Machines in Flow

Germany is one of the largest markets for the Internet of Things applications and is experiencing an upsurge in platform development, which will enable yet further diversification. From an investor perspective, is now the right time to jump into IoT?

September, 2018

The Internet of Things (IoT), which enables connectivity and data exchange between objects, machines and production plants, is one of the most significant trends in industry. To facilitate the use of IoT in multiple fields, developers are creating platforms that allow companies to design their own applications. For example, manufacturers will be able to remotely monitor their facilities and equipment, in order to increase operational efficiency.

Last year, one in three industrial companies invested between five to ten per cent of annual revenue in IoT apps. Worldwide spending on IoT is estimated to reach some €650bn this year. And by 2025, McKinsey say, IoT tech will add as much as €3 trillion in value to networked factories.

»The IoT is no longer a story of future growth… but about the here and now.«

Harriet Green
General Manager of Customer Engagement and Education at IBM’s Watson Center

As one of the largest markets for IoT applications, Germany is seeing an increase in platform development that is creating dynamic opportunities for domestic and foreign investors. “Businesses increasingly see IoT as a growth driver with a view to greater customer proximity, new services and business models,” says Asha-Maria Sharma, ­Senior Manager of Investor Consulting at Germany Trade & Invest. “Further investments, for example in IoT platforms and IT infrastructure, will follow.”

Volvo has teamed up with Microsoft to bring HoloLens to its customers, a groundbreaking hologram technology that will allow users to explore the inner workings and features of their vehicles. © Microsoft Corporation

According to Bernd Gross, CEO of IoT software provider Cumulocity, which originated in California and is now part of Germany’s Software AG, pre-packaged IoT solutions are facilitating the trend away from costly and time-consuming in-house and tailor-made solutions. IBM last year opened its global Watson IoT headquarters in Munich – a significant investment. Microsoft has also chosen Germany as the base for its third IoT and Artificial Intelligence (AI) Insider Lab, after opening facilities in the U.S. and China. “As the world becomes more digitized and connected, the opportunity for businesses to transform has never been more real,” says Harriet Green, General Manager of Customer Engagement and Education at the IBM Watson center. The IoT “is no longer a story of future growth. It’s a story about the here and now, and the outcomes speak for themselves,” she adds.