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India is seen as a prominent outsourcing destination for the internet of things (IoT) related services. The country accounts for over 40 percent of the global outsourced market.

Among various zones across the world, Asia emerged as the second most competitive market in the IoT segment, second only to North America, as revealed in a study by market research firm Zinnov. 

The study notes that total global spending on IoT stands at $120 billion in 2016, while the market is expected to grow by 16 percent to $253 billion by 2021. The study rates IoT market spending across various geographies, aiming to help entrepreneurs make more informed decisions in choosing business partners.

A geography wise analysis reveals that North America leads global spending in IoT by contributing 40 percent followed by Asia and Europe.

"North America leads the IoT Technology spend accounting for 40% of the Global spend. Global Companies are seeking Product Development and Managed Services expertise from service providers for faster go-to-market. India is addressing to over 40% of total outsourced market," said Sidhant Rastogi, Partner & Practice Head at Zinnov Management Consulting Pvt Ltd.

The study also indicates that the global IoT market witnessed consolidated contribution from companies and sectors. Among the top 2,000 IoT spenders, the first 100 firms alone made up 46 percent or nearly half of the global IoT spending. Similarly, among verticals, industrial, BFSI and automotive came across as the biggest spenders accounting for 46 percent of the total spend, says the study.

Rastogi observed that IT service providers leveraging IoT to build end-to-end solutions through strategic investments and acquisitions of smaller start-ups with niche expertise. Tata Consultancy Services (TCS), HCL Technologies, Wipro, Tech Mahindra and Infosys figure in the fourth quadrant of Zinnov's ranking of leading IoT service providers based on scale, service diversity and innovation.

"The core of IoT Technology Services will soon move towards providing data monetization services through decision sciences. In order to win end to end IoT projects, Pureplay Engineering Service Providers would need to build or acquire strong managed services competencies," he added.

The study also mentioned that innovations that address potential security threats to the IoT systems will drive future investments and penetration in the market.