Internet of Things

IoT Demand In Saudi Arabia

A Survey-Based Study
Feb 2021
 Contents

Summary 3
1. Overview of the IoT Industry 5
1.1. What is the Internet of Things? 6
1.2. IoT in Saudi Arabia 7
2. Saudi Arabia’s IoT Market Survey Study 10
2.1. Supply-Side Survey 10
2.1.1. Survey Design and Methodology 10
2.1.2. Survey Participants 10
2.1.3. Survey Insight 10
2.2. Demand-Side Survey 12
2.2.1. Survey Design & Methodology 12
2.2.2. Survey Participants 14
2.2.3. Survey Insights 15
2.2.3.1 Deployment Plans of IoT Solutions 15
2.2.3.2 Business Impact of IoT Solutions and Key Drivers for

Solution Implementation 17
2.2.3.3 IoT Solutions Usage in Companies 20
2.2.3.4 Challenges for IoT Development 25
2.2.3.5 ICT Budgets 27
3. Study Insights 29
References 30

2
2 IoT Demand In Saudi Arabia: A Survey-Based Study
 Summary

The Internet of Things, or IoT, is defined as a network of devices that are autonomously able
to sense, monitor, or interact with the surrounding environment, in addition to collect and ex-
change data. Global IoT spending is estimated at USD 685.64 billion in 2019 and is expected to
reach USD 1.17 trillion in 20241. Various industry segments are at the early stage of adopting
IoT solutions driven by technological advancement as well as initiatives undertaken by gov-
ernment agencies, such as the Saudi National Industrial Development and Logistics Program
(NIDLP), which focuses on Industry 4.0, Smart City transformation driven by giga construction
projects, and Smart Meter solutions being undertaken by utility service providers. Adoption of
Industrial Use Cases (IUC) is expected to be the biggest IoT growth driver in the Kingdom over
the next several years.

Based on the survey study, Saudi companies realize the business benefits of IoT solutions as
well as the strategic impact on their revenue streams. By the end of 2022, 82% of medium and
large organizations in the Kingdom are expected to adopt an IoT solution for their business.
The top three drivers for adopting IoT solutions by businesses are; a) Improved production effi-
ciency, b) Customer experience improvement, and c) Enhanced Security. Customer focus and
cost efficiencies are among the key priorities driving IoT adoption in the Kingdom and early
adopters are at different stages of IoT deployments. IoT deployments include more than thir-
ty-two different use cases which have been implemented by the companies included in the
survey study. The use cases with the highest adoption in the Kingdom are closed-circuit TV
(CCTV), Fleet Management, Staff Identification, Digital Signage and Freight Monitoring. Prima-
ry benefits that have been observed by Saudi businesses include enhanced productivity, safety
and security, improved asset utilization, real-time analytics, cost optimization and enhanced
customer service. Nevertheless, IoT deployment are currently associated with; a) ongoing costs
for the IoT solution deployed, b) complexity of the solution deployment, and c) security for the
hardware and software. Enterprises are addressing these challenges by leveraging flexible pay-
ment methods, utilizing multiple vendors having expertise in IoT solution deployment and se-
curity service providers managing the hardware and software. Factors such as financial con-
straints, availability of both unique skillsets and standardized solutions are other significant
inhibitors to adoption of IoT solutions in the kingdom.

IoT offers immense opportunities to the enterprises in the Kingdom, particularly for the manu-
facturing, automotive, transportation & logistics, retail, public sector and healthcare industries
which have already started to utilize IoT solutions and are expected to further benefit from fur-
ther adoption of IoT technologies. In terms of spending, the manufacturing sector is expected
to constitute more than 20% of IoT spending in the Kingdom, primarily driven by the use of 5G
and rollout of industrial IoT in the Kingdom. The IoT solution provider market in the Kingdom is
forecasted to significantly grow over the next few years as all Saudi telecom operators expand
their portfolio of IoT services offerings, and partnerships between global and local IoT service
providers continue to grow.

1. IDC Worldwide Internet of Things Forecast Update.

3 IoT Demand In Saudi Arabia: A Survey-Based Study

 1
OVERVIEW OF THE IOT INDUSTRY
4 IoT Demand In Saudi Arabia: A Survey-Based Study
 1. Overview of the IoT Industry

There has been a great deal of interest in IoT potential by governments. The evolution of IoT
technologies and the rapid growth of its applications and services increasingly drive IoT use
cases. The public sector can benefit from multiple vertical uses such as monitoring and con-
trolling the operations of key infrastructure elements, from energy and water treatment to rail
transit and healthcare, which in turn will improve city management. “Smart city” will be one of
many rewards IoT systems can provide. On the other hand, the private sector can also improve
its operational efficiencies by utilizing IoT technologies leading to better national competitive-
ness and relative GDP growth. However, privacy, security, and ethical usage are serious con-
cerns that necessitate governments to be central participants in determining how IoT devel-
ops in their respective countries.

In the Kingdom of Saudi Arabia (KSA), Communications and Information Technology Commis-
sion (CITC) has worked on assessing the potential growth of IoT industry in KSA and the eco-
nomic potential of IoT interoperability in the country, and on how to best move forward in this
critical area. Findings of CITC are presented in a series of reports as follows:

1 IoT Demand in Saudi

Arabia
2 LPWAN Overview
and Strategic
3 Overview of the IoT
Global Regulatory
Perspective Practices

In this report, a survey study is conducted to determine the inclination and impact of adopting
IoT services on the Saudi companies. This study also discusses the main drivers for adopting
IoT solutions by businesses in KSA.

5 IoT Demand In Saudi Arabia: A Survey-Based Study

 1.1. What is the
Internet of Things?

Multiple definitions exist for the Internet of Things (IoT). The International Telecommunica-
tion Union (ITU) defines IoT as “A global infrastructure for the information society, enabling
advanced services by interconnecting things—physical and virtual—based on existing and
evolving interoperable information and communication technologies.” [1]. Similarly, the GSM
Association (GSMA) defines IoT as “the coordination of multiple machines, devices and appli-
ances connected to the Internet through multiple networks.” [2]. The Institute of Electrical and
Electronic Engineers (IEEE), highlights the key features of IoT in order to define the IoT concept
such as “interconnection of things”, “connection of things to the internet”, “Uniquely identifia-
ble things”, and “Ubiquity” [3, 4] . The International Organization for Standardization (ISO) and
International Electrotechnical Commission (IEC) defines IoT as “an infrastructure of intercon-
nected entities, people, systems and information resources together with services which pro-
cess and react to information from the physical world and from the virtual world”. ISO brings a
simpler definition of IoT, which is, “a network of computerized and often wireless devices that
allows us, as well as machines, to see, sense and even control much of the world around us,
whether at the individual level or to wider, global scales” [5]. Moreover, and according to Ofcom
regulator, IoT is defined as “the interconnection via the Internet of computing devices embed-
ded in everyday objects, enabling them to send and receive data” [6]. The adopted definition
for IoT while conducting this study has been: a network of devices that are autonomously able
to sense, monitor, or interact with the surrounding environment, in addition to collect and ex-
change data. The technology consists of an ecosystem of services, hardware, software and
connectivity, all of which work collectively to provide businesses, organizations, and consumers
with insights that help transform their operations and lives.

From all the above definitions, three main features of the IoT networks can be extracted to
define the IoT industry. Those are: a) connectivity model of things, b) measurements of the
physical world, and c) control or providing action in the real/physical world. Therefore, an IoT
system collects data from the physical world via a senor (or multiple sensors) and delivers the
data to be processed (for example in the cloud). A subsequent action is then performed (either
the associated IoT device or elsewhere) and the sense-process-act IoT cycle is closed. Within
this context, it is necessary to differentiate IoT systems from Cyber-physical systems by the
following facts: a) IoT systems are scalable to a large number of devices, and b) the plug-and-
play nature of IoT systems for most use cases.

6 IoT Demand In Saudi Arabia: A Survey-Based Study

 1.2. IoT in Saudi Arabia

The need to showcase swift Return on Investment (RoI) of smart initiatives and government’s
giga projects (such as Neom, King Salman Energy City, and Integrated Logistics Zone) drive the
adoption of off-the-shelf IoT solutions in the Kingdom. Smart parking, lighting, signage and
cleaning systems are expected to be the leading early winner applications whereas low-power
wide-area network (LPWAN) and 5G deployments are adding traction to traffic control and
crowd management use cases in the holy cities of Makkah and Madinah.

Adoption of IoT solutions by some of the enterprises in the Kingdom had resulted in early suc-
cess in industry sectors of education, energy, environmental management, health care, open
data, smart cities, smart manufacturing and is anticipated to reach its full potential over the
coming years. Some of the major benefits that have been realized by IoT adopting organiza-
tions are: Enhanced Productivity, Safety and Security, Improved Asset Management, Real-Time
Analytics, Cost Optimization and Enhanced Customer Service.

Enhanced Productivity: IoT devices can be of assistance to manufacturing busi-

ness sectors to precisely assess demand and resourcefully manage a variety
of production stages by enabling real-time tracking of machinery parts and in-
hand raw materials.

Safety and Security: IoT devices using embedded wearables and sensors, em-
ployees in high-risk settings like heavy industries, mining, and real estate or
construction can be constantly tracked and alerted against dangers.

Improved Asset Utilization: Tracking of assets such as equipment, machinery,

tools, and others using IoT connected sensor are used for efficiently managing
assets. IoT applications provide real-time insights using sensors and detectors
to locate issues requiring immediate action.

Real-Time Analytics: Enterprise IoT applications provide real-time analytics

which expedite discovery and resolution of enterprise-affecting issues to man-
age production and enable focusing on organizational productivity.

Cost Optimization: In manufacturing, IoT devices are used to track equipment

and reduce downtime by foreseeing future failures in production lines. Enter-
prises can also save on overall energy expenditures and recover electrical effi-
ciency. Additionally, smart building systems can track, monitor and be in com-
mand of redundant usage of electrical systems.

Enhanced Customer Service: IoT smart trackers enable fast and accurate ship-
ment tracking. On the other hand, IoT-enabled equipment allows customers to
easily process transactions (for example through Smartphones). IoT solutions
can also be leveraged by utility service providers to detect and resolve issues
using smart meters and smart grid technologies.

7 IoT Demand In Saudi Arabia: A Survey-Based Study

 IoT offers immense opportunities to enterprises in the Kingdom [7]. Among the major indus-
tries where IoT has been partially deployed in Saudi Arabia—and where further potential is
immense—are manufacturing, automotive, transportation & logistics, retail, public sector and
healthcare.

Various industry sectors have already experienced early success in data driven innovation such
as education, energy, environment management, health care, smart cities, smart manufactur-
ing and e-government supporting Saudi Arabia’s economic growth. In order to explore new
revenue streams and business opportunities, telecom operators in Saudi Arabia have started
to emerge as IoT service providers in recent years by providing a wide portfolio of IoT solutions
leveraging their vast infrastructure and network coverage.

The Ministry of Communications and Information Technology (MCIT) in partnership with world-
class technology experts have launched dedicated hubs driving implementations of latest
technologies including Artificial Intelligence, Machine Learning, Internet of Things and Block-
chain [8]. Government regulations are also driving the adoption of some IoT use cases in Saudi
Arabia, such as the Ministry of Interior mandate for all commercial premises to be equipped
with a smart CCTV Security and Surveillance system, the Ministry of Transportation mandate
that all heavy duty and commercial vehicles be managed by a fleet management system and
Saudi Electrical Company (SEC) using 10 million smart meters for consumers across KSA [9, 10].

8 IoT Demand In Saudi Arabia: A Survey-Based Study

 2
SAUDI ARABIA IOT MARKET
SURVEY STUDY
9 IoT Demand In Saudi Arabia: A Survey-Based Study
 2. Saudi Arabia’s IoT Market Survey Study

2.1. Supply-Side Survey

2.1.1. Survey Design and Methodology

In order to develop the understanding of current state of IoT in the Kingdom, CITC has con-
ducted primary research among the service providers. This research study follows a qualita-
tive technique of in-depth interviews. A discussion guide was developed which included topics
covering, IoT services offered by the service providers, challenges faced and the outlook of the
market in the Kingdom. In-depth interviews were conducted with key decision makers within
the organizations responsible for portfolio of IoT services offered by the service providers.

2.1.2. Survey Participants

For a better understanding of IoT ecosystem in the Kingdom, In-Depth Interviews (IDIs) have
been conducted with key market players. In order to represent different segments of the value
chain, the key market players are classified as follows:

A B C
Key telecom Key hardware Key local IoT service
operators. vendors. providers and system
integrators.

2.1.3. Survey Insight

Table 1 – Key Solutions and Verticals

Key Market Players

Key Solutions Key Verticals
by Type
· Transportation and Logis-
Fleet management, asset management, Point tics
of Sale (POS), Medical imaging solution, smart · Financial and Retail
Telecom operators
energy, smart parking, smart metering, CCTV · Healthcare
surveillance, and digital signage. · Smart Cities
· Energy and Utilities
People counting, smart parking, access control,
· Transportation and Logis-
RFID (Radio Frequency Identification), asset
tics
IoT service provid- tracking, Fleet management, asset manage-
· Financial and Retail
ers ment, cold chain, fuel shipment monitoring,
· Buildings/Communities
heavy equipment tracking (weight control), and
· Smart Cities
smart waste management[11].
IoT platform (Wing/Kinetic), connectivity man-
· Telecom operators
agement, device management, IoT security
Hardware vendors · System Integrators
solutions, IoT infrastructure, security, smart
· Medium and Large busi-
waste management, connected lighting, smart
nesses
parking, smart environment, and fleet manage-
ment.
· Smart Cities
Fleet management, smart mosque, smart build-
· Industrial IoT
Local system inte- ings, remote patient monitoring, ATM moni-
· Energy and Utilities
grators toring, smart metering, brilliant manufacturing,
· Transportation and Logis-
environment monitoring.
tics

10 IoT Demand In Saudi Arabia: A Survey-Based Study

 Table 1 details the service and solutions provided by participants, which
clearly shows an overlap between solutions of different service pro-
viders. This overlap is attributed to the complexity and wide range of
implementation options for different IoT solutions. Moreover, it shows
the overlap between the key industries, which drives the need for col-
laboration between service providers.

Service providers have discussed certain business challenges, and indicated that
the IoT industry could benefit by addressing some of these challenges. Some of
these challenges are summarized as follows.

Time to import devices: As it is clear that IoT devices are imported in large
quantities, it would definitely help to enhance the speed of the overall eco-
system of manufacturing, clearance and import of IoT devices cycle.

Importance of highly qualified personnel: Installation of IoT sensors, config-

uration, maintenance, and other related tasks require specific skillset that
ranges from technician to a senior engineer with certain expertise. Achieving
this expertise requires collaboration from educational institutes and univer-
sities in the Kingdom.

Market Readiness/Awareness: There is clear variable levels of IoT awareness

among different public and private organizations. This confusion is indeed cre-
ated by the availability of wide technological approaches for implementing IoT
solutions. The market requires awareness from the customer side—based on
the service providers opinions—on the IoT saolutions advantages.

Security: Most of business owners fear to have their information exposed to

the internet. They are afraid to lose their data to competitors or to have their
organizations attacked through channels and ports potentially exposed with
the introduction of IoT solutions, which inhibits the IoT growth.

Standardization and Regulations: It is important for the companies to enter

the market with clear standards. Hence, the service providers appreciate the
current IoT regulation. Moreover, they are eager for new releases of IoT local
and international standardization and regulation information.

Cost: Justifying return on investment (RoI) is a critical area for service provid-
ers to convince businesses to embark on the IoT journey. Service providers
mentioned that the private sector still sees IoT as a luxury and is not interest-
ed to wait for a few years to see RoI. They also highlighted that RoI story is to-
tally different than other areas such as FTTH, and with the lack of awareness,
such emerging technologies do not create value proposition to everyone.

Most of the service providers mentioned that there has been a lot of efforts in the last few years
in order to increase awareness, and especially with the growing government initiatives and ver-
tical specific regulations (e.g. tracking obligation for all trucks), which will driving IoT adoption.

11 IoT Demand In Saudi Arabia: A Survey-Based Study

 2.2. Demand-Side Survey

2.2.1. Survey Design & Methodology

A quantitative research approach was adopted by CITC to meet study objectives on IoT de-
mand estimation. A survey has been conducted among medium and large size organizations
of the Kingdom to understand the current state of IoT solution adoption, planning, driver and
inhibitors. The survey was conducted using a structured questionnaire and the data was cap-
tured digitally using a pre-scripted survey link using tablets.

The study focused on medium and large size organizations across all vertical industries in or-
der to ensure that the findings of the study reflect the Kingdom’s overall industrial base. The
selection of companies that participated in the survey was made using random sampling. In
order to ensure regional coverage, businesses were randomly chosen in different commercial
districts. Interviewers who selected businesses randomly on the basis of allocations assigned
to them performed spontaneous walks-ins. Once the interviewers have profiled the company
based on the selection criteria (administering the firmographic screening) and eligibility of the
company, they would then request a meeting and interviewed the target respondents (face to
face interviews).

The target audience with whom the survey was conducted were ICT decision makers or influ-
encers on decision making relating to their company’s choices on the adoption and procure-
ment of ICT products or services, such as cloud solutions, managed services, telecom services,
IoT, etc. Target respondents were typically IT directors, heads of IT departments, Senior IT man-
agers, etc. Once the target respondents were identified and met, the respondent profile was
then assessed, i.e. it was verified that they were indeed the decision makers and were familiar
with IoT, and the main interview would be administered. One of the key criteria for selection
of the respondents was that they must have some degree of familiarity of Internet of Things.

Respondents who were not familiar with IoT technology have been excluded from the survey
(see Figure 1 below). In cases where the target respondents were not available or busy, an ap-
pointment would be fixed for another time/day for the face to face interview with the decision
maker.

12 IoT Demand In Saudi Arabia: A Survey-Based Study

 Figure 1: How familiar would you say that you are with the term or concept of the internet of things?

Base: 328

Considering the nature of IoT technologies and current stage of technology adoption in the
industrial sector, only medium and large size organizations were included in the survey with
following breakup of sample (i.e., as in Figure 2)

Figure 2: How many permanent (full time) employees are there in your organization in KSA (including all branches in

the Kingdom)?

Base: 163 Medium,165 Large

Source: Monshaat

13 IoT Demand In Saudi Arabia: A Survey-Based Study

 2.2.2. Survey Participants

The survey has been conducted with 328 organizations representing different industrial sec-
tors of the country. Table 2 shows the number of samples for different industry sectors, with
highest number of participants comes from manufacturing followed by information and com-
munication technology sector.

Table 2 – The number of participations for different industry sector.

Sector Sample

Agriculture, Fishing 8

Banking, Finance and Insurance 31

Construction/Contracting 32

Education 18

Government / Public Sector 14

Healthcare 24

Hospitality / Food Services / Entertainment / Leisure 26

Information and Communication Technology 33

Manufacturing 38

Oil and Gas / Mining & Quarrying / Utilities 17

Professional/Business & Personal Services 27

Trade (Wholesale and Retail) 28

Transportation, Storage and Logistics 32

Total 328

14 IoT Demand In Saudi Arabia: A Survey-Based Study

 2.2.3. Survey Insights

2.2.3.1 Deployment Plans of IoT Solutions

When the surveyed demand-side companies asked regarding their current and future IoT solu-
tions, the response was overwhelmingly positive. The results of the survey are shown in Figure
3 and grouped into three different parts:

57% 25% 18%

have already adopted an having their deployment have no plans for future IoT
IoT solution or are in differ- plans realized over the deployment due to variety of
ent stages of extending next two years. reason with the biggest being
the solution that has been the irrelevance of currently
adopted. available IoT solutions to their
line of business.

Figure 3: What are your company’s plans for the deployment of IoT solution? The connection may be wired (e.g., via
Ethernet) or wireless (e.g., via cellular, WiFi, or NFC).

Base: 328

Among the top reasons provided by companies that are not currently adopting IoT solutions in
their industry is that, 69% of them think that the currently available IoT solutions are deemed
irrelevant to their services, as shown in Figure 4. This can be remedied by increasing awareness
of how IoT can be integrated with different services.

15 IoT Demand In Saudi Arabia: A Survey-Based Study

 Figure 4: What are the reasons for your organization not considering IoT solution deployment?

Base: 59

On the other hand, IoT solution importance is being realized by the organizations as they con-
sider it to play a significant role in their organization’s future as indicated by the overall mean
score of 3.81 on a five-point rating scale. 32% of organizations consider it to be extremely impor-
tant as Figure 5 shows. Among various industry verticals, Education, Health and Trade (Whole-
sale/Retail) lay a higher importance of the technology compared to other industry verticals.

Figure 5: On a scale from 1 to 5, how important do you think the Internet of Things is, or could potentially be,
to your company?

Base: 328

16 IoT Demand In Saudi Arabia: A Survey-Based Study

 2.2.3.2 Business Impact of IoT Solutions and Key Drivers for Solution
Implementation

The impact of IoT deployment for companies is strategic in nature (66%) and is perceived to
provide a competitive advantage by means of cost reductions, effectively meeting the needs
of customers and improved productivity. For some of the other companies the impact is more
of transformative in nature (18%) as IoT helps companies introduce new services and products
and ultimately improve business revenues. Figure 6 clarifies the expected type of business im-
pact IoT would have on the surveyed organizations.

Figure 6: What business impact do you think the “Internet of Things” will have on your organization?

Base: 328

Strategic: It will help my organization compete more effectively with the products and services it cur-
rently offers, to reduce costs, and to improve productivity

Transformational: It will help my organization shift into new product and/or service areas and generate
additional revenues

For consideration: It is something to pilot and trial, but it is not significant

The top three factors due to which organization are investing and / or planning to invest in IoT
deployments include: productivity efficiency increase, customer experience improvement and
security for companies, as Figure 7 shows.

17 IoT Demand In Saudi Arabia: A Survey-Based Study

 Figure 7: What are the main factors that influenced or would influence your organization to create a strategy for,
or invest in “Internet of Things”?

Base: 328

A standard IoT solution requires integration of Hardware, Connectivity, Data Management,

Analytics and Professional Services provided by integration service providers. For 28% of the
companies, data management is considered to be the most important aspect of the IoT solu-
tion that is being considered for deployment. Figure 8 shows what influences the decision of
adopting an IoT solution at a company according to the survey.

18 IoT Demand In Saudi Arabia: A Survey-Based Study

 Figure 8: What do you think is the most important part of an Internet of Things solution, which has the biggest influ-
ence on decisions to deploy the technology?

Base: 328

One of the major reasons for companies to invest in IoT solutions is to gain a competitive ad-
vantage. Therefore, adoption of a solution is also influenced by competitors’ IoT deployments.
Companies are aware of the competitors’ IoT deployments and are realizing the advantages
gained by the same competitors as shown in Figures 9 and 10.

Figure 9: To the best of your knowledge in the mar- Figure 10: And do you think their use of IoT, or by
ket, are your main competitors adopting IoT solutions providing IoT solutions, is giving them a competitive
within their organizations, or providing any IoT-ena- advantage over other organizations in the Kingdom,
bled services/solutions? that are not using or providing IoT?

Base: 328 Base: 185

19 IoT Demand In Saudi Arabia: A Survey-Based Study

 2.2.3.3 IoT Solutions Usage in Companies

Companies deploying IoT solutions use them for a wide range of functions. Business Operation
is one of the key functional area where IoT solutions are being utilized by companies followed
by utilization of IoT solutions for data collection and analytics as detailed by Figure 11.

Figure 11: How are IoT solutions currently being used in your company?

Base: 188

IoT deployments include more than 32 different use cases which have been implemented by
the companies included in the survey. The uses which have been deployed by more than 5%
of the companies are shown in Figure 12. The chart shows that CCTV represents the highest
deployment (87%) among the companies followed by fleet management (51%) and staff identi-
fication (45%).

20 IoT Demand In Saudi Arabia: A Survey-Based Study

 Figure 12: Which of the following IoT solutions has your company already implemented?

Base: 188

Adoption of various IoT use cases is higher among larger size companies across most of the ver-
ticals of industry. Outlook for IoT deployment also looks very positive as companies are planning
to expand their current deployment by 39% within next two years and deploy new use cases by
25% in the next two years, as we have seen in Figure 3. To elaborate, Figures 13 and 14 detail the
IoT solutions that companies are planning to either expand or deploy in the next two years.

Figure 13: Which of the following IoT solutions is your Figure 14: Which of the following IoT solutions is
company planning to extend in the next 2 years? your company planning to deploy within the next 2
years?
Base: 127 Base: 81

Among the top five use cases for both expansion and new deployments; CCTV is the focus for
the companies followed by Fleet Management, Staff Identification and Digital Signage. With
various mega construction projects underway, Smart Buildings is another use case which is
under consideration for deployment over the next two years.

As shown in Figure 15, companies which deployed IoT solutions are quite satisfied overall (4.14
mean score on 5-point rating scale) with their implementation. Satisfaction is significantly
higher among larger size companies.

21 IoT Demand In Saudi Arabia: A Survey-Based Study

 Figure 15: How satisfied are you with the IoT solutions you have currently implemented?

Base: 188

IoT deployment requires a multitude of vendors to deploy various parts of the IoT solutions
and companies feel network equipment vendors will be playing a critical role in the future fol-
lowed by connectivity services providers, as depicted in Figure 16.

Figure 16: Which of these types of vendors/service providers do you think would be most likely to become the leader
of the internet of things market in the Kingdom?

Base: 328

Choice of connectivity for IoT solutions is usually driven by the geographical proximity. Among
surveyed companies, fixed line connectivity is mostly used, followed by cellular connectivity,
then other short range technologies such as WiFi, as detailed in Figure 17.

22 IoT Demand In Saudi Arabia: A Survey-Based Study

 Figure 17: What type(s) of connections is your company currently using or planning to use for IoT solutions?

Base: 328

Securing Hardware and Software in IoT deployments was one of the key areas where com-
panies faced challenges. Various governance models of security have been put in place for
securing hardware and software associated with IoT solutions. Figure 18 shows organizations’
approach to IoT security.

Figure 18: Regardless whether your organization has already deployed IoT or not, which of the following best
describes your organization’s approach to IoT security?

Base: 328

Driven by have high concerns with regards to security of hardware and software of IoT solu-
tion, companies are leveraging expertise of vendors who are specialized in security domain. As
illustrated in Figure 19, IoT software security (48%) is the biggest area for which external ven-
dors services are utilized. Further analysis of data indicates that the need for software security
services is slightly higher among the medium size organization (53%) compared to large size.

23 IoT Demand In Saudi Arabia: A Survey-Based Study

 Figure 19: With which element of IoT security do you most need help with, from any external providers? Or which ele-
ment do you expect that you would need the most help with, from external providers?

Base: 269

24 IoT Demand In Saudi Arabia: A Survey-Based Study

 2.2.3.4 Challenges for IoT Development

Saudi companies operating in various industrial verticals are adopting technological advance-
ments in their business operations and are rapidly undergoing digital transformation. Various
programs by government entities are facilitating the transformation process across both pri-
vate and public sectors. However, companies are facing multiple challenges which are inhibit-
ing the adoption of IoT. These inhibitors can be classified into two broad categories of Internal
and External inhibitors.

Internal inhibitors faced by organizations constituted of finance, management support, secu-

rity, privacy and skill-set, whereas external inhibitors are related to selection of vendors and
availability of standardized solutions. Figures 20 shows that the main internal inhibitors are
upfront costs (45%), management buy-in (29%), and fear of deployment complexity (29%).

On the other hand, the primary external challenges that prevent companies from deploying
IoT solutions in the next two years are being uncertain about which vendor to use.

25 IoT Demand In Saudi Arabia: A Survey-Based Study

 Figure 20: And what do you think are obstacles or challenges that may hinder deployment of an internet of things
solution at your organization in the next two years?

Base: 328

26 IoT Demand In Saudi Arabia: A Survey-Based Study

 2.2.3.5 ICT Budgets

ICT budgets varied based on the size of organizations. Overall, 33% of the organizations sur-
veyed have ICT budgets between SAR 500,000 to SAR 999,999. 10% of organizations refused
to provide their ICT spending details for the survey, More insights are illustrated in Figure 21.

Figure 21: How much is your company’s total ICT budget (in SAR) for last year (2019)?

Base (Total): 296, *Excludes don’t know/refused

On average, companies allocated 12% of their ICT budget for IoT deployments. However, there
are no significant differences observed among medium and large size organizations in terms
of IoT budget allocation, as illustrated in Figure 22.

Figure 22: Based on your best estimate, what percentage of your company’s total ICT budget is allocated to, or is ex-
pected to be allocated towards IoT Solutions?

Base (Total): 269

27 IoT Demand In Saudi Arabia: A Survey-Based Study

 3
STUDY INSIGHTS
28 IoT Demand In Saudi Arabia: A Survey-Based Study
 3. Study Insights

This study presented a general overview of IoT market in the Kingdom of Saudi Arabia. It ad-
dressed the impact and main challenges of adopting and deploying IoT solutions that compa-
nies might face. Different participant segments from key market players and private compa-
nies in the Kingdom were involved in the study. Most of the companies perceived the impact
of IoT deployment as strategic, and it would provide a competitive advantage to them. On the
other hand, the study derived that the top three factors motivating companies to invest in IoT
deployment include improving production efficiency, fostering customer experience, and en-
hancing security.

Despite the fact that IoT deployment for companies has not been smooth, as they have en-
countered challenges during the planning and implementation stages, in general, IoT adoption
in KSA is expected to grow in the near future. In 2023, 82% of medium and large organizations in
the Kingdom will probably have adopted an IoT solution for their business. The survey demon-
strated that IoT deployments include more than 32 different use cases, which have been imple-
mented by the companies. Currently, CCTV represents the highest deployment (87%) among
the companies followed by Fleet Management (51%) and Staff Identification (45%).

Companies expressed specific concerns and challenges started with IoT upfront cost being
the highest financial concern (45%), followed by the fear of implementation complexity (29%),
and the lack of management willingness (29%) to adopt IoT solutions.

29 IoT Demand In Saudi Arabia: A Survey-Based Study

 References

[1] ITU-T Recommendation Y.4000/Y.2060 (06/2012), Overview of the Internet of Things, ITU.

[2] What is the Internet of Things (IoT)? GSMA.

[3] Towards a definition of the Internet of Things (IoT), p.72, IEEE, May 2015.

[4] As per ITU’s definition (ITU, SERIES Y 2005), ”ubiquity is a major feature of an IoT system,
indicating a network which is available anywhere and anytime”.

[5] Architecting a Connected Future, ISO, January, 2019.

[6] Definition of IoT according to Office of Communications (Ofcom) in UK.

[7] IDC Worldwide IoT Spending Guide, 2019.

[8] MCIT Partnerships for Technology Hub, 2018.

https://www.mcit.gov.sa/en/media-center/news/137055

[9] MOI Security & Surveillance Regulation.

https://www.moi.gov.sa/wps/wcm/connect/65a3a313-47b6-4c58-b686-58e4e71aeb25/02.
pdf?MOD=AJPERES&CVID=ljIwnnI&CVID=ljIwnnI&CVID=ljIwnnI&CVID=ljIwnnI&CVID=ljIwn-
nI&CVID=ljIwnnI&CVID=ljIwnnI&CVID=ljIwnnI

[10] Public Transport Authority, 2011.

https://www.mot.gov.sa/ar/AboutUs/TKingdom/Documents/Final%20Report%20Eng-
lish%20New.pdf

30 IoT Demand In Saudi Arabia: A Survey-Based Study

 CITC_SA CITC.SA citc.gov.sa

31 IoT Demand In Saudi Arabia: A Survey-Based Study