A new study from 451 Research reveals that two in three enterprises are already using IoT technologies, with utilities and manufacturing companies leading the way. However, security and a skills shortage is still holding back some companies.
The firm’s inaugural ‘Voice of the Enterprise: IoT’ report reveals that 65 percent of enterprises are using IoT, perhaps a surprising result considering the nascent market and technologies involved.
As it stands, 451 says that most IoT data is coming from machines for business use (71.5 percent), with data centre equipment (51 percent) and camera/surveillance equipment (34 percent) being the most connected. Data centre facilities equipment (33 percent) and end user devices, like smartphones, are also high on the list (29 percent).
By comparison, it seems that IoT is having less of an impact out in the wild, with just 20 percent of IoT data coming from the environment and under 5 percent from humans or animals.
As expected perhaps given the ascent of Industrie 4.0 and the Industrial Internet, industrial equipment is increasingly connected. 49 percent of manufacturing organisations are gathering data from factory equipment, while 49 percent of healthcare organisations gather data from medical devices.
The most popular reason for adopting IoT technologies is to reduce risk (66 percent), optimise operations (63 percent), develop new or existing products or services (33 percent), and enhance customer targeting (21 percent).
This varies by industry of course, with manufacturing and utilities – the two leading sectors – mostly focused on optimising operations. Reducing risk is more critical for those working in finance and public sector.
IoT security rears its head – again
However, despite the optimism, there are challenges ahead, especially in relation to security and skills shortage, with the latter revolving around the talent needed in hardware, networking, software and data analytics.
46 percent of respondents say that security concerns are an impediment while 32 percent cite a lack of internal skills. A lack of IT capacity (29 percent) and a lack of perceived ROI/benefits (29 percent) are also highlighted, with the latter perhaps a sign of IoT not properly being articulated to senior board members.
“The elephant in the room is, of course, security,” said one study respondent. “I’m getting a lot of push back on my security requirements for all of these IoT projects. I’m not budging, and fortunately I have the blessing of my CIO not to budge.”
“We’d expect and hope to do more with IoT, but the scare in the last year or so with the security and safety has caused us to just watch it… The last thing you want to be is on the front page of the newspapers”, added another.
Dan Harrington, research director at 451 Research, said in a statement: “Our survey shows that connected endpoint scenarios vary immensely from traditional use cases such as IP connected cameras, building automation, warehouse automation and telematics to emerging industrial use cases such as crop monitoring and remote patient monitoring.
“Organisations are both enhancing their already connected endpoints with greater capabilities as well as connecting new objects with sensors and circuitry to derive net new value for the business.”
IoT being managed inside, out
451’s research indicated that most organisations (61 percent) manage their IoT initiatives without the help of external consulting or professional services.
This could change however as Harrington noted:” There is a clear need for external expertise to help convince organisations of the business value of IoT as well as to fill internal skill-set gaps in areas like security, big data and network infrastructure.
“As these projects mature, many organisations will find themselves looking to outside consulting and professional services firms for these capabilities.”
451 Research believes equal amounts of innovation and value will be found in both connecting new assets as well, as enhancing the functionality of connected endpoints through more capable sensors to produce robust data that can be analysed with Big Data tools and machine-learning software.
“While there are numerous examples of ‘old’ IoT, it does feel very much early days. We are just now beginning to understand the value of the data being produced and how best to put it to use.
“In order for IoT to evolve as a key digital transformation enabler, enterprises and vendors of key solutions must address security concerns, set standards for connectivity, and lower both the cost and complexity of deploying these environments. This complexity includes not only the deployment of the physical hardware itself, but also the back-end analytics and software platforms, and the business justification tools used to realise the value of the data being gathered,” adds Harrington.
Too much hype?
Maxime Schacht, market analyst at wireless network provider Sigfox, said in an email to Internet of Business that “most businesses embrace the IoT to optimise their operation costs or to completely change their business model.
“The IoT enables them to add new services on top of their product thus generating new revenues.”
However, Industrial Internet Consortium executive director Dr Richard Soley debated the findings, saying that today’s IoT – at least in the manufacturing space – isn’t anywhere near the level of adoption talked about in the report.
“IoT is nothing new. We’ve had sensors — even many sensors — for a long time; actuators in the real world too. And data analysis, computing power, big data, you name it.
“What IoT, especially in the industrial world, represents is a convergence of cheap computing, cheap and abundant storage, ubiquitous communications, zero-cost entry level data analysis — so while everyone is using bits and pieces, it’s the total convergence that is driving growth and the major use of Industrial IoT — integrating operational systems and information systems — that isn’t at 65 percent adoption yet.
“It pays to remember that the term “IoT” is today’s hype, but like some hyped technologies in the past, there’s real value underneath it. Let’s focus on how to capture best practices to use the technology, rather than label every new widget an IoT widget.”
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