TecFutures is taking a different approach to producing a predictions blog for 2023. Instead, we are drawing on our recent IoT CSP survey to gain a measured set of perspectives on the Enterprise IoT market outlook and addressing particular questions, including:
In this blog, we have taken a helicopter view of what the survey is demonstrating. We will go into more detail on these specific expectations for 2023 in our forthcoming short report.
We wanted to find out what IoT CSPs actually think will happen in the next 12 to 24 months. We interviewed 75 CSPs all offering enterprise IoT solutions, with a 50:50 split of MNOs and MVNOs - covering global, regional and local players active across the main geographical regions.
1. Develop a clear understanding of which sectors are most attractive and where competition will be greatest
Over the coming 12 to 24 months, CSPs expect the importance of various IoT sectors to change for them in terms of size, revenue opportunity and growth. We can anticipate that competitive intensity in sectors will rise and fall. Importance now and in 24 months was measured on a 5 point scale. The change in importance is shown below.
Higher growth is expected from Automotive Manufacturing and Systems, as well as from non-Automotive Transportation, Storage & Logistics, and Asset tracking. Retail is also expected to grow (but at a lower rate than the above sectors). Interestingly, both Smart Cities and Utilities are falling in importance to CSPs. In absolute terms, the top three most important sectors in 12 to 24 months will be Storage and Logistics, Utilities, and Healthcare.
2. Prioritize and focus to monetize growth opportunities
Across the whole sample of CSPs, growth of some 6.5% is expected in enterprise IoT connections. MNOs are expecting their enterprise IoT connections to grow by some 7.4% in the next 12 to 24 months. MVNOs expect a lower increase of around 5.7%.
In terms of growth in revenue per enterprise IoT connection, MNOs anticipate this to be around 5.2% over the coming 12 to 24 months.
3. Understand what enterprises see as their main drivers from IoT and position accordingly
So, what is driving this growth in the enterprise? The most significant IoT implementation drivers are firstly based around a desire to improve the customer experience, followed by improved workflow and the more general concept of digital transformation. Enterprises also recognize competitive pressure as an important driver.
4. Help the enterprise to overcome their challenges through enhanced support
Naturally enterprises face challenges with deploying and growing their IoT implementations and these challenges can stifle broader adoption of IoT solutions. The CSPs ranked these challenges in order of importance and over 90% of CSPs see three principal issues that are holding back IoT implementations:
1. Lack of expertise and technical understanding
2. Needing to integrate multiple technologies
3. Concerns over security
5. Provide enterprises with their key requirements around connectivity and non-connectivity aspects
Focusing our attention to what is important as far as IoT connectivity is concerned, we see that the CSP view is fairly consistent. Their view is that enterprises are mostly wanting efficient device onboarding, integrated eSIM / iSIM, and a solution that delivers ROI. Lower cellular cost, and consistent quality of service, are the least important connectivity service attributes wanted by enterprises.
In terms of non-connectivity aspects, the most significant findings are that CSPs believe that the three most important requirements for enterprises are:
1. Sector-based solution for key markets
2. Efficient onboarding of devices
3. End-to-end IoT security
6. Support the enterprise on its IoT journey in 2023
This draws us into the question of how an IoT CSP can best support the enterprise. We asked a range of questions about what the enterprise most value from a CSP and there is a strong cluster of high scores. However, three areas emerged as the most important:
1. Guiding an enterprise through the design, build and implementation process
2. Offering effective technical support
3. Having the flexibility to change suppliers
TecFutures strongly believes that IoT CSPs should look at the results in the context of their market strategies and approaches and how they stack up against the CSPs we interviewed. If you would like to find out more, TecFutures is happy to offer a tailored briefing and open discussion on how you can optimize your competitive position in the enterprise IoT market.
Full short report coming soon!
Comments