More German Firms Seek IoT Services for Competitive Edge

German enterprise investment in the Internet of Things (IoT) is rapidly growing as companies see the technology as a strategic competitive advantage, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2022 ISG Provider Lens Internet of Things — Services and Solutions report for Germany finds the adoption of IoT solutions in Germany has increased significantly in the past three years as enterprises seek to optimize business processes, expand product offerings and improve customer experience.

“German companies understand that enterprise-wide IoT delivers measurable added value,” said Christian Decker, partner and EMEA lead, ISG Smart Manufacturing. “As technologies such as edge AI improve, they have even more reason to build and expand IoT solutions, especially as we see a greater convergence of IT and OT [operational technology].”

AI capabilities at the edge of an IoT network, especially on energy-efficient AI-optimized processors, allows data collected by sensors to be processed without transmission to more central data centers, the report says. ISG expects companies to expand the use of AI in connected devices in the coming years to reduce the latency and increase the scalability of IoT systems.

The growth of IoT continues despite major challenges, including growing data security concerns, slow adoption of sustainability initiatives and especially a lack of qualified personnel in Germany, ISG says. German companies cite IoT as their steepest IT challenge, because it extends beyond traditional IT systems and can encompass components such as sensors, production equipment and medical devices.

The shortage of skilled IT labor is leading many enterprises to seek managed IoT services, because maintaining vast networks of sensors and peripheral devices — often under varying security standards — is nearly impossible for corporate IT departments.

“Managed services give companies the financial and operational flexibility to carry out more comprehensive IoT projects,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research.

The report also explores a wide range of other issues around IoT in Germany, including the importance of careful project planning, proofs of concept and determining the legality of solutions that handle image data.

The 2022 ISG Provider Lens Internet of Things — Services and Solutions report for Germany evaluates the capabilities of 42 providers across five quadrants: Strategy Consulting, Implementation and Integration, Managed Services, Mobile Asset Tracking and Management, and Data Management and AI on the Edge.