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IoT Professional Services Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

IoT Professional Services Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

  • March 2022
  • 155 pages
  • ID: 6246236
  • Format: PDF
  • Mordor Intelligence LLP

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The global IoT Professional services market is estimated to be around USD 113.82 billion in 2021, and it is projected to reach USD 321.11 billion by 2027, registering a CAGR of 19.51% during the period 2022-2027.

Key Highlights
Smart city initiatives are expected to spearhead IoT growth over the coming years. IoT devices and systems as part of transportation, utilities, and infrastructure are expected to increase. Government initiatives and drives in line with this are expected to boost the adoption rates of IoT devices leading to more organizations relying on professional services for deployment and further managing.
For instance, the European Union directive required all EU member states to roll out smart electricity meters to 80% of consumers by 2020. Due to such developments, the countries are increasingly adopting smart metering solutions. For instance, according to the Department for Business, Energy & Industrial Strategy, in the United Kingdom, at the end of Q3 2021, there were 26.4 million smart and advanced meters operating in homes and small businesses across Great Britain, with 21.6 million of all meters operating in smart mode. This indicates the increasing dependency on deployment services for IoT devices.
Global connectivity initiatives by various governments are pushing the adoption rates of IoT. For instance, Horizon 2020, one of the biggest EU research and innovation programs, with EUR 80 billion funding between 2014 and 2020, has a huge impact on technological developments in Europe. As part of the project launch of e-sim, developing interoperability with technologies, such as Sigfox, LoRa, NB-IoT, and LTE-M, was undertaken. Such initiatives by governments are influencing the IoT market positively, creating an ancillary demand for professional services.
With the advent of 5G, the global number of IoT in consumer and industrial space is expected to increase significantly, creating new avenues of growth for IoT professional services. According to Ericsson, in 2020, the 5G device volumes are expected to reach 160 million. By 2025, the 5G subscription base is expected to reach 2.6 billion and cover up to 65% of the population, generating 45% of the global total mobile data traffic.
The addition of several devices, like IoT, increases the surface area of a network, thereby creating more potential attack vectors in the process. Even a single unsecured device connected to a network may serve as a point of entry for an active attack on the network. Data security concern has, thus, presented itself as a significant challenge as players navigate to strengthen their security offering to gain customer confidence and prevent breaches.
Due to the COVID-19 outbreak, the global supply chain and demand for electronics are disrupted, owing to which the IoT market hardware adoption is expected to be severely influenced until the end of 2020. This has directly impacted the demand for deployment services that are connected to the installation of IoT devices. Due to the production shutdown in countries like China, the electronics industry observed a shortage of electronics supply during February and March of 2020.

Key Market Trends

Proliferation Of Connected Devices Across The World Is Driving The Growth Of The Market

The growing trend of adopting connected devices in the industrial sectors is positively influencing the market studied. According to Ericsson, the number of massive IoT connections is expected to have doubled, reaching close to 200 million connections. According to Ericsson, by the end of 2027, 40% of cellular IoT connections will be broadband IoT, with 4G connecting the majority. However, with the introduction of 5G New Radio (NR) in the old and new spectrum, throughput data rates are expected to increase substantially for this segment.
Emerging applications and business models and falling device costs have been instrumental in driving IoT adoption, consequently increasing the number of connected devices and endpoints globally. The massive IoT technologies NB-IoT and Cat-M1 continue to be rolled out globally. The Massive IoT technologies are anticipated to comprise 51% of all cellular IoT connections overtaking broadband IoT cellular connections.
In the industrial sector, the adoption has penetrated across industries. For instance, according to Aruba Networks, IoT devices have become increasingly pervasive, with 85% of businesses expected to have implemented the technology.
Moreover, the benefits offered by IoT in reducing cost, predictive maintenance, and data analytics are driving the adoption rates in the industrial segment. According to a recent Forbes study, almost 94% of the executives surveyed mentioned that IoT has helped or will help boost their annual profits by at least 5% to 15%.
The survey mentions 60% of enterprises are expanding their business through IoT, 36% of enterprises are considering potential new business directions, and 63% of enterprises are already delivering new or updated services through IoT. The demand for IoT solutions is expected to increase even further over the forecasted period due to the growing adoption rate of connected devices across industries.

North America is Expected to Hold the Largest Market Share

The region is home to some of the major players in the telecom industry, such as AT&T, IBM, General Electric, and many more, which are continuously investing in building up and advancing their infrastructure to keep pace with technological advancements. This is expected to boost the adoption of IoT professional services over the forecast period.
Fast and secure 5G connectivity is expected to accelerate the adoption of IoT devices allowing agile operations and flexible production. This technology is anticipated to facilitate automated assembly, automated warehouses, connected logistics, packing, and product handling, and the use of autonomous carts. Moreover, awareness about IoT and digital solutions in industries is significantly higher in the region compared to others. According to a study by Mendix in March 2021, 78% of the US manufacturing workers welcome digitalization; in addition, eight in ten manufacturing workers are interested in learning new digital skills.
Additionally, with smart grids envisioned to take over the entire energy industry in the country, the IoT utilities are expected to gain traction over the forecasted period. For instance, Landis+Gyr, which specializes in smart meter deployments, and Cisco’s Catalyst routers for IoT are helping companies manage their grids and collect and make sense of very large volumes of data. The latest line of 5G industrial routers will give utilities an offering that can support the next 15-20 years of an endpoint’s life.
The popularity of IoT devices, combined with tax incentives and home insurance discounts, has encouraged both the consumers and the utility companies to take steps to make their services smart and suitable for the new age of home builders and owners and to remain competitive in such an evolving market. According to Institute for Electric Efficiency, 115 million smart meters are expected to be deployed by the end of 2021 in the United States. This is an increase of 108 million units compared to 2007. With the increasing installation of smart meters, the tendency for IoT services adoption might increase significantly during the forecast period.
According to the Rogers Telecommunication, ReadWrite, and the Manifest, in 2020, 81% of Canadian businesses were using some form of IoT systems, and up to 55% of Canadian companies planned to increase their internet of things investments in a year’s time and had 20 million IoT devices shipped. With the growing digitalization and usage of connected devices in business and industry, it is anticipated that IoT applications and sales will be increasing in the region. As the business moves towards digitalization and IoT-based products, professional services such as deployment and consulting are bound to increase in the region.

Competitive Landscape

The competitive rivalry in the IoT professional services market remains high owing to the presence of some key players in the market, such as Vodafone, At&T, GE, amongst others. Their ability to innovate their offerings through extensive research and development activities has allowed them to gain a competitive advantage over others. The players in the market, through strategic partnerships and mergers and acquisitions, have gained a stronger footprint in the market.

February 2022 - Boingo Wireless, a total connectivity provider of distributed antenna systems (DAS), Wi-Fi, and private network, announced its partnership with Qualcomm Technologies, Inc and the Qualcomm Smart Cities Accelerator Program ecosystem to streamline the deployment of IoT devices for venue and enterprise customers leveraging the Qualcomm IoT Services Suite.
October 2021 - Tata Consultancy Services announced a partnership with AIS, Thailand’s largest telecom operator, to enable manufacturers to adopt IoT solutions based on 5G smart network technology. The collaboration integrates AIS’ leadership in telecommunications services in Thailand and TCS’ extensive portfolio of intellectual property and expertise in IT consulting to help Thai enterprises accelerate their growth and transformation using TCS’ 5G-enabled IoT offerings.

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