An IoT integrator is a company that integrates and utilizes the technologies, products, and services of other companies in the IoT field to ultimately form a complete IoT solution.
What types of IoT system integrators are there?
The IoT integration market is dominated by large global IT and OT integrators such as Tata Consultancy Services (TCS), Wipro, and Accenture. In recent years, large cloud computing companies, such as Microsoft or AWS, have established IoT integration businesses and affiliated partner networks, conducting thousands of field implementations with customers.
Other large software or hardware companies also have dedicated IoT integration teams (such as IBM, Bosch, and Siemens Advanta). Finally, traditional consulting firms and consulting businesses such as PwC, McKinsey, Boston Consulting Group, and EY provide IoT professional services.
Why are IoT system integrators important?
While companies have their own advantages, many are gradually turning to integrators for their IoT projects due to a lack of internal knowledge, staff shortages, and the complexity of setting up IoT systems.
In a recent survey by IoT Analytics, 55% of companies implementing IoT projects use professional service firms or systems integrators. This finding comes from a recent IoT analytics survey that asked IoT decision-makers which vendors they use to implement their IoT projects.
When asked why they hired IoT integrators, decision-makers cited lack of internal experience (78%), staff shortages (72%), or technical complexity (71%). 92% of senior IT decision-makers surveyed agreed that "company-wide digitalization" will be even more important post-COVID-19, and the role of IoT integrators will be crucial. The digital skills gap amplifies this importance, which is the primary reason companies hire integrators.
Integrators play a crucial role in the IoT ecosystem. Both suppliers and users need to ensure the selection of the right integration partners for their solutions to succeed. This has become a common phenomenon in the IoT industry today.
For technology vendors, IoT integrators can help IoT technology solution providers connect with customer needs and maintenance, allowing vendors to focus on updating and iterating their technology products.
For users, system integrators understand industry needs better and are more convenient for subsequent solution maintenance, which is also more beneficial to users.
All of these factors have contributed to integrators becoming a key force in the Internet of Things (IoT) industry.
What are the driving factors in the IoT system integration market?
The following trends are driving the demand for IoT professional services:
1. Move to the cloud. For many companies, pushing existing workloads to the cloud is more complex than expected.
2. New connectivity and hardware setups. IoT integrators support companies during changes or updates in IoT connectivity technologies (e.g., transitioning to 5G or Low Power Wide Area Network (LPWAN)) and continuously replace and integrate more powerful edge computing devices as part of hardware upgrades.
3. Scaling up IoT projects. Some IoT projects are scaling up to thousands (sometimes millions) of devices. This is complex and often requires outsourcing to service providers.
4. Data streamlining and analysis. Systems integrators are often required to connect data streams and enable new software tools to leverage artificial intelligence (AI) and machine learning (ML).
According to research by IoT Analytics, spending by IoT integrators and professional services increased in 2021. The IoT professional services market is projected to grow from $32 billion in 2020 to $92 billion in 2026.
At this rate, the professional IoT services market (with a CAGR of 19.2% from 2020 to 2026) is expected to surpass the professional IT services market. It is projected that by 2026, IoT services will account for 6% of the global IT and IoT services market.
What are the key focuses of IoT system integration services and technology provision?
IoT Analytics has identified four distinct IoT system integration services: strategic consulting, solution design, integration, and operations/management services. While many IoT integrators offer comprehensive integration services, some offer only a limited range.
As shown in the figure above, among all the identified companies, the service offered most is integration (71%), followed by solution design (57%), strategic consulting (53%), and operations/management services (46%).
Almost all (93%) identified system integrators are involved in software integration. 51% focus on hardware, while 42% focus on various forms of IoT connectivity.
Integration is the primary objective in selecting an IoT system integrator. Through integration with all sensors and datasets, and following strategic consultation, appropriate management and control solutions can be developed to ultimately achieve IoT deployment and application.
What are the vertical focuses of different industries?
Different industries have different needs. Manufacturing companies with global factory networks have specific IoT system integration requirements that differ from those of agricultural or healthcare companies.
Manufacturing customers are crucial to IoT integrators: 64% of IoT system integrators focus on manufacturing, including smart factories, Industry 4.0, and connected products. As a major manufacturing country, my country is also leveraging its accumulated manufacturing R&D experience to fully utilize the advantages of IoT integrators in areas such as smart homes, smartphones, and computers, promoting the intelligent development of the manufacturing industry.
Secondly, the transportation industry (such as connected cars and vehicle-to-everything (V2X)) is the second most common industry, accounting for 37%. Taking my country as an example, in the development of V2X, Wuxi, relying on its first-mover advantage as a national-level pilot zone for V2X construction and a "dual-intelligence" pilot city, joined hands with companies such as Huawei and iSoftStone to launch the Mashan Intelligent Bus Trial Commercial Platform Pilot Project, taking the lead in testing and development.
Following that are energy and utilities (such as smart metering and smart grids), accounting for 34%. Taking smart grids as an example, the new generation of power grids improves the intelligent sensing capabilities and real-time monitoring levels of all aspects of power generation, transmission, distribution, consumption, and the electricity market through Internet of Things (IoT) technology.
in conclusion
This article highlights three dimensions (company type, product, and vertical focus) that illustrate the complexity and breadth of the IoT integration landscape. Few IoT integrators can do it all, but there are always those who focus on niche markets.
