Brief exploration on the drivers (and limiters) of the IoT adoption among businesses.
Although in the U.S., IoT connected devices have been expanding quickly into households, adoption rates among businesses have been slower. However, while households purchase more connected devices (an average of 7.7 devices per household), businesses spend more overall. Gartner stated, “In 2017, in terms of hardware spending, the use of connected things among businesses will drive $964 billion while consumer applications will amount to $725 billion. By 2020, hardware spending from both segments will reach almost $3 trillion.” According to Deloitte Insights, “The global IoT market is poised to grow briskly, from about 4.9 billion connected devices in 2015 to a projected 21 billion by 2020. Very big numbers.
So what are the drivers for businesses adopting the IoT?
- Gains from new revenue models (specifically through services and business intelligence)
- Desire for greater efficiency (from predictive maintenance to optimized routing and inventory management)
- Need to reduce costs (includes minimizing fraud, spoilage, management)
- New technologies driving down costs (low-power wide-area (LPWA) networks, and the arrival of ‘edge computing’.)
- Improved security in future devices (security is a barrier for many businesses today)
- New legislation applying standards (which provide ease of use and clarity on policies)
- Demand for greater visibility into the supply chain and overall business processes
What Could Be Holding More Businesses Back from Adopting the IoT?
- Wireless network speeds (more connected devices can bog down workplace productivity)
- Security risk (consider the challenges in health care)
- Lack of vision from leadership on how the IoT can create value
- Challenge hiring skilled resources to leverage the IoT data
- Cultural and organizational roadblocks
- Investment risk (although competitive pressures may drive through this one)
Clearly there are case studies of businesses who have adopted the IoT and are now dominating their niche. Early movers tend to reap significant awards. Other companies prefer for the pioneers to take the arrows. Regardless, the next several years will be significant.
Read about the pros and cons of the IoT for businesses at www.iotevolutionworld.com
Also published on Medium.