Internet of Things (IoT) spending in Europe is expected to reach $202 billion in 2021 and will continue to experience double-digit growth through 2025, according to a recent report by IDC.
Despite the global impact of the COVID-19 pandemic, the IoT market still experienced growth, though at a slower rate than in previous year, IDC said. The consultancy firm said it expects this growth to continue in 2021 in various sectors as operations, projects, and employees start to return to normal.
In 2021, the largest portion of spending in the IoT sector is expected to remain within the hardware (modules and sensors) category, followed by the services category, as an important area of spending for enterprises, driven by the need to evaluate, design, and deploy the physical devices and to support ongoing operation of the devices . The software category, especially application software for IoT used to organize and access a range of structured and unstructured information, will be the fastest-growing technology in the next few years, according to IDC.
However, IDC’s report noted that COVID-19, and the uncertainty that has come with it, will continue to have an effect over the next few years in some industries, creating a mixed industry performance tied to the role of IoT use cases in the transition to the next normal.
The report also pointed out that the consumer sector will be the largest industry for European IoT spending in 2021. This will be driven by home automation solutions that enhance the living experience and streamline everyday interactions to create a connected home environment in which consumers can remotely monitor and control, through apps or websites, their home systems and home preferences/consumption. The second largest industry, manufacturing, was one of the most impacted industries in 2020 but it has leveraged IoT solutions to remotely track, monitor, and maintain industrial manufacturing devices that are part of the production value chain by assessing equipment conditions and remotely diagnosing equipment failures before they happen by analyzing the live stream of data produced by the machine.
Also, remote health monitoring solutions that use IoT technology to improve the quality of life and care through accurate and focused medical home monitoring will make healthcare the fastest-growing industry in the next couple of years, IDC added.
“Even with COVID-19 changing the investment plans of many European enterprises, the IoT market continues to be attractive for many industries such as healthcare and retail, where IoT can support evolving multichannel retail strategies to provide a seamless consumer experience through any shopping channel,” said Alexandra Rotaru, research analyst at IDC Customer Insights & Analysis. “However, other verticals such as construction and personal and consumer services will see less demand and will develop more slowly in the coming years, focusing on supporting other business priorities in the post-crisis recovery process.”
