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US software giant launches Internet of Things lab in Europe

US software company Microsoft has formally announced that it will open a new Internet of Things (IoT) lab in Munich, Germany. Industrial companies in Europe are bolstering efforts to modernize production with sensors and software - and Microsoft has recognized a gap in the market to grab a portion of the spending.

Microsoft has opened labs in Washington and Shenzhen in China, but this will be its first venture into the European market. It has selected the innovative city of Munich for its first European lab- and follows companies such as Cisco Systems Inc. and IBM in picking Germany to locate its technology focused labs.

Munich is home to a number of corporate heavyweights including BMW, Siemens AG and Adidas - and a series of mid-sized manufacturers are outfitting more factories with internet-connected production lines and robots. It has been estimated that the global manufacturing industry spent $178bn on IoT last year.

Microsoft's executive VP of business development, Peggy Johnson claimed that industrial companies have shown an eagerness and desire to use technology in order to improve its manufacturing processes. She said: "There is a concern of being left behind if one of their competitors can shorten the process. We know it's significant, but it just hasn't taken off."

A survey conducted by the IDC last year found that a significant proportion of companies in Europe were using IoT technologies. However, crucially it was unearthed that more than half were only collecting or analyzing data - and were not utilizing it in order to improve production.

"It's a work in progress; I'm not going to tell you the industry has solved this," said Vikas Butaney, vice-president and general manager for IoT connectivity at Cisco, who's working with Microsoft on its three labs on sponsorships and technology access. "In industry these customers are very cautious."

For Microsoft, the Munich IoT lab -- where customers can fabricate hardware prototypes in addition to writing software -- complements 1,900 staffers already in Munich, part of 2,700 people across eight sites. The company last fall brought online two German data centers for its Azure cloud computing services, including IoT tools.