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European Enterprises Look for IoT Providers with Broad Geographic Capabilities

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Enterprises in Europe are looking for service providers able to cover multiple geographies to help them roll out and manage their Internet of Things (IoT) networks, according to a new report published by Information Services Group (ISG), a technology research and advisory firm.

The 2021 ISG Provider Lens Internet of Things – Services and Solutions Report for Europe finds enterprises in the region looking for providers that provide IoT services in multiple countries with support in multiple languages.

Companies are looking for providers not only for managed IoT services, where it is crucial for providers to offer dedicated services locally, even in remote areas, but also for IoT consulting services, the report says.

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Providers need to be well versed in the different regulations across Europe related to data collection, data security and data privacy, the report says. Road traffic regulations, railroad management and control systems, mobile connectivity—all systems that are necessary within a successful pan-European mobile connectivity project—differ between countries, because of a lack of existing interfaces and common standards.

While deployment of IoT systems slowed in 2020, in part because of the COVID-19 pandemic, the report sees interest across industries picking up again in Europe, beginning in the fourth quarter last year.

Manufacturing was one of the few industry segments in Europe to see growth in IoT outsourcing contract values in 2020, according to the ISG Index, with the market fueled by the ongoing move to smart factories and demand for Industrial IoT (IIoT) applications. Yet even manufacturing saw a tail-off in the middle of the year as facilities were shut down and investments waned in response to the pandemic.

Worldwide, Europe was the largest market for outsourced IoT services in 2020, with especially strong activity in the U.K. and Germany, the ISG Index found.

“The pandemic stalled the deployment of the IoT, especially in travel-related industries,” said Christian Decker, partner, ISG Smart Manufacturing in Europe. “But service providers are reporting renewed interest across sectors, from cold chain supply improvement in pharmaceuticals to shopfloor equipment effectiveness in food manufacturing.“

Manufacturers, Decker said, need smart factories and supply chains to keep up with the competition. “Many manufacturers already have chosen their IoT platforms and use cases and are looking to their service providers to help them scale deployments,” he said.

One lingering concern for enterprises rolling out the IoT is cybersecurity, and they’re turning to service providers to help them protect the data flowing over IoT systems, the report says.

IoT service providers are building security services into their consulting and managed services engagements, especially those focused on IT and operational technology (OT) convergence, the report adds. Many security services cover the entire IoT ecosystem, from the edge to the cloud to on-premises systems.

Beyond security, convergence of IT and OT systems is a major challenge for enterprises deploying IoT systems, the report says. The use of legacy systems in both worlds can slow down integration and mobility. Service providers are combining their industry expertise and IT proficiencies to develop converged systems.

Service providers are also helping enterprises deploy artificial intelligence in IoT systems, including on the edge, the report adds. AI can help IoT systems better process large volumes of data, and service providers often offer customized AIOps systems for specialized customer needs.

The report sees a growing interest in 5G networking technologies as a way to connect IoT networks, but some mobile network operators may need to shut down older networks to make way for 5G.

Enterprise clients, especially those with deployed IoT fleets and devices, will need to manage the selection of replacement technologies, when mobile operators shutter older services, the report recommends. Shuttering events will happen on a per-country, per-operator basis, which makes them difficult to manage.

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