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 reach $7.8 billion, according to forecasts by the International Data Corporation (IDC).
The ICT consulting and advisory services firm says this compares favourably 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 organisations 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 organisations in a bid to stay ahead of competition."
IDC says the manufacturing, transportation and utilities industries will see the highest levels of IOT-related spending in 2017 as organisations look to digitise their operations, says Babalola. The commitment of service providers, application developers and original equipment manufacturers to developing purpose built end-to-end IOT solutions is serving as a major driver of the growing adoption across the region, he adds.
Manufacturing organisations 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. The transportation industry IOT-related spending is predicted to be around $1.3 billion in 2017.
According to research firm MicroMarketMonitor, the Middle East and Africa IOT and machine to machine (M2M) communication market is primarily driven by M2M control systems in transportation and automotive sector. It adds that the region's IOT is increasing as it is used in the transportation sector and helps enterprise customers to manage a fleet of vehicles, monitor vehicles' running time, idle time, and stop times, in order to optimise routes and usage, which in turn has reduced fuel costs.
Furthermore IDC says the utilities industry spend will reach $918 million next year, with investments around 'smart grid' technologies to account for more than 82% of this total.
"Numerous smart city projects are already under way across the region, and the propagation of such initiatives will continue to fuel IOT adoption by both public and private sector organisations," 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 IT investment in MEA during 2017, with a combined value of more than $1.6 billion."
In SA, the market for connected devices will account for $2 billion of the global total value of $1.7 trillion by 2020, says IDC. Mark Warren, M2M solutions manager at Gemalto SA, says SA is seeing growth in IOT adoption. This is being enabled by a number of complementary drivers, including investment in digital infrastructure by mobile network operators, with high-speed networks as well as investment in broadband Internet and cloud storage centres by the ICT industry.
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