A worrying insight thrown up by the results of a survey from the IoT Business Index, published this week by The Economist’s Intelligence Unit (EIU), sponsored by ARM and IBM, is that industry professionals are more concerned with pricing than they are about security – with 29% saying that the high cost of IoT infrastructure poses a greater challenge, and just 26% of executives saying that security was their chief IoT concern.
Compared to results from the same poll back in 2013, the main barrier for the IoT according to respondents was their own employees’ lack of skills and knowledge, with 26% citing this reason, and 23% pointing the finger at senior managers’ lack of knowledge and commitment to the IoT. Today, this reason has been knocked down to third place as a concern within the IoT.
This is perhaps a testament to the progression of the IoT within various industries, displaying how senior managers have prioritized learning about the IoT, with results blossoming in the space of just three years. However, the recent media frenzy around cybersecurity attacks, notably the Mirai botnet, will have caused votes for security concerns to rocket in the latest survey, compared to 2013.
Despite this, the majority of respondents are optimistic about the future of the IoT, as 30% of respondents believe the IoT will bring significant impacts to their businesses in the “near future,” although a specific time frame was not specified. A particularly pleasing finding shows that 20% have already seen the IoT have a major impact on their business models.
We always like to politely remind our readers that surveys of this type, commissioned by companies with vested interests in the IoT, will tend to ask leading questions and publish findings which show the development of the market in a good light.
With a healthy sample of 825 senior business people, including 412 C-level execs or board members, the survey should have taken the opportunity to assess more specific hurdles and barriers, from which it could gather extra details on how companies overcame (or not) these setbacks. This last point is an invaluable one for fledgling businesses, but the report lacks the kind of detail that would have made it a valuable teaching document.
Of those respondents who said the IoT has been good for business, 22% said specifically that it “unlocked new revenue opportunities from existing products and services,” while 16% claimed it has enabled them to purse new markets, and 25% said using IoT implementations had “sparked a new wave of innovation thanks to data that gives us better insights.”
Over the next three years, 55% of respondents are hopeful that IoT technologies will lead to internal cost savings and/or additional revenue streams.
So how are these industry executives approaching their IoT plans? According to the survey, the top two strategies are neck and neck, with 35% opting to observe and learn from early adopters of IoT technologies, which suggests that companies are being rather cautious in their plans.
We assume the latter group of executives are part of companies with larger budgets, which is another hugely important factor the report has failed to touch on. Executives will understandably be reluctant to give out exact figures for IoT budgets, but a ball park figure of what share of the budget is being allocated to IoT projects would have provided some interesting insights.
A further 35% are bringing in third-party experts and consultants, and 27% are conducting their own market analysis or sponsoring research.
Data management and analysis departments within businesses employing IoT strategies are reaping the most benefits, as 38% of respondents pointed out, followed by products and services with 29% and technology infrastructure management with 27%.
The report gives the example of Daimler as one major company that has successfully adapted its business model to embrace the IoT. Daimler monitors and collects trip data from the 14,000 vehicles in its car2go ride share service, which operates in some 30 cities globally. As a result, car2go CEO, Paul DeLong, told the IoT Business Index that his company now sees itself as “a mobility company, not a car company.”
The Business Index also featured Danish facilities services firm ISS as a prime example, which is just slightly smaller at a market cap of $51bn compared to Daimler’s $76bn. ISS recently started using embedded sensors in the buildings it manages to monitor and analyze the usage of facilities by residents, which creates new advisory services which it can sell to clients.
It adds that this investment by ISS was the largest the company has made in the 115 years of operation. Our view is that talking to smaller companies which don’t have unlimited cash to play with would certainly have produced some far more useful results.
As for the boring demographics, the array of industries in which survey respondents are employed is fairly widespread; 9% agriculture, 9% automotive, 9% construction and real estate, 9% energy and natural resources, 9% financial services, 9% healthcare, 9% IT, 9% manufacturing, 9% outsourced facilities management, 5% retailing, 4% consumer goods, 3% telecommunications, 3% transportation and tourism, 2% logistics and distribution, and 1% infrastructure. Cybersecurity is one notable missing industry from this list.
By region, survey respondents were made up of 30% from North America, 30% from Europe, 30% from Asia Pacific, and 10% from Latin America.