Jan 23, 2024 | 6 min read

Momenta's Take: Digital Industry 2024 Trends

Digital Industry Poised for Growth in 2024


January is a busy month for tech, and two major trade shows—the Consumer Electronics Show and the National Retail Federation's Big Show—highlight notable advances in connected solutions (notably for transportation and retail). The backdrop for the year ahead is encouraging. According to Gartner's most recent forecasts, 2024 is expected to see a rebound in tech spending, according to the most recent forecasts from Gartner, with IT services expected to overtake communications services as the largest beneficiary of expenditures. 

The 3.3% growth in 2023 was flat with the prior year, mainly due to "change fatigue" among CIOs, but 2024 is expected to see IT investments rebound.


Worldwide IT Spending Forecast (Millions of U.S. Dollars)


2024 Trends

Source: Gartner (January 2024)


Digital industry continues to gain ground steadily as more devices and systems leverage connectivity, analytics, and AI. According to IoT Analytics, there were approximately 16.7 billion active connected IoT endpoints by the end of 2023, expected to grow to over 29 billion by 2027. IDC estimates that worldwide IoT spending increased 10.6% to $805.7 billion in 2023, expected to exceed $1 trillion by 2026.


Skin in the Game: Microsoft-Vodafone Partnership Targets IoT

Microsoft and Vodafone announced a 10-year alliance that will involve Vodafone investing $1.5 billion into AI development with Microsoft Azure OpenAI and Copilot technologies. Microsoft will become an equity investor in Vodafone's managed IoT platform, which will be spun out as a standalone business by April. Google exited its IoT Core service in August 2023, and several vendors, including Bosch, IBM, and SAP, have discontinued IoT platforms. Microsoft's investment in Vodafone's IoT platform looks to be taking advantage of consolidation in the market (and broadening the global footprint against AWS).


CES Highlights Connected Products

"We wanted flying cars; instead, we got 140 characters." – VC Peter Thiel in 2011 lamented the focus on innovation at the time. At the annual Consumer Electronics Show in Las Vegas, it appears flying cars have arrived, with Chinese automaker Xpeng Aeroht featuring a flying car on the show floor, with deliveries planned for 2025. A number of vendors have showcased electric vertical take-off and landing vehicles, but it's uncertain how these new vehicles can be integrated into existing transportation infrastructure. 


A flying car from Chinese automaker Xpeng Aeroht 

2024 Trends_2Source: IoT World Today


AI, particularly Generative AI, is increasingly integrated into new products, most notably the Rabbit R1, a $199 handheld device based on the Large Action Model (LAM) system that can infer and model action on computer systems. The device is designed to work with voice commands to execute tasks without opening an app or accessing an API. According to Berg Insight, the IoT Infrastructure Pavilion was more significant than the prior year, with much of the conversation focusing on multiple announcements around converged cellular and satellite IoT connectivity and Fixed Wireless Access (FWA).


NRF 2024: Connected Retail in Focus

The NRF conference in New York City highlighted the advances in connected retail and other advanced technologies in its largest industry-specific trade show. With e-commerce continuing to gain share and pandemic disruptions fading in the wake of changing work and commuting patterns, vendors are demonstrating how turning stores into smart spaces can help brick-and-mortar retailers increase customer traffic and sales. One of the most notable demonstrations came from Wiliot, which showcased its Ambient IoT Visibility Platform. The company leverages its stamp-sized self-powered compute devices called Pixels, which can connect and track products of any type, transmitting item- and case-level information about location, temperature, and humidity. As the cost of sensors continues to decline, retailers are finding opportunities to enhance visibility into customer behavior and the supply chain.


Digital Innovation Converges AI and IoT

The common thread across CES, NRF, and the Microsoft-Vodafone alliance is the preeminence of AI (particularly Generative AI) powering connected devices and solutions to improve customer experience, streamline operational efficiencies, and mitigate risks. With a firm macro backdrop and a rebound in IT spending growth, we expect connected, AI-powered solutions to continue leading investment in 2024.





Momenta is the leading Industrial Impact venture capital + growth firm. We accelerate entrepreneurs and leaders devoted to the digitization of energy, manufacturing, smart spaces, and supply chains. Since 2012, our team of deep industry operators have made over 100 investments in entrepreneurs and helped scale over 150 industry leaders via our award-winning executive search and strategic advisory practices.