COVID-19 to drive ANZ IoT spending past $14bn in 2021

Internet of Things (IoT) spending in Australia and New Zealand is forecast to surpass US$14.3 billion in 2021, with an annual growth rate of 10.4%, according to data from the IDC. The figures indicate a gradual and ready recovery of the A/NZ IoT market in 2021, with IoT spending across A/NZ reaching a compound annual growth rate (CAGR) of 9.5% over the forecast period through to 2025. Rising demand for smart devices, digital infrastructure, automation, and growing government initiatives will drive this growth.

Hugh Ujhazy, VO of Telecom and IoT in APEJ, noted that 2020 was a volatile year around the world, with organisations and individuals adapting to COVID-19 and adjusting how they worked and lived. Ujhazy added that these events highlighted the need for accelerated digital transformation, with IoT-based use cases helping to deliver remote and distributed operations across the enterprise.

“Though the pandemic caused temporary slowdown in IoT investments, we expect transformation initiatives to pick up pace as enterprises look to become more resilient and thrive despite the pandemic,” Ujhazy said.

Industries that are asset-rich, device-rich and physically intense such as manufacturing, utilities, and transportation, have been the largest source of IoT spending in A/NZ, accounting for more than 50% of the overall IoT spending. IoT spending by the construction and utilities sector is growing the fastest in 2021, driven by the lifting of restrictions on construction sites and increased digitisation of utility transmission and distribution networks.

Sharad Kotagi, Market Analyst at IDC Asia/Pacific, said that other than Cloud and AI/ML, IoT or Industrial IoT is one of the top three technologies which will enable remote operations for enterprises, thereby improving productivity during these challenging times.

“As per IDC’s Future Enterprise Resiliency and Spending Survey (Wave 4), a large majority of A/NZ enterprises indicated growing inclination to invest in IoT related projects in next 12 months, pointing towards a healthy growth in future,” Kotagi said.

IoT use cases that see the highest spending in 2021 are related to host industries such as manufacturing operations, production asset management, smart grid (electricity), and freight monitoring. These use cases will make more than one-third of the overall IoT spending in A/NZ. The use cases forecast to see the fastest spending growth in 2021 are healthcare use cases such as bedside telemetry and use cases, reducing human interactions like advanced payment/shopping and maintenance & field service.

The IoT services market is predicted to be the most significant technology group in 2021, through to the end of the forecast. Industrial implementation and other ongoing services will lead IoT spending. Together, these two categories will account for a third of all IoT spending. Software will be the second-largest technology group in 2021 and the fastest growing technology category, with a five-year CAGR of 11.3%, focusing on application and analytics software purchases. Software spending is followed by hardware spending in 2021, driven by purchases of modules and sensors.

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