, improve the user experience, optimize processes and improve automation. However, there are differences between the different European markets.
Thus, it can be seen that the investments of companies and organizations in Central and Eastern Europe are significantly below the average for the European market, with increases in investment below 10% until 2027. In the last three years they have been frozen a lot of investment in the area, due to all kinds of difficulties related first to the pandemic and then to the war in Ukraine and the pressures of the macroeconomic environment.
Despite everything, as the Internet of Things has proven to be very important for cost reduction, automation, process optimization and improvement of management and monitoring capabilities, IDC expects investments in the area to accelerate towards 2027. .
From the perspective of the industry sector, investment in Europe in IoT will be driven by investments from entities related to manufacturing, utilities and professional services. Prominent use cases will include manufacturing asset management, distribution automation and smart building infrastructure. The fastest adoption of IoT will be in use cases such as irrigation management in the resource sector, and fleet management in transportation.
In terms of technology, sensors and modules will continue to drive up IoT-related investment. They are followed by related services, such as industrial maintenance to support the continuous operation of hardware devices, process outsourcing services in vertical sectors, infrastructure as a service and data as a service.
Low Power Wide Range Networks (LPWANs) will see the fastest growing investment and will become a critical IoR sector for telecom providers in the coming years. Investment in analytics software will grow as well, as businesses will increasingly need to turn data collected by connected endpoints into actionable insights.
According to Alexandra Rotaru, Research Analyst in IDC’s European Data & Analytics team«Due to the uncertain macroeconomic context, European organizations are expected to continue to feel a lot of pressure in terms of budgets, with further investment constrained in the short to medium term. However, the Internet of Things will continue to be a critical tool for improving performance and efficiency, as well as increasing automation capabilities. It will continue to be a key area of investment, helping organizations reduce costs and improve productivity despite challenges.«.
