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Internet of Things June 2022 Viewpoints

Technology Analyst: Rob Edmonds

The Metaverse and the IoT

By Mark Smith
Smith is an independent consultant specializing in digital and connected technologies.


Microsoft has been positioning its full technology stack to harness the potential of the "industrial metaverse." From digital twins to real-time simulations of commerce, metaverse technologies could be a game changer for business. Its development will require greater integration with IoT technology and drive a demand for hardware from wearables to advanced sensors and robotics.


The concept of the metaverse has been gaining traction in recent years as a simulated reality that reflects actual reality. But it is becoming increasingly clear that not one, but many, metaverses will evolve, encompassing sectors from entertainment to commerce.

This point was emphasized earlier in 2022 when Microsoft CEO Satya Nadella spoke about the "industrial metaverse." Nadella claims that this industrial metaverse and how it interacts with IoT technologies will form one of the cornerstones of a new wave of technology adoption.

Just as an entertainment metaverse lets users immerse themselves in a simulated game, so the industrial metaverse would allow engineers to inexpensively re‑create virtual digital twins of complex machines or remotely interact with equipment in dangerous environments. Microsoft has been paving the way for the arrival of the industrial metaverse and for the past year has been positioning its full technology stack accordingly. Microsoft Mesh and HoloLens, Azure Synapse Analytics, Azure IoT, and Azure Digital Twins are among a whole ecosystem that the company has earmarked as the foundation for its metaverse apps. This commitment had further reinforcement at the Build developers' conference at the end of May 2022: One of Microsoft's sessions was "Preparing for the Metaverse."


Increasing adoption of the industrial metaverse could see rising demand for IoT devices, advanced data architectures, and increased cloud-computing capacity. The ability to interact in or through the metaverse could also drive demand for hardware, including robotics, headsets, and other wearables.

If Microsoft's predictions are accurate and the industrial metaverse becomes an increasingly indispensable tool to business, a drive will develop toward IoT technology that can facilitate ever more complex and realistic interactions. Technologies such as motion sensing and customized data-collection sensing will be critical for building 3D digital twins to create more accurate simulations. Wider deployment of 5G and edge computing will be necessary to enable low-latency applications, including smart transportation management.

An important aspect of the metaverse will be how the real world and augmented reality interact, providing the ability to overlay and integrate virtual data onto physical environments. This ability will bring with it the need to capture data from physical surroundings, including mass ingestion of data from the Internet of Things. Technology to capture, transmit, store, and effectively process this mass-gathered metaverse data accurately will be in demand, as will technologies to help secure these data. New edge technologies will also be vital to unify these technologies for coordinated use.

Relevant Areas to Monitor

  • Digital Transformation & Disruption

    Digital transformation is the use of technology to change fundamentally how a company operates; it is not simply the use of technology to improve a company's core business. Many legacy companies may struggle to embrace digital transformation, which creates opportunities for new players to disrupt incumbents.

  • Industry 4.0

    Industry 4.0 leverages machines, parts, and services that exchange data and self-configure to support dynamic, agile, and efficient manufacturing processes. Stakeholders expect Industry 4.0 to revolutionize manufacturing and industrial practices to create self-sufficient systems, but challenges could limit progress.

Impact Scale

On a scale of low, medium, or high, the anticipated level of impact for this topic is: Medium.

Impact Timing

On a scale of now, 5, 10, or 15 years, the anticipated impact timing for this topic is: 5 years.

Opportunities in the Following Industry Areas

  • All Industries
  • Cybersecurity
  • Automotive/Vehicle
  • Information/Telecommunications
  • Manufacturing/Materials

Relevant to the Following Explorer Technology Areas