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Industrial IoT connections to reach 37 billion by 2025

Smart factory concept realised as research reveals smart manufacturing will represent three-fifths of global industrial internet of things connections over next five years

A study from Juniper Research has identified smart manufacturing as a key growth sector of the industrial internet of things (IIoT) market over the next five years, accounting for 22 billion connections by 2025.

If the growth predicted in the Industrial IoT: Future market outlook, technology analysis & key players 2020-2025 report is realised, it would mean an increase in the global number of IIoT connections from 17.7 billion in 2020 to 36.8 billion in 2025, representing an overall growth rate of 107%.

The study was carried out just as other studies were showing that despite the disruptive impact of the Covid-19 lockdown, with 35% of organisations reducing their investments in the internet of things, a larger number are now planning to invest more in IoT implementations to reduce costs, among other benefits.

In the industrial sector, and in what could be a portent for an upsurge for IoT, leading Japanese telecommunications service provider KDDI selected Orange Business Services to provide a customised IoT platform that would allow Japanese automotive manufacturers Toyota and Mazda to offer connected car capabilities in vehicles sold across Europe.

The Juniper Research report identified private 5G services as crucial to maximising the value of a smart factory to service users, by leveraging the technology to enable superior levels of autonomy among operations. It predicted that 5G and low power wide area (LPWA) networks would play pivotal roles in creating attractive service offerings to the manufacturing industry and enabling the realisation of the “smart factory” concept, in which real-time data transmission and high connection densities allow highly autonomous operations for manufacturers.

Furthermore, the study found that private 5G networks would likely prove most valuable when used for the transmission of large amounts of data in environments with a high density of connections, and where significant levels of data are generated. In turn, said Juniper, this would likely enable large-scale manufacturers to reduce operational spend through efficiency gains.

In terms of the total value of the industrial IoT market, the research forecast that software revenue would be the dominant source. It calculated that over 80% of global IIoT market value would be attributable to software spend by 2025, reaching $216bn. Juniper added that software tools using machine learning for enhanced IoT data analysis and the identification of network vulnerabilities were now essential to connected manufacturing operations.

Yet Juniper Research author Scarlett Woodford cautioned that manufacturers must exercise caution when implementing IoT technology. “[Manufacturers must resist] the temptation to introduce connectivity to all aspects of operations,” she noted. “Instead, they must focus on the collection of data on the most valuable areas to drive efficiency gains.”

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