The internet of Things (IoT) is progressively gaining momentum throughout the Middle East and Africa (MEA).
And this momentum is helping to realign productivity across the region, particularly in the Middle East, where the continuous fall in oil prices is causing governments and businesses to cut their spending budgets.
IoT is defined as the network of devices that are connected to the internet and can be controlled remotely.
Despite these new restrictions (or perhaps more pertinently because of them), governments and businesses are looking to diversify their investments into long-term smart technology initiatives that will help enhance their competitive advantage and improve their levels of customer satisfaction. This objective has meant that IoT spending has been largely resilient to the growing budget cuts currently sweeping across other areas of the economy.
Indeed, a number of industries across MEA are increasingly directing their investment focus towards developing innovative IoT-based solutions that can simplify complex business processes. IDC’s latest spending guide shows that the industries currently undertaking the highest levels of IoT investment are manufacturing, transportation, utilities, and government.
We expect IoT spending on manufacturing-related processes in MEA to grow 16 per cent year on year in 2016 to total $1.22 billion, with processes such as food traceability, maintenance and field services, manufacturing operations, and production asset management being particularly ripe for investment. A related factor driving this growth is the continuous demand for fast-moving consumer goods in the region, which incentivises manufacturers to invest heavily in efficiency-building smart technologies to further improve their levels of productivity.
In the transportation vertical, we are seeing efforts to simplify a range of transport-related activities such as air traffic monitoring, freight monitoring, and fleet management. There is also an unrelenting drive to introduce automation across all facets of the industry and to develop innovative end-to-end transport solutions aimed at improving the user experience, reducing costs, and mitigating risk, loss, and theft.
In light of these considerable benefits, IDC expects IoT-related spending on transportation services in MEA to reach $883.15 million in 2016, up 20 per cent year on year.
A number of countries in the MEA region are being challenged to meet growing demands for power in order to facilitate the expansion of various different business sectors. And at the same time, the advocacy surrounding sustainable and clean energy today is spurring growth in smart utilities investments.
As a result, we are seeing an increase in the deployment of so-called Smart Grids (both for electricity and gas) due to the energy management improvements that they provide. Such investments will see IoT spending related to utilities in MEA increase 14 per cent year on year in 2016 to total $647.94 million.
Numerous governments across MEA are undertaking efforts to improve their infrastructure and enhance the quality of life enjoyed by their citizens. This has led to an increase in demand for the innovative technologies required to efficiently provide, monitor, and manage the growing number of public assets and services that residents increasingly take for granted.
This is particularly true around citizen-centric solutions such as environmental monitoring detection, public infrastructure asset management, public safety and emergency response, and intelligent transportation systems, and demand for such solutions is expected to drive an 11 per cent year-on-year increase in IoT spending by MEA governments in 2016 to $455.21 million.
Organisations across the vertical spectrum will inevitably encounter a number of challenges as they look to push the IoT concept, chief among them being the well-entrenched reluctance to change. However, overall growth is set to become ever more dependent on the ability of an organisation to rapidly respond to market changes in an agile manner. As a result, success will come to those organisations that make use of innovative products, services, processes, and business models to stay ahead of change, create new markets for their products and services, and secure a competitive advantage.
Telecom operators are at the forefront of this innovation drive but continue to face declines in their voice revenues due to the growing use of over-the-top (OTT) services such as Skype and WhatsApp.
In order to spur the desired increase in revenues, IDC urges the region’s telecom operators to strategically align with purpose-built IoT platforms to offer best in-class products and services that improve the customer experience.
IoT solutions also generate enormous amounts of data, which could then be used for market intelligence purposes, with providers using data analytics solutions to further understand customer preferences. The opportunities are genuinely myriad.
Ultimately, the use of innovative IoT solutions will inform new trends, spur the introduction of new products and services, and enhance customer management capabilities. It will also lead to leaner operational models that will facilitate a wider spectrum of unique customer-inspired propositions.
It sounds like a win-win for all concerned, and that’s why the growth of the internet of Things will continue to defy the downturn.
The columnist is group vice-president and regional managing director for the Middle East, Africa and Turkey at global ICT market intelligence and advisory firm International Data Corporation (IDC) He can be contacted via Twitter @JyotiIDC