Internet of Things technology is reaching a high level of maturity among companies around the world, with a variety of IoT projects being announced. In fact, Internet of Things investments are expected to outperform other popular IT investment areas, such as the cloud or big data & business analytics.
Research by Inmarsat, a global mobile satellite communications provider, reveals that companies plan to spend 10% of their IT budgets on IoT projects over the next three years. Specifically, the survey states that “businesses across all industry sectors now planning to spend an average of $2.8 million on their IoT investments through to 2024“. To be precise, IoT spending accounted for an average of 7% of companies’ IT budgets between 2017 and 2020. Now, companies respond that they plan to spend 10% of their IT budgets on IoT projects over the next three years.
Planned investments in IoT are significantly higher than those for other Industry 4.0 technologies, including cloud computing (9%), next generation security (7.5%), big data analytics (7.3%), robotics (5.3%), machine learning (4.8%) and virtual reality (4.3%).
Adoption of IoT
Yet, although IoT investment is growing faster (compared to other technologies that claim part of IT budgets) , this new research also reveals that general IoT adoption is already playing an important role in cost savings for many organizations and businesses. On average, respondents report that IoT projects now save 9% of their annual cost. In fact, expectations for the future are even higher: executives around the world expect to achieve an average of 15% cost savings in 12 months, rising to 22% in three years and 30% in five years.
Analysts, however, find significant differences in planned IoT investment levels between different industry sectors. Oil and gas firms intend to invest the most in IoT over the next three years (an average of $3.2 million), followed by electrical utilities companies ($3.1 million), transport and logistics businesses ($3 million), mining operators ($2.7 million) and, finally, agricultural businesses ($2 million (€1.72 million).
“IoT is now the main Industry 4.0 technology in which companies will invest for the next three years. IoT’s record as an investment priority for businesses and the growing level of cost savings they expect to deliver in the coming years demonstrates how well-established this technology has become in many industries.”, said analysts.
Cover photo by Jonas Morgner on Unsplash