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IoT is driving digital transformation in the Middle East

Over a third of companies in the region are now using IoT

14 Jun 2019

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Thomas Hanappi

Head of IoT Business Development, Middle East

The Middle East is a dynamic and rapidly developing region, full of opportunities for investors and businesses alike. Therefore it is clear why IoT adoption is already an integral part of its digital transformation. Our recent survey found that over a third (34%) of companies in the Middle East have already adopted IoT. This shows that the regions adoption is on par with the rest of the world, as highlighted by our Vodafone IoT Barometer 2019: Middle East. And for many of these organisations, the technology is becoming critical to how they do business.

In fact, 9% of adopters in the Middle East say that their entire business now depends on IoT.

The region has many factors that make it well suited to being at the forefront of adopting new technology, including IoT. More than 60% of the population in the states of the Gulf Cooperation Council are below the age of 30 1. Mobile penetration in the region is accelerating fast, and many of the governments have stated that digital transformation will help them drive economic growth and reduce reliance on dwindling resources.

A wide range of companies are seeing the benefits of IoT

Organisations across the Middle East are already using IoT to achieve a range of objectives — from better asset utilisation and managing risks, to creating entirely new business models. IoT is also being used to drive profitability. 51% of adopters in the Middle East say that IoT is helping them to increase revenue. Adopters are using the technology to differentiate their existing products or services from the competition, create new products and provide enhanced customer experiences.

This can be seen in sectors like retail, manufacturing and automotive; where IoT sensors are helping to turn one-off product sales into ongoing service subscriptions.

Inerestingly, over half of adopters (53%) also agree that IoT is helping them to manage risk and compliance. In sectors like manufacturing, for example, there has been a significant uptake of IoT and augmented reality-based plant monitoring. This is helping to improve working conditions and create safer and more compliant factories.

The public sector is embracing IoT too

IoT isn’t just having an impact in the private sector, it’s also supporting many government-led initiatives. For example, Dubai in the United Arab Emirates has launched an ambitious plan to become one of the world’s smartest cities. It has invested in a $161 million smart traffic project 2 and hopes to be the first to have fully autonomous vehicles on the roads, by 2020. 3 It’s even trialling robotic police officers or ‘robocops,’ which are equipped with smart camera sensors and facial recognition software connected to national police databases. 4

In neighbouring Saudi Arabia, as part of its Saudi Vision 2030 initiative, the kingdom is looking to move away from reliance on traditional resources like oil and diversify its economy. It’s investing heavily in IoT-driven infrastructure and plans to build a smart city from scratch. Known as ‘NEOM,’ practically everything in this futuristic city will be linked with IoT sensors and artificial intelligence. 5

IoT adoption is likely to accelerate

Perhaps most excitingly, the majority of those that have adopted IoT are still in the early stages of their journey: 15% have been using IoT for less than a year, and around a third (31%) have been using it for one to two years. Just over a fifth (22%) of adopters in the Middle East have been using IoT for more than five years.

The majority of IoT adopters in the Middle East say their core business strategy has already changed for the better as a result of adopting IoT (72%) and 67% are more reliant on IoT than they were a year ago. And as new connectivity options like 5G are set to be rolled out across the region in 2019 and 2020, this will enable improved security of IoT devices and better performance, with near-zero latency. This means that we are likely to see the rate of adoption accelerate — especially as more businesses become aware of the benefits of IoT.

How can you get more from IoT?

We’ve been part of many businesses’ IoT-led, digital transformation journeys over the years, from pilots through to full-scale implementation with real benefits. To make the most of our experience and share our knowledge, we have created an IoT Sophistication Index, which assesses how advanced organisations are when it comes to IoT. As part of this project, we have developed a self-assessing tool, which businesses can use to find out their own level of IoT sophistication.

Given the potential for IoT in the Middle East, we have also published a dedicated IoT Barometer report which looks at the sophistication of companies in the region and how they compare to those in other parts of the world. Wherever you are on your IoT journey, the IoT Barometer could help you reduce risk and improve the ROI from your investments.

To find out more about how Vodafone IoT can help you on your IoT journey please contact our Middle East team.

 

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