Microsoft opens its first European lab for Internet of Things

The U.S. software giant is launching a new lab in Munich — following openings in Redmond and Shenzhen, China — for customers investing in the so-called Internet of Things (IoT), the idea that everything from refrigerators to industrial robots will be connected to the internet.

As Europe’s industrial companies attempt to modernize production with sensors and software, Microsoft is trying to grab a piece of the spending.

The U.S. software giant is launching a new lab in Munich — following openings in Redmond and Shenzhen, China — for customers investing in the so-called Internet of Things (IoT), the idea that everything from refrigerators to industrial robots will be connected to the internet. Customers will be able to fabricate hardware prototypes at the lab in addition to writing software.

Microsoft’s move follows similar ploys by Cisco Systems and IBM, who have also picked Germany to locate technology-focused labs.

Munich is home to a number of German corporate giants, including BMW and Siemens, while companies including Robert Bosch, Adidas and a slate of midsize manufacturers are outfitting more factories with internet-connected production lines and robots. The global manufacturing sector spent an estimated $178 billion on global IoT last year, according to market researcher IDC.

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Industrial companies have been keen to use technology to improve the manufacturing processes, said Peggy Johnson, Microsoft’s executive vice-president of business development. “There is a concern of being left behind if one of their competitors can shorten the process.”

Yet the market for connected machines has been slow to get going. “We know it’s significant,” said Johnson. “It just hasn’t taken off.”

An IDC survey last year of 1,872 companies in Western Europe found that while more than a third were using IoT technologies, more than half of those…

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