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The promise and perils of change: enterprise IoT in the real world

Georgia James
Georgia James
October 27, 2016
3 minute read time.

"It's a much-hyped space", said Bob O’Donnell, founder, president and chief analyst at TECHnalysis, as he took to the stage to share his research and insights into how enterprise IoT is being deployed in the real world.

Guiding the jam-packed Arm TechCon Expo Theater talk audience through his key findings and predictions, O'Donnell lasered in on challenges the IoT opportunity is facing in the context of US-based medium and large-sized businesses.

IoT promises to transform these businesses in new and profound ways. Yet a number of real-world challenges and growing skepticism of IoT being the next big thing are a thorn in the side of IoT's ambitions to scale quickly in the wild.

SME IoT

1) The battle for control: who owns IoT?

First we dispel the commonly held perception of IoT as a natural fit for IT departments. Given the complex combination of products and services associated with IoT deployments, in practice it's operations, manufacturing and facilities driving IoT take-up across America's medium and large businesses. In fact, a sizeable two-thirds of IoT projects are managed outside of IT's remit.

2) Different end goals for IoT projects

Generating revenue is not the chief IoT goal for the majority of companies. Just one industry that identifies IoT primarily as a method of making money – retail. Driving down costs and improving and streamlining processes are more common rationales for rolling out IoT technology.

Top three use cases of IoT for medium and large businesses in the USA:

  1. Employee monitoring 
  2. Security and identification
  3. Energy saving and smart buildings

3) "I'll have one IoT please."

Today, many companies prefer to own the components of their IoT solution themselves. But with the surge in popularity of ‘As-a-Service’ solutions over asset purchases, 17 percent are willing to consider IoT-as-a-Service – a figure O'Donnell expects to grow by up to 50 percent.

System integrators are waking up to the demand for highly specialized, industry-specific solutions – certainly a trend to watch.

4) A dose of skepticism

The IoT opportunity remains wide open. For now. Early adopters have not always reported successful results from IoT projects, so there’s growing skepticism of IoT being the next big thing. In particular, companies are taking significantly longer than expected to achieve results from their IoT projects, with many still in the proof of concept stage several years on.

We’re also learning that industries and applications have wildly varying expectations for IoT. This poses the challenge of companies requiring vertical-specific solutions, which generally take longer to develop, are more expensive and require greater expertise to implement and manage. A further barrier to wider IoT implementation in enterprise is that key learnings are difficult to replicate.

5) Who's paying?

Surprisingly, the biggest barrier to IoT implementation is not as was previously anticipated, technical, but instead organizational. Questions abound. 'Where does IoT best fit into the business?' 'What data point are we looking for?' And most crucially, 'Who’s footing the bill?'.

While high capital outlay is undoubtedly the major challenge facing organizations, further apprehensions include the time needed to deploy and evaluate the effectiveness of the technology, concerns about IoT data security and privacy, limited internal skill sets, and uncertainty over the value and ROI of IoT itself.

SME IoT

6) Are we there yet?

While it feels like everyone is talking about IoT, it's evident that not all medium and large businesses are doing something about it – yet.

TECHnalysis research reveals IoT is considered 'important' or 'moderately important' by two-thirds of businesses, an encouraging figure for IoT proponents. However, less than a quarter believe it’s a must-have in its current form, so wide scale deployment of enterprise IoT in the real world is likely to remain limited unless business leaders can be convinced that IoT is an essential. IoT deployments have also been slowed by employee and management resistance, particularly where the value of the project is not been well-communicated internally, and when integration with existing environments proves more difficult than initially presumed.

While IoT is an attractive proposition with the potential to drive significant benefits for businesses, the bottom line is that it will take longer to reach its expected outcome than many predict. While conceptually valuable, more compelling proof will be needed to convince skeptics of its necessity.

Anonymous
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