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SA’s IOT spend to reach R28bn this year

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South Africa’s spend on Internet of things (IOT) technologies is set to top $1.9 billion (R28 billion) by the end of the year.

This is according to the latest forecast from global technology research and consulting firm International Data Corporation (IDC).

SA’s spend in the Middle East and Africa (MEA) is among the big four in the region and includes Saudi Arabia ($1.49 billion), Turkey ($1.24 billion), and the UAE ($0.65 billion). The four are expected to account for 62% of total IOT expenditure in the region in 2019.

The industries that are expected to spend the most on IOT solutions in 2019 are manufacturing ($1.52 billion), government ($1.11 billion), consumer ($1.09 billion), transportation ($1.06 billion), and utilities ($0.73 billion).

A recent update by IDC on the Worldwide Semi-annual IOT Spending Guide shows IOT spending in the MEA region will grow 15.9% year-on-year in 2019 and reach $17.63 billion by 2023, as governments and businesses ramp up their investments in digital transformation projects.

Krishna Chinta, programme manager for telecommunications and IOT at IDC MEA, says: “IOT adoption in the MEA region is expected to accelerate over the coming years as organisations from both the public and private sectors look to improve their provision of customer services, expedite decision-making, improve the quality of products and services, accelerate their time to market, reduce costs and increase productivity.

“As organisations continue to reap the value generated by IOT, we can expect to see further development of innovative industry-specific solutions.”

For SA, the IDC forecast comes as analysts have been predicting huge spend by telco companies as they are missing several layers in their IOT solution stack to fully converge their offerings.

The caveat by analysts says IOT platforms can help mobile operators gain new ways of monetising low-margin subscribers and attract new customers.

Local operators are increasingly ramping up their IOT offerings. The big telcos, Vodacom and MTN, have already made strides in the IOT space.

The IDC says totalling $2.99 billion, hardware is forecast to be the market’s largest technology category in 2019, with the majority of this spending going towards modules and sensors.

It adds: “IOT services, forecast to be worth $2.98 billion, will be the second largest technology category in 2019, with the majority of this total going towards ongoing services and content-as-a-service, as well as IT and installation services.”

Further, IDC says over 75% of consumer IOT spending in 2019 will be driven by investments around smart home technologies, remote health monitoring and connected vehicles. In the transportation sector, fleet management and freight monitoring solutions together will account for approximately 80% of IOT spending in 2019. Meanwhile, smart grids for electricity will account for 78% of total IOT spending in the utilities sector.

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