Spending on IoT in CEE to Reach Nearly $27 Billion in 2021

Spending on IoT in CEE to Reach Nearly $27 Billion in 2021
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A new update from IDC  forecasts spending on the Internet of Things (IoT) in Central and Eastern Europe (CEE) to grow 20.6% year on year in 2017, reaching just over $12 billion. By 2021, CEE IoT spending is expected to total nearly $27 billion as organizations continue to invest in the hardware, software, services, and connectivity that enable the IoT.

The IoT use cases that are expected to attract the largest investments in 2017 include freight monitoring ($1.8 billion), smart grid technologies for electricity, gas, and water ($1.2 billion), and manufacturing operations ($1.0 billion). Production asset management and smart home technologies are also forecast to see significant investments this year.

While these use cases will remain the largest areas of IoT spending in 2021, smart building technologies are predicted to experience strong growth (34.4% CAGR) over the five-year forecast. The use cases that will see the fastest spending growth are smart grid technologies for water (42.9% CAGR), insurance telematics (36.8% CAGR), and electric vehicle charging (35.7% CAGR), albeit all will start from a relatively small initial base.

The industries making the largest IoT investments in 2017 will be transportation ($2.6 billion), manufacturing ($2.2 billion), and utilities ($1.3 billion). Cross-industry IoT investments, which represent use cases common to all industries (such as connected vehicles and smart buildings), will exceed $900 million in 2017 and rank among the top segments throughout the five-year forecast.

Consumer IoT purchases will be the fourth-largest market segment in 2017 at $1.1 billion, but will slow down to become the fifth-largest segment in 2021. Meanwhile, the industries that will see the fastest spending growth are insurance (38.9% CAGR), cross-industry (31.4%), and construction (28.1%).

From a technology perspective, services and hardware will be the two largest revenue-generating categories. Hardware spending will be dominated by modules and sensors that connect end points to networks, while services spending will be split between “IT and installation services“ and “ongoing and content services“.

Software spending will be dominated by applications software. The fastest-growing areas of technology spending are also in the software category, where “horizontal software“ and “analytics software“ will have five-year CAGRs of 38.2% and 28.1%, respectively. Security hardware and software will also see increased investment, with respective CAGRs of 19.3% and 22.7%.

Russia will be the IoT investment leader in CEE throughout the forecast, with spending expected to reach $9.4 billion in 2021. The second- and third-largest spenders will be Poland ($5.8 billion in 2021) and the Czech Republic ($2.3 billion).

Transportation and manufacturing will be the two leading industries for IoT investments in all three countries, followed by utilities in Russia, and cross-industry in Poland and the Czech Republic. Consumer IoT spending will be among the leading categories in all three countries, as well.