Study shows progress and challenges of digitalisation in the DACH region

To optimise production lines, for smart cities and many other infrastructure projects, more and more companies and the public sector are relying on the use of IoT solutions. Data collection and transmission must be fast, reliable, secure and as uninterrupted as possible, to create optimal benefits.

However, this applies not only to connectivity via 5G, but generally to communication. Without reliable communication, including, and especially, between systems and for connecting external services and partners, no modern economy can function.

Key findings of the study at a glance:

• There is satisfaction despite investment needs: The majority of companies surveyed (81%) are ‘satisfied’ or ‘very satisfied’ with their current network connection and quality. However, investments in infrastructure are essential to meet future requirements. This is particularly true for small and medium-sized enterprises, which need to expand their budgets for connectivity technologies to avoid falling behind in international competition.
• Budgets are increasing: Only about 60 percent of companies have a special budget for operating costs (OPEX) of connectivity technologies and 40 percent have a budget for investments (CAPEX) in 5G, WiFi or fibre optics. Encouragingly, budgets for connectivity technologies are increasing over the next twelve months. Only about 15 percent of budgets remain the same or are decreasing.
• There’s a wide technology spectrum: Companies are relying on a mix of different connectivity technologies. 5G dominates with 71 percent, followed by fibre optics (58%) and WiFi 5 (53%). With the expected breakthrough of WiFi 7, the selection of high-performance communication technologies is constantly expanding.

Challenges and trends:

• Security is the biggest challenge: 60 percent of companies see network security as the biggest challenge. Although companies feel well-equipped against cyber attacks, the issue is gaining further importance due to the increasing number and complexity of cyber-attacks.
• Cloud and real-time data processing are prevalent: Cloud services, including Network-as-a-Service (NaaS), are widespread – 78 percent of respondents use the cloud. Real-time data processing is business-critical for 83 percent of companies. A network failure could therefore have disastrous consequences for many companies.
• IT and OT are converging: In industrial production, responsibility for IoT connectivity and machine networking usually lies with IT, as confirmed by 65 percent of respondents. The increasing convergence of IT and operational technology (OT) raises the question of whether a joint, powerful team could better master future challenges.

For cloud services and real-time data processing, which are becoming increasingly important for more and more companies, reliable and high-performance connectivity is no longer just a competitive advantage, but a supporting pillar for business success. New applications, further growing networking and AI add further pressure.

“When it comes to digitalisation and connectivity, companies need staying power,” emphasises Lukas Wallentin, Director Vertical Market Solutions at A1 Digital. "Those responsible should align their digitalisation strategies with a long-term perspective to keep pace with future requirements. Investments in technologies such as 5G will be crucial to remain competitive and tap into new data-driven business models."

Daniel Tremmel, Security Solutions Architect at A1 Digital, adds a security aspect comment: “With so-called readiness assessments, companies can correctly assess their own security level in times of increasing cyber-attacks. A one-time, project-related security investment without appropriate management integration will not be sufficient to meet the increasing requirements. Companies will need to find ways to identify the most efficient, automated and integrated approaches for continuous and active management of risks – including OT.”

5G as a local advantage

“The implementation of 5G is a milestone in digital transformation,” explains Wallentin. “With the ability to support around one million devices per square kilometre, 5G opens up numerous new fields of application in Industry 4.0, from real-time control of networked machines in factories to intelligent logistics that achieve efficiency gains through automated data flows.”

Despite these positive developments, A1 Digital warns businesses to remain vigilant: “With the rapid development of new technologies – from networked machines in industry to IoT applications in logistics – the demand for powerful 5G connectivity will rise rapidly in the coming years. Europe has already made significant progress, but there is still a lot of potential for its infrastructure to be adapted to meet growing demand,” says Wallentin.

Further information

The A1 Digital white paper on the Foundry study can be downloaded here. More information on connectivity technologies can be found at https://www.a1.digital

About the study methodology

The study is based on an online survey of 305 decision-makers and experts from the IT and telecommunications sector in companies in the DACH region. The surveys were conducted between 14 and 21 February 2024.

Exhibition venue Nuremberg: A1 Digital at it-sa 2024 from 22 to 24 October 2024:

Experts from A1 Digital will advise visitors at stand 7-633, Hall 7A on these topics, among others:

1. Cybersecurity: Network as a Service
2. European Cloud Hosting: Exoscale