Market Rationale
- Large enterprises (energy, utilities, insurances, service providers, governments) need to leverage on smart objects to gain efficiency, transform their business models and retain their customer base.
- Local and continuously changing regulations on infrastructure-based operators and service providers.
- Focus put on the emerging IoT/Smart City market needs.
- Aggregate small digital vertical platform/technology players/startups.
- Provide E2E digital solutions to Large Business and local government customers on selected verticals.
- Presence on the market of distressed opportunities featuring a strong business model and growth opportunities but poorly managed.
Players’ Rationale
- TLC industry is still focused on delivering fixed and mobile services to physical customers, headed to become pipe providers.
- IT industry is deeply fragmented: few big IT players, several digital startups and some mid sizeplayers, which struggle in scaling up and remain or become competitive.
- TLC players are not ready to tackle the market.
Source: DP Management
Italian Internet of Things Market’s size
Rationale
The IoT environment in Italy is characterized by:
• ubiquitous connectivity and low cost, pervasive computing power;
• availability of smart objects and increasing deployment of IoT;
• advanced big data analytics and the need for artificial intelligence (AI).
Consequences
IoT natural player should be traditional Telco and IT companies, but TELCO players have to face:
• consolidation/turnaround (Wind + Tre, TIM);
• fierce/increasing competition on infrastructures (TIM vs ENEL/Metroweb);
• increasing price competition on existing mobile services (Iliad);
• incoming infrastructure disruption by new technologies (5G/IoT).
Italian Internet of Things Market Trends
The Internet of Things (IoT) market in Italy grew steadily between 2015 and 2018. Valued at about two billion in 2015, it reached five billion in 2018, more than doubling over the period. Smart meters and smart cars were driving the growth.
In particular the market value of the Smart Metering sector increased from 980 million euros to 1.4 billion euros between 2017 and 2018. The Smart Home segment played a smaller, albeit significant, role: its market value grew by over fifty percent over the same period, reaching 380 million euros in 2018.
Source: Statista 2019
Internet of Things Distribution in Italy
Rationale
Small ICT companies operate in a mature and fragmented market:
• 60.000+ companies with 5 employees on average;
• many independent subcontractors, several SMEs unable to grow;
• a few major players still focused on System Integration and SW vending.
Consequences
Small ICT companies are mainly characterized by:
• lack of financial resources/financial distress;
• difficult transitions from family businesses phase;
• poorly managed;
• need for senior, specialized salesforces and heavy customization for large business customers;
• lack of investments in R&D.
Small ICT players are unable to grow further
Revenues by Driver (%)
Revenues by Vertical (%)
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