The global enterprise Internet of Things (IoT) market grew by 22 per cent to a total of US$157.9 billion in 2021, despite some adverse conditions including labor and chip shortages, according to a study by research firm IoT Analytics.
That figure is slightly lower than the 24 per cent that the company projected in previous reports, but it’s still a substantial rate of growth, and one that IoT Analytics expects will be sustained for the next five years, for a projected total market size of $525 billion by 2027.
One of the main factors driving enterprise IoT growth below previous estimates was a shortage of skilled workers, according to the report. Businesses in 2021 had trouble finding enough IoT-conversant hires to move digital transformation and IoT projects forward, with job postings related to IoT growing by 41 per cent between July 2021 and Mach 2022.
Another key headwind for the enterprise IoT’s global growth is the ongoing worldwide chip shortage. While the impact of the shortage has been felt across almost all markets, it’s particularly painful in the IoT sector, with order lead times stretching to 40 or 50 weeks in some cases, according to IoT Analytics.
The company said that 2021 saw a shortfall of around 20 million cellular IoT chips, thanks to the supply shortage. This means that some IoT projects simply can’t be completed, due to supply problems and consequent price increases.
Despite these and several other negative factors — including Russia’s invasion of Ukraine and the attendant political fallout, ongoing security concerns and mediocre demand growth — IoT Analytics said that the outlook for enterprise IoT remains relatively strong, thanks to a multitude of tailwinds.
“Key macro tailwinds for the IoT market size going forward include maturing technologies such as AI, 5G, and cloud as well as the role that IoT plays in reaching sustainability goals,” said Philipp Wegner, principal analyst of IoT Analytics.
In addition, advances in connectivity, including more mature 5G, LPWAN and even low-orbit satellite networks, should add flexibility to potential IoT deployments, according to the study, and buy-in from the major public cloud providers — Google Cloud, Amazon Web Services and Microsoft all have extensive IoT offerings — will also propel the market forward.