Doubt Lingers over the IoT

Arthur Cole

2017 is considered to be a breakout year for the Internet of Things (IoT), but if you look closely, this is more a reflection of how much people talked about it rather than what was actually deployed.  This shouldn’t come as a surprise for a technology that portends such a radical shift in the way we utilize data, but it does indicate that the average enterprise still has some time to shore up its IoT plans without falling behind the curve.

A new report by Vodafone points to some pretty impressive numbers for the IoT. Nearly a third of all organizations have adopted the IoT in one form or another, which has more than doubled since 2013 when it was more loosely referred to as machine-to-machine (M2M) communications. As well, more than half of early adopters say it is increasing revenues or opening up new revenue streams, which, of course, could also be read as nearly half have yet to see a return on their investment. As well, a good 84 percent of companies that have already invested in the IoT have increased spending and project deployments in the past year, and nearly half have been able to integrate the technology into CRM, ERP and other core systems.

In another survey, however, we find that while most enterprise executives are intrigued by the IoT, few are ready to commit in a significant way. Strategy Analytics recently queried more than 1,200 companies and found that the IoT commands less than 10 percent of IT budgets at the moment. Again, though, this can be read as a positive, as in, despite having crossed the enterprise radar only in the past year, the IoT already represents 10 percent of IT spending. The survey also found out that most IoT deployments center on operational needs rather than broader strategic objectives, while most of the applications involve basic On/Off commands instead of more complex security and compliance functions.

At this point, however, the biggest impediment to the IoT does not seem to be flaws in the technology or lack of funding but the absence of skills within the knowledge workforce. Europe’s Inmarsat recently commissioned a study that found that more than three-quarters of organizations lack the staffing at senior executive levels to properly capitalize on IoT-driven objectives. A slightly smaller portion saw deficiencies in managerial expertise, while upwards of 80 percent require the hands-on skills needed to implement IoT solutions and ensure they function as intended.


Underneath all of these concerns is the fact that few people have been able to quantify exactly how the IoT will benefit the enterprise. McKinsey & Co. recently released a survey of 50 leading business executives that shows many are looking forward to the potential rewards of the IoT but are still hesitant to pull the trigger in a meaningful way because they have yet to see any significant success stories so far. Business people, after all, generally spend only when they can see the bottom-line result, and the fact is that the IoT is still too new to produce that kind of hard data. That may change in the coming months, but until the front office can be convinced as to how a connected washing machine will put more money in their coffers, they will likely view the IoT as more of a side project than a vital strategic initiative.

The problem with this thinking, of course, is that the hard numbers the suits are waiting for could very well materialize on the balance sheets of the upstart that has just thrown the existing business model into the trash bin. Enterprise executives have every reason to be cautious when it comes to the IoT, but too much hesitation could prove costly in this instance.

When the forest is on fire, the cautious monkey who fears dropping to the ground and running is likely to get trapped in his tree.

Arthur Cole writes about infrastructure for IT Business Edge. Cole has been covering the high-tech media and computing industries for more than 20 years, having served as editor of TV Technology, Video Technology News, Internet News and Multimedia Weekly. His contributions have appeared in Communications Today and Enterprise Networking Planet and as web content for numerous high-tech clients like TwinStrata and Carpathia. Follow Art on Twitter @acole602.


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