IoT Managed Services – A Future Outlook


IDC forecasts that the worldwide IoT market will grow from $655.8 billion in 2014 to $1.7 trillion in 2020, with a compound annual growth rate of 16.9%. This growth will be dominated by the manufacture of devices, and investment in connectivity and IT services. IDC also predicts purpose-built platforms, application software, and as-a-service offerings will capture a larger percentage of the market by 2020. While the IoT managed services market is estimated to grow from USD 21.85 billion in 2016 to USD 79.60 billion by 2021, at a compound annual growth rate of 29.5% during the period 2016–2021, according to a research by MarketsandMarkets research firm.

Today, telecommunications companies, OEMs and service providers are pushing hard to monetize their IoT services through device sales, integration into infrastructure and platforms, and through service fees. By looking at the sheer volume of the IoT market and the growth potential, it is evident that the build and operate categories capture the biggest slice of the revenue pie (approximately 50%). Managed support services have become the lifeline for seamless product delivery and customer experience management (CEM) , and business is increasingly leveraged by product strategy and product engineering functions.

Together, managed support and operation services are helping to manage network infrastructure, IoT applications and cloud components, including 24/7 monitoring, managing and providing resolutions within a defined service level agreement (SLA). Most of the IoT services are getting deployed either on private or public cloud infrastructures. Apart from 24/7 monitoring, the major services under managed operations should include provisioning, orchestration and operations cloud and on premise infrastructure, continuous integrations and DevOps automations as well as the release/change/performance management. Telco and service providers around the globe are feeling the pressures of high customer expectations, increasing competition, decreasing operating budgets and a shortage of skilled staff. These pressures are aggravated by an increase in data traffic and the number of tools, causing capacity bottlenecks, performance issues and even unplanned downtime.

IoT ecosystems are becoming more complex and internal teams are struggling to introduce cloud-based support services and mobility initiatives services that could offer customers more flexibility and agility. As resource-constrained organizations are compelled to adopt new technologies to remain competitive and innovative, technology leaders will need to learn how to manage complex environments to deliver better integration. External managed services providers are equipped to provide the technology, support innovation and deliver business growth. Vendors will be required to operate in hybrid environments, meet end-to-end business process SLAs, and implement advanced preventive and predictive support deliverables. Product engineering and end-to-end managed services organizations have expert engineers who can isolate, analyze and resolve many of these issues in the highly complex and vertically aligned IoT ecosystems. These experts can manage complex networks connectivity protocols, and have in-depth understanding of IoT solution and business environment.

The game changer will be the disruption caused by the convergence of cloud and IoT. Service delivery will become possible on a much larger, almost unprecedented scale, thanks to virtualization technologies like SDN and NFV involved in the cloud space. The focus today is on establishing combinations of internally and externally sourced services and delivering them to the business, while ensuring requisite service levels. Change is inevitable for both the process and the tools required to support future customer demand on the IoT ecosystem and value-added services.

Aricent ’s next-generation managed service framework for IoT offers customers a host of services including: product integration, deployment, technical support , detailed monitoring, multi-channeled interactions, remote management, analytics and comprehensive reporting.

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