IT giants face opposition by specialist players in IoT

February 26, 2018

Traditional broad and large IT services firms are facing competition from niche industry-focused companies in the IoT services market.

Conglomerate IT service providers are facing tough competition in bidding for large, complex Internet of Things (IoT) projects, as companies look for partners with an understanding of unique business models.

 

Sectors that are using IoT are in need of support from companies that can combine knowledge of the way in which their business operates as well as IT.


According to a report from CXP arm PAC, looking at the system integration trends for IoT projects, a group of generalists made up of Accenture, Atos, Capgemini and IBM were seen as good in all areas.

 

The report found that these companies face competition from specialists in the sector such as Bosch and Siemens, as there is a requirement for specialist knowledge about particular industries. 

 

The report looked at multiple projects around the digital factory, connected vehicles, smart transport, smart energy and resources, smart retail and consumer packaged goods. The report found companies with specific expertise in sectors are now developing their knowledge to become IoT partners in particular sectors. 

 

“Comprehensive competence is in very high demand for IoT projects that require in-depth process know-how,” it said. “Large industrial companies use this for internal IoT projects, but also for external customer projects.”

 

There are also networks forming around IoT in particular sectors to ensure this in-depth and competence is available as well as being added to the report.

 

It has been stated that IoT projects are likely to fail due to lack of business models and siloed structures rather than their technical feasibility.

 

Specialists are adding IT expertise to their knowledge in specific sectors, enabling them to provide a strong IoT offering.

 

“Of particular interest is the general development of industrial companies such as Bosch, Siemens or ABB, which are consistently expanding their existing industry know-how with consulting and IT expertise,” said Klaus Holzhauser, global head of digital and IoT at CXP Group. He added that typical IoT users are also becoming strong IoT providers.

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