The main driver of the industrial Internet of things (IIoT) market in Russia will be a long-term shortage of personnel

The Industrial Internet of Things (IIoT) market in Russia has begun to grow after falling in 2022. At the end of 2023, according to analysts, it increased by 5%, to 144.4 billion rubles, and by 2026 it will amount to 188.9 billion rubles. The growth will be ensured by the increased demand of enterprises for automation of production against the backdrop of a shortage of personnel and the initiatives included in the national project “Data Economy”. Not all experts agree with the absolute assessment of the market, but in general they confirm the growth trend. It may be slowed down by the lack of alternatives to many foreign solutions.

“Kommersant” got acquainted with the data of the report of the analytical company TelecomDaily on the development of the industrial Internet of things (IIoT) in Russia, presented on January 17 at the “Digital Day” as part of the “Russia” exhibition. When analyzing the segment, we took into account the market size of equipment for industrial IoT, software for it, specialized services, including design and survey work and network support for the technology.

At the end of 2023, the company estimates the total market volume at RUB 144.4 billion, noting an increase of 5% year on year. In 2022, the segment fell by 10%. Analysts expect that in 2024 and 2025 the market will continue to grow by 11% year on year and by 2026 will reach RUB 188.9 billion.

The main trend in TelecomDaily is the import substitution of foreign equipment and technologies, as well as the digitalization of industry.

MTS also notes market growth, but does not agree with TelecomDaily’s estimates regarding volumes. “The figures given by analysts are more consistent with the assessment of the entire Internet of Things market, while we estimate industrial IoT at 70–80 billion rubles. based on the results of 2023,” a company representative told Kommersant.

The main driver of the industrial IoT market will be a long-term shortage of personnel: companies will have to replace people using automation and robotization of processes, including in the management and decision-making segment, adds Alexey Belsky, founder and CEO of the engineering company Uralenergotel. MegaFon partly agrees with this: they also see the need to optimize production and management processes as one of the main factors of market growth, as well as “the real economic effect of digitalization based on the implementation of IoT solutions.”

In the coming years, the market will also strengthen due to the creation by telecom operators in Russia of a developed infrastructure of NB-IoT networks (Internet of Things communication standard), adds ANO Digital Economy. “Despite the fact that this protocol was originally developed abroad, since 2020 it has been fully standardized within the framework of GOST, and standardization contributes to wider penetration of NB-IoT in the Russian market, primarily facilitating access to projects with government customers,” explains the director according to analytics by ANO Karen Kazaryan.

Another factor in market growth could be government initiatives to stimulate demand for IoT devices in the public sector. Thus, according to the roadmap of the national project “Data Economy”, the authorities propose to expand and centralize city smart video surveillance systems, create an IoT platform for managing production processes at enterprises, introduce Internet of Things devices in housing and communal services, etc. Implementation of the national project will require about 1.5 trillion rub. until 2030.

At the same time, surveyed market participants talk about the continued high dependence on imported technologies in the industrial Internet of things segment. Thus, MTS notes: “Many controllers, SCADA and MES systems at enterprises were from Western companies that left the market. Such technologies require time for import substitution.”

The greatest shortage is observed in the field of equipment for IIoT, as well as in industry software, MegaFon adds: “According to an internal study, only 33% of companies were able to find a full-fledged replacement for software and equipment among Russian analogues, the majority – about 60% – only partially replaced with Russian analogues.”

Tatiana Isakova