Internet of Things Market in Central and Eastern Europe to Boom Through 2020, Led by Transportation, Manufacturing, and Utilities Investments, According to IDC
07 Feb 2017
FOR IMMEDIATE RELEASE, Prague — Spending on the Internet of Things (IoT) in Central and Eastern Europe (CEE) has reached an astonishing $11 billion in 2016 as organizations accelerated their investments in the hardware, software, services, and connectivity that enable the IoT. According to a new update to the Worldwide Semiannual Internet of Things Spending Guide from International Data Corporation (IDC), IoT revenues in the CEE region will post a compound annual growth rate (CAGR) of 21.5% over the 2016‒2020 forecast period, reaching $24 billion in 2020.
The CEE industries leading the way in IoT investments are transportation, at $2.3 billion in 2016, followed by manufacturing at $2.1 billion and utilities at $1.2 billion, as organizations across these verticals look to digitalize their operations and improve their value proposition across different lines of business. In addition, the consumer segment will rank among the top sources of IoT spending throughout the five-year forecast. The industries that will record the fastest spending growth in CEE are insurance, construction, transportation, and cross-industry IoT investments, which represent use cases common to more than one industry, such as connected vehicles and smart buildings.
Given transportation's position as the leading IoT industry, it is no surprise that freight monitoring is the IoT use case forecast to represent the largest investment ($1.6 billion) in 2016, which aptly highlights the increasing importance of monitoring goods and improving productivity. Manufacturing operations, the second-largest use case in CEE ($1.0 billion), which supports digitally executed manufacturing, will account for much of the IoT spending in the manufacturing industry. Other IoT use cases being deployed in manufacturing include production asset management and maintenance and field service. In the utilities space, combined investments in smart grids for electricity and gas will total $1.1 billion in 2016. Investments by consumers in smart homes will more than double over the forecast period, exceeding $1.1 billion by 2020. In the insurance industry, telematics will be the leading use case, while construction machinery management will see the greatest investment in the construction industry. Retail firms are already investing in a variety of use cases, including connected vending machines and in-store contextualized marketing.
"Businesses and government organizations in the CEE region, as well as consumers, are now familiar with the IoT concept and will invest significant amounts on IoT solutions, making the market potential highly attractive for the vast ecosystem of technology vendors," says Milan Kalal, program manager of Internet of Things research with IDC CEMA. "Moreover, our annual survey among IoT decision makers across CEE shows that a high number already have an existing IoT solution in place and plan to expand it during the next two years to increase the impact on their business activities."
From a technology perspective, services will remain the largest spending category throughout the coming years, followed by hardware, software, and connectivity. And while services spending will more than double over the five-year timeframe, it represents the slowest growing IoT technology group. Hardware and software spending will both grow faster than services and connectivity, although services spending will approach $7 billion by 2020. Modules and sensors, that connect end points to networks, will dominate hardware purchases, while application software will represent more than one half of all IoT software investments.
The Worldwide Semiannual Internet of Things Spending Guide forecasts IoT investments into 12 technologies and 49 use cases across 20 vertical industries in eight regions and 52 countries. Unlike any other research in the market, the comprehensive spending guide was designed to help vendors clearly understand the industry-specific opportunity for IoT technologies today.
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.
For more information, contact:
Milan Kalal (CEE)
Senior Marketing Manager
ContactFor more information, contact: