Middle East & Africa IoT Spending to Reach $7.8 Billion in 2017 as Digital Transformation Initiatives Gain Traction Across the Region
18 Jan 2017
Dubai – The Middle East and Africa (MEA) internet of things (IoT) market is forecast to defy the region's moderate economic outlook by growing 19.6% year on year in 2017 to total $7.8 billion, according to a recent update to the Worldwide Semiannual Internet of Things Spending Guide from International Data Corporation (IDC). This compares favorably to the healthy 18.1% 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," says Wale Babalola, research analyst for telecommunications, IoT, and digital media at IDC MEA. "Indeed, IoT now offers a myriad of industry-specific solutions that can be easily deployed by organizations in a bid to stay ahead of competition.
"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."
Manufacturing organizations will lead the way in 2017, with IDC forecasting IoT-related spending of $1.3 billion for this vertical. The 'manufacturing operations' use case will account for more than 51% 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 (e.g., sensors, actuators, drives, vision/video equipment) to enable different components in the manufacturing field (e.g., 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 $1.3 billion in 2017. The 'freight monitoring' use case is expected to account for $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.
IDC forecasts IoT-related spending by MEA utilities to reach $918 million in 2017, with investments around 'smart grid' technologies to account for more than 82% 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," says Babalola. "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 $1.6 billion."
IDC's Worldwide Semiannual Internet of Things Spending Guide forecasts IoT revenues for 12 technologies and 47 use cases across 20 vertical industries in 8 regions and 52 countries. Unlike any other research in the industry, the comprehensive spending guide was designed to help vendors clearly understand the industry-specific opportunity for IoT technologies.
About IDC Spending Guides
IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC.
IDC in the Middle East, Africa, and Turkey
For the Middle East, Africa, and Turkey region, IDC retains a coordinated network of offices in Riyadh, Casablanca, Nairobi, Lagos, Johannesburg, Cairo, and Istanbul, with a regional center in Dubai. Our coverage couples local insight with an international perspective to provide a comprehensive understanding of markets in these dynamic regions. Our market intelligence services are unparalleled in depth, consistency, scope, and accuracy. IDC Middle East, Africa, and Turkey currently fields over 130 analysts, consultants, and conference associates across the region. To learn more about IDC MEA, please visit www.idc-cema.com. You can follow IDC MEA on Twitter at @IDCMEA.
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