IoT Engineering Services Market – Global Industry Size, Share, Trends, Opportunity, and Forecast. Segmented By Service (Product Engineering, Cloud Engineering, Experience Engineering, Security Engineering & Others), By End User (Retail, BFSI & Others), By Region, By Company and By Geography, Forecast & Opportunities, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 35.11 Billion
CAGR (2026-2031)	24.71%
Fastest Growing Segment	Cloud Engineering
Largest Market	Asia Pacific
Market Size (2031)	USD 132.08 Billion

Market Overview

The Global IoT Engineering Services Market will grow from USD 35.11 Billion in 2025 to USD 132.08 Billion by 2031 at a 24.71% CAGR. Global IoT Engineering Services encompass the strategic consulting, technical development, and system integration required to design and deploy connected device ecosystems. The market is primarily supported by the critical imperative for industrial automation and the growing necessity of predictive maintenance to enhance operational efficiency. Furthermore, the extensive deployment of 5G infrastructure acts as a fundamental catalyst, creating a demand for specialized engineering to manage massive machine-type communications and complex network architectures. According to GSMA Intelligence, in 2024, the enterprise segment recorded 10.7 billion IoT connections, highlighting the immense scale of infrastructure that necessitates robust engineering support.

Despite this upward trajectory, a significant challenge impeding market expansion is the acute difficulty of securing converged information and operational technology environments. The amalgamation of legacy systems with modern connectivity often creates intricate vulnerabilities that expose enterprises to cyber threats and data breaches. This security complexity forces organizations to allocate substantial resources toward defensive protocols rather than innovation, frequently causing delays in project implementation and deterring risk-averse businesses from scaling their IoT initiatives.

Key Market Drivers

The Rapid Acceleration of Industry 4.0 and Smart Manufacturing Initiatives is fundamentally reshaping the Global IoT Engineering Services Market. As industrial enterprises transition toward fully digitized operations, there is a substantial requirement for engineering expertise to architect complex cyber-physical systems and integrate legacy machinery with modern cloud platforms. This modernization drive mandates rigorous technical development to support digital twins and automated workflows, forcing companies to seek external specialists for deployment and system architecture. According to Rockwell Automation, June 2024, in the '9th Annual State of Smart Manufacturing Report', 95% of manufacturers are now using or evaluating smart manufacturing technologies, indicating a massive shift in industrial strategy that directly increases the consumption of specialized engineering and consulting services.

Concurrently, the Escalating Need for Advanced IoT Security and Data Privacy Engineering drives significant market activity. The expansion of connected ecosystems introduces critical vulnerabilities, compelling organizations to prioritize security-by-design architectures that protect sensitive operational data from the firmware level up to the cloud. This urgency is amplified by the expanding scale of the network; according to Ericsson, in 2024, the number of cellular IoT connections is forecast to reach 4.5 billion by the end of 2025. This vast connectivity landscape has precipitated a sharp rise in hostile activity, necessitating dedicated security engineering to mitigate risks. According to Zscaler, October 2024, in the 'ThreatLabz 2024 Mobile, IoT, and OT Threat Report', IoT malware attacks increased by 45% year-over-year, underscoring the vital role of engineering services in fortifying infrastructure against evolving cyber threats.

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Key Market Challenges

The primary impediment limiting the expansion of the Global IoT Engineering Services Market is the profound complexity involved in securing converged Information Technology (IT) and Operational Technology (OT) environments. As enterprises attempt to integrate legacy industrial systems with modern connectivity, they inadvertently create intricate vulnerabilities that are difficult to defend. This security gap forces organizations to prioritize immediate threat mitigation over strategic development, effectively stalling the deployment of new engineering projects. Instead of investing in scalable innovations, businesses are compelled to divert significant capital and workforce hours toward establishing defensive protocols and remediation strategies.

This defensive posture is substantiated by recent industry data indicating a worsening threat landscape. According to ISACA, in 2024, 55 percent of surveyed cybersecurity professionals reported an increase in the number of cyberattacks compared to the previous year. This rising frequency of threats creates a risk-averse atmosphere where decision-makers hesitate to authorize new IoT engineering initiatives for fear of compromising critical infrastructure. Consequently, the market faces a measurable slowdown as the imperative for security overshadows the drive for digital transformation and operational scalability.

Key Market Trends

The Integration of Edge AI and AIoT Capabilities is rapidly reshaping engineering workflows by necessitating the deployment of processing power directly on endpoint devices. As organizations seek to reduce latency and bandwidth dependence, engineering teams are prioritizing the development of autonomous systems capable of executing complex inference models locally. This shift demands a robust convergence of embedded software and hardware design, ensuring that intelligence is not reliant on constant cloud connectivity. According to Zededa, May 2025, in the 'Edge AI Matures: Widespread Adoption, Rising Budgets, and New Priorities Revealed in ZEDEDA's CIO Survey', 90 percent of organizations are increasing their edge AI budgets for 2025, driven by the critical need to operationalize distributed intelligence across industrial environments.

Concurrently, the Focus on Sustainable and Energy-Efficient IoT Product Design is compelling engineers to architect devices that minimize power consumption and extend operational lifecycles. This trend is driving the adoption of specialized low-power connectivity standards, such as Reduced Capability (RedCap) technologies, which allow engineers to balance performance with strict energy constraints. By optimizing firmware and hardware for energy efficiency, companies can significantly lower the environmental impact of their connected fleets while reducing maintenance frequency. According to Ericsson, June 2025, in the 'Ericsson Mobility Report', 34 communication service providers in 24 countries are currently investing in 5G RedCap technology, reflecting a market-wide pivot toward engineering solutions that support reduced complexity and enhanced battery performance for diverse IoT applications.

Segmental Insights

The Cloud Engineering segment is currently witnessing the most rapid expansion within the Global IoT Engineering Services Market due to the escalating demand for scalable data management solutions. As organizations deploy increasing numbers of connected devices, the requirement for robust platforms to store and analyze vast datasets in real time has intensified. Cloud engineering facilitates this by offering flexible infrastructure that supports remote asset monitoring and seamless application integration. Additionally, the shift toward operational cost models over capital expenditure drives enterprises to adopt cloud-based IoT frameworks for sustainable long-term growth.

Regional Insights

Asia Pacific commands a leading position in the global IoT engineering services market, primarily due to rapid industrialization and substantial government investments in smart city infrastructure across China, India, and Japan. The region benefits from a robust electronics manufacturing ecosystem that increasingly demands connectivity solutions to enhance operational efficiency. Additionally, the widespread adoption of cloud technologies and high-speed internet facilitates the seamless integration of connected devices. This market dominance is further reinforced by the availability of a skilled engineering workforce and favorable policies supporting digital transformation in the automotive and healthcare sectors.

Recent Developments

• In November 2024, L&T Technology Services announced a strategic collaboration with the Colorado Smart Cities Alliance to drive innovation and technology integration in smart city development projects across the state of Colorado. The partnership aimed to leverage the company's engineering expertise to foster solutions that improve urban living and create sustainable ecosystems. By combining resources, both organizations focused on implementing smart transportation, intelligent infrastructure, and data-driven city services. This initiative highlighted the growing demand for IoT engineering services in the public sector, aiming to optimize resource utilization and promote inter-departmental efficiency through advanced connectivity and surveillance systems.
• In November 2024, Tech Mahindra signed a multi-year Strategic Collaboration Agreement with Amazon Web Services to develop an Autonomous Networks Operations Platform for communication service providers and enterprise customers. The platform was built on artificial intelligence and machine learning technologies to enable the transition of network operations from on-premises infrastructure to a proactive hybrid cloud model. This collaboration combined the company's telecom network expertise with advanced cloud capabilities to enhance productivity and reduce mean time to repair. The initiative underscored the critical role of IoT engineering services in modernizing telecommunications infrastructure and enabling hyper-automation in network management.
• In October 2024, Capgemini expanded its service portfolio with the launch of "augmented engineering" offerings designed to accelerate innovation and streamline research and development processes. These generative AI-infused solutions were tailored to assist clients in industries such as industrial IoT and medical technology by automating complex engineering tasks and removing linguistic barriers in product support. The new services aimed to optimize the entire product development lifecycle, from scientific discovery to schematic design, ensuring regulatory compliance and precision. This launch demonstrated the increasing integration of advanced AI tools within the IoT engineering services market to drive intelligent industry transformation.
• In July 2024, the Commercial and Institutional Business division of Wipro inaugurated a new Smart and Connected IoT Experience Centre in Pune, India. The facility was designed to showcase the company's innovative "Internet of Lighting" solutions and smart technology applications for modern workspaces and industrial environments. Featuring open collaborative spaces, the centre allowed customers to experience firsthand the benefits of wireless IoT controls for lighting and climate systems. This development highlighted the company's focus on delivering comprehensive IoT engineering solutions that enhance operational efficiency, employee well-being, and sustainability in smart factories and commercial buildings.

Key Market Players

• IBM Corporation
• Accenture plc
• Infosys Limited
• Wipro Limited
• HCL Technologies Limited
• Tech Mahindra Limited
• TCS (Tata Consultancy Services) Limited
• Capgemini SE
• Cognizant Technology Solutions Corporation
• DXC Technology Company
• Atos SE
• L&T Technology Services Limited
• Happiest Minds Technologies Limited

By Service	By End User	By Region
Product Engineering Cloud Engineering Experience Engineering Security Engineering & Others	Retail BFSI & Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global IoT Engineering Services Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• IoT Engineering Services Market, By Service:

• Product Engineering
• Cloud Engineering
• Experience Engineering
• Security Engineering & Others

• IoT Engineering Services Market, By End User:

• Retail
• BFSI & Others

• IoT Engineering Services Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE