Access to low-cost, low-power sensor technology, the availability of high-speed connectivity, the increase in cloud adoption, and the growing use of data processing and analytics are among the key drivers boosting the deployment of IoT technologies. It also helps that smart city efforts continue to progress.
As Asia comes out of the three-year economic slump because of the pandemic, what lies ahead for businesses? What is the role of IoT in the return to some form of normalcy?
FutureIoT spoke to Danny Mu, principal analyst at Forester Research on recent trends around IoT adoption in Asia and where this will lead us in 2023 and beyond.
Drawing from the Forester Report, state of IoT in Asia Pacific in 2022. Where is the concentration of IoT?
We have seen that companies in Asia-Pacific are shifting the share of IoT engagements toward production deployments.
Five years ago, in 2017, production deployments comprised just 25% of engagements, and these were predominantly POCs or pilots.
But in 2021, 61% of engagements were production deployments. That is a clear indication that Asia-Pacific firms are getting more confident in the potential of IoT initiatives to generate business value.
Among all the IoT use cases, smart industry, smart consumer services, and smart infrastructure are popular in Asia-Pacific.
Why do you say the smart city industry in Asia Pacific's leading the world in terms of IoT?
As we know, Asia Pacific contributed 35% of the world's GDP, but when focusing on industry value added, including manufacturing, construction, and utilities, Asia Pacific contributed 44%. That is why the smart industry is a leading IoT use case.
What’s driving this deployment of IoT?
Three drivers. The first appearance and rising maturity of specialised IoT solutions and cloud-based IoT. Second, connectivity technologies such as 5G. Third capabilities and offerings of IoT consultants and service providers.
In Asia, which industries are leaving the deployment?
In Asia Pacific, two-thirds of telecom decision makers say their firm is currently adopting IoT solutions.
Adoption and investment are highest in high-tech manufacturing, 81% followed by telecom, 71%. General manufacturing and pharma are broadly in line with Asia-Pacific outreach.
Adoption rates below the average are found in financial services and insurance, 60%, and retail in wholesale 56.
Compared to other regions outside Asia, how sophisticated do you see the level of use of IoT in our part of the world?
According to the survey data, the IoT solution and application adoption rate in Asia Pacific is higher than in Europe and North America. Particularly in the high-tech manufacturing sector, the adoption rate in Asia Pacific is more than 10% higher than in Europe and North America.
Within the leadership at organizations deploying IoT, what do you see are the primary motivations most surveyed?
Asia-Pacific Telecom decision-makers are confident that IoT solutions will generate significant operational efficiency. Half of them expect IoT initiatives to significantly improve customer experience and increase revenue.
How do you see these IoT deployments impacting other initiatives like digital transformation and modernization, for instance?
Impacted by IOT solutions, enhancing customer experience in public places is the most often mentioned. Other use cases related to smart consumer services are also popular.
The two years of the pandemic have likely driven this trend as customer experience in public. It's driven by private companies, public infrastructure operators, and governments.
IoT Solutions also help to enable new business models, particularly in financial services and insurance – a clear indication that those firms will spend the extra IoT budget on usage-based insurance financing and lending.
Given that security is a rising concern among business leaders, how should enterprises deploying IoT manage the security strategy of the company?
Security is on top of the concerns with deploying IoT 10% higher than the second option. To help protect data in IoT scenarios, confidential computing can help to isolate sensitive operations in a trusted execution environment during processing.
To support the transfer of data between edge and cloud while appearing seamless to the developers, two networking markets, zero trust/edge, and multi-cloud networking will combine to create a business-wide networking fabric.
Finally, as we step into 2023, how should enterprises review IOT deployment strategies to ensure that these initiatives meet expectations?
We have found that Asia-Pacific companies are less confident in their in-house skills to deliver IoT solutions successfully. These points will need for consulting partnerships.
We also predict that the adoption of in-region digital industrial platforms will gain significant growth. Embracing these in region platforms and industry-specific cloud solutions will help Asia-Pacific firms meet their expectations.