IoT Solutions Market : Key Growth Factors and Industry Analysis 2024
The sheer diversity of the oil & gas industry requires significant number of skilled labor. However, shortage of skilled labor has compelled industry experts to look for smarter alternatives that can reduce the need of workforce dependency by bringing automation into the oil & gas industry. The oil & gas industry has been significantly automated and connected with the introduction of IoT. IoT has changed several aspects of oil & gas such as reducing the possibilities of failures and delays.
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IoT is generating new opportunities to achieve high safety, and increased efficiency and visibility across the enterprise. Three business objectives are relevant to the deployment of IoT solutions in the oil & gas industry: improve reliability, optimize operations, and create new value. IoT solutions connect assets, people, products, and services to streamline the flow of information. They also open up new opportunities for the oil & gas industry by enabling real time decision making, enhancing assets performance, and improving process & quality of products. In return of the significant investment by the leading oil & gas companies, IoT solutions provide increased asset uptime, efficient predictive maintenance, rise in return on innovation, and reduced cost of compliance.
Based on application, the market can be segmented into upstream industry solution, midstream industry solution, and downstream industry solution. Upstream oil & gas companies are engaged in exploration and production operations of crude oil. These companies can gain new operational insights by analyzing data obtained by sensors on drilling machines, safety data from sensors at well sites or fields, and sensor data linked with Enterprise Resource Planning (ERP) systems.
Midstream companies that engage in transportation and storage of crude oil can benefit in terms of observing pipeline network integrity by building a data enabled infrastructure. On the other hand, downstream companies that engage in refining and retailing business of crude oil can use IoT solutions to target consumers in hydrocarbon supply chain through adoption of new forms of digitally connected marketing.
Demand for crude oil has exhibited an increasing trend since the inception of the oil & gas industry. Larger portion of our energy consumption is occupied by fossil fuel. Along with the traditional usage of crude oil, the demand for natural gas is increasing worldwide, owing to its lower environment polluting characteristics. This rise in demand for natural gas is estimated to propel the number of operations. This is the major driver of the usage of IoT solutions in the oil & gas industry. High concern of safety at the operation sites is another driver for IoT in oil & gas.
The rules and regulations for individual and environment safety have been strengthened after disastrous incident at the Gulf of Mexico in 2010. The blowout incident on the drilling rig Deepwater Horizon in April 2010 on Macando well caused 11 casualties and a very serious oil spill of 4.9 Mn barrels causing severe pollution of ocean water and threat to marine life. However, the major restraint is the lack of industry’s attitude of accepting or adopting new technologies. Various cutting-edge technologies have been incorporated in the industry; however, these are primarily at an asset level and not integrated into the entire discipline.
The IoT solutions market for the oil & gas industry is expected to expand significantly across the globe. North America is one of the key regions for crude oil production. However, the U.S. is anticipated to play a large role in the IoT solutions market for the oil & gas industry in North America, since the country is becoming a major exporter of fossil energy. Middle East is projected to be a lucrative market, as economies of the countries in the region are largely dependent upon oil and presence of proven oil reserves in the region. Countries such as Brunei, Indonesia and Malaysia possess considerable reserves of oil, which are in the development or underdeveloped stage. Apart from APAC, Russia also holds significantly huge amount of oil reserves to be developed. This also increases the opportunity for IoT solutions in the region.
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Major players operating in the IoT solutions for the oil & gas market are Altizon Systems, IFS, Cisco, Plasma, IBM, Hortonworks Inc., Accenture, Tego Inc., SAP, Covisint Corporation, HCL Technologies, and Gaonic.
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