According to the latest State of IoT – Spring 2024 report, artificial intelligence (AI) has ascended to the top spot as the leading corporate technology priority, while Internet of Things (IoT) maintains its critical position within the top three. Surveys conducted by PWC, KPMG, and BCG highlight this shift, with respondents consistently placing AI first in terms of investment priorities for emerging technologies, closely followed by IoT.
At the same time, the IoT sector is poised for significant growth, with a projected compound annual growth rate (CAGR) of 17% until 2030. IoT Analytics has identified ten key trends driving this expansion, highlighting the dynamic developments and promising future of the IoT market.
10 key trends driving the IoT market
- Embedded Chipset Security Investments: To counter increasing security threats faced by IoT devices, semiconductor companies are enhancing embedded chipset security. This includes integrating secure elements and physical unclonable functions (PUFs) to safeguard data from edge devices to the cloud.
- Intelligent Industrial Automation with AI Chipsets: Advancements in AI technology are driving companies to use AI at the edge, increasing demand for real-time data analytics. Smaller, more powerful AI chipsets are now embedded in industrial hardware, enabling rapid data processing and reducing latency. This approach minimizes network traffic and enhances security by processing data locally instead of sending it to the cloud.
- The Rise of Generative AI in Manufacturing: The industrial sector is rapidly adopting generative AI (GenAI) solutions for various applications, including coding, troubleshooting, operational analytics, and design.
- Positive Workforce Impact of Generative AI: While new technology in manufacturing often raises concerns about job loss, GenAI is expected to boost employment and upskilling, focusing on strategic growth rather than mere automation. According to McKinsey, GenAI could add $2.6–$4.4 trillion annually to the global economy, prompting manufacturers to invest more in AI technologies. The Manufacturing Leadership Council reports that 32% of manufacturers anticipate workforce growth due to AI, highlighting the creation of new roles and the need for higher cognitive skills. 96% of manufacturers plan to increase AI investment, indicating a strong trend towards using AI for cost savings, growth, and revenue generation.
- The Challenge of Rushing to Adopt Generative AI: GenAI is widely adopted, with vendors and users eager to integrate it into products. However, this rush can sometimes distract from solving real problems, shifting focus to using technology without clear goals. Successful technology integration requires clear goals, often overlooked amidst the hype of new innovations.
- Growing Importance of Marketplaces: Marketplaces are becoming crucial for technology procurement as companies and sellers increasingly favor the subscription-based model and aim to streamline procurement. According to IoT Analytics, B2B marketplaces are seeing rapid growth, particularly as a preferred channel for purchasing software.
- Emergence of Data Fabric Solutions: Data fabric, a new concept, provides a comprehensive framework for data integration and management, including architecture, tools, and shared data sets. Unlike data lakes, which store raw data, and data warehouses, which handle only processed data, data fabrics offer a cohesive user interface and real-time data access for all organizational members globally. This ensures consistent and efficient data handling across the organization.
- Hyperscalers Pivot Edge Strategies to Secure IIoT Market Position: Cloud providers are adjusting to changes in the IIoT market by emphasizing edge and containerization strategies. Microsoft, for example, has shifted its focus to Kubernetes within its Azure IoT Operations, indicating a strategic pivot. This change, along with organizational restructuring and the end of the Azure Certified Device Catalog, reflects Microsoft’s evolving IoT strategy in response to technological and market shifts.
- Industrial DataOps Solutions Gain Traction: Industrial DataOps, focusing on enhancing data quality through contextualization and modeling, is gaining popularity as vendors invest in these solutions to overcome data integration challenges.
- Robots as a Service (RaaS) Replacing Manual Labor: Due to labor shortages, manufacturing companies are increasingly adopting RaaS. This business model replaces traditional labor costs with operational expenses for robotics, charged based on usage or productivity.
Conclusion:
The IoT market is undergoing significant changes driven by technological advancements and strategic shifts. The integration of AI in industrial automation, the development of generative AI, and the rise of data fabric solutions are just a few examples of the dynamic developments shaping the enterprise IoT ecosystem.
Read next: 10 most relevant IoT developments in 2023 by IoT Analytics
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