Home Edge Computing Industrial Automation Growth Lags, but IIoT Presents an Opportunity for Early Adopters of Edge Computing

Industrial Automation Growth Lags, but IIoT Presents an Opportunity for Early Adopters of Edge Computing

Recent results from industrial automation companies have been uneven, as forecasts in late 2019 for investment in U.S. manufacturing declined for the first time in 10 years. Part of this can be traced to investor uncertainty due to tariffs, the U.S./China relationship and the recently passed USMCA. This mirrors a pattern seen in the EU, UK, and Japan.

Factors Influencing IIoT Growth

But for the Industrial Internet of Things (IIoT), the outlook is more positive. Rather than declining, the IIoT market has been projected to grow between 29% and 40% between 2019 and 2023 depending on which analyst you talk to, with a general consensus in the range of a 33% CAGR. This growth in adoption of IIoT will be driven by developments like the rollout of 5G, the increased adoption of wearable technology, continued development of smart operations and connected assets and interest in developing smart buildings and smart cities.

For manufacturing organizations, the benefits of IIoT deployments are many, including increased efficiency, increased productivity, decreased maintenance costs, and supply chain optimization.  These deployments also provide new areas of revenue generation opportunities for suppliers as they try to better service their customer base and provide a higher degree of customer satisfaction.  

Digital Transformation is Key to Success

To achieve these benefits, manufacturers are focusing on Digital Transformation. A Deloitte Industry 4.0 survey of 361 executives across 11 countries shows that 94% report digital transformation as their organization’s top strategic initiative. Increasingly, Edge Computing is powering these digital business interactions. Wherever real-time processing is critical, when large quantities of data are being produced and when minimizing downtime is imperative, Edge Computing is key. Gartner believes that it’s the interactions between people, businesses, and things that will define Edge Computing use cases.

From our research, we know that more than 50% of enterprises are already implementing or testing Edge Computing use cases. The most popular use cases include device failure detection, advanced process control, asset performance, and SCADA/HMI. Gartner believes that by year-end 2023, more than 50% of large enterprises will deploy at least six edge computing use cases for IoT or immersive experiences[1].

Smart enterprises looking to digitally transform and disrupt the status quo will reap the benefits of making capital expenditures now and be ready for the increased demand and opportunity when the market rebounds. More conservative organizations may get left behind, lose market share and may not be able to take full advantage of the benefits of Edge Computing when it really matters.


[1] Gartner Exploring the Edge: 12 Frontiers of Edge Computing, 6 May 2019, Thomas Bittman

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