Over 75% of businesses now think IoT is critical, says Vodafone Barometer

Vodafone has published its annual IoT Barometer, and the results look promising for the IoT. The report found that 28% of organizations already use IoT, with another 35% saying that they are less than a year away from launching their own IoT projects. Over 75% of respondents believe that the IoT will be critical for their future success, and Vodafone interviewed a record 1,100 respondents – a 70% increase on last year.

It all sounds like good news, but increasingly, it looks like there isn’t going to be a Eureka moment for the IoT – where the world is convinced of it merits and leaps to embrace it. Instead, the quiet adoption looks set to continue, as enterprises come round to the idea of adding IoT technologies to their operations, in the hope of boosting efficiency.

For IT departments, Vodafone reports that IoT tech now accounts for 24% of the average respondent’s IT budget – ahead of mobility (23%), cloud and hosting (23%), and analytics (22%).

Vodafone notes that those companies that invest more see a stronger ROI, with 63% of companies reporting that they are seeing a “significant” return – up from 2015’s 59%.

When asking about the potential of the IoT in business transformations, some 48% said that they were using the tech as a way of support large-scale business transformations (Level 4 of 5 in Vodafone’s ranking), with 29% saying that they are using IoT technologies to connect multiple business organizations into ecosystems (Level 5). Some 44% report that their IoT adoption has improved their customer experience – and this is the most popular reason cited for adoption.

Vodafone notes that the top performers are those that treat their IoT initiatives as a distinct business process, rather than an IT purchase. It notes that, on average, an IoT adopter sees a 20% improvement in its key business indicators (revenue, uptime, cost), thanks to the IoT tech.

Cumulatively, 21% said they had seen the generation of new revenue streams, 20% had seen a reduction in system downtime, another 20% reported an improvement in optimal asset utilization, and 19% said they saw a reduction in costs due to automation.

Notably, there’s not a mention of by how much these respondents saw these key performance indicators change – i.e. without a threshold indicator, we’ve no idea how much of an improvement they are seeing. If there’s a solid ROI, after factoring in all of the associated costs of implementation, then we can remain optimistic about IoT adoption – as word of mouth is a powerful multiplier in the business world.

But the wider issue with forecasting is mostly based in the definitions of the IoT – and exactly what constitutes an IoT device or service. But one thing we’re increasingly noticing is that there doesn’t seem to be the huge profit announcements or revenue spikes that would go hand-in-hand with this level of adoption.

Back to the Barometer, Vodafone found that its respondents are increasingly integrating their IoT deployments with existing business systems. Over 90% said that they store IoT data in their cloud deployments, use analytics tools to support decision making, combine the IoT data with their Enterprise Resource Planning (ERP) platforms, and allow employees to access that IoT data using mobile devices.

Some 81% of businesses said they believe that the IoT only delivers real value if you effectively use the data that is generated by the technology, and notably, over 66% of IoT adopters said that they felt safe sharing their IoT data with other organizations – which bodes well for IoT interoperability and the prevention of walled gardens and toxic siloes.

The final key takeaway from the Barometer was that security remains a key point for consideration. Vodafone says that most adopters are cautiously optimistic, focusing on recruitment and training to mitigate risk. Around 30% have changed or restricted the initial scope of an IoT project to limit the security risk. Notably, 75% believe that security risks are a fact of life and are to be expected, but some 60% say they already have the “necessary skills, processes, and technology to manage IoT security” – a statement that might come back to bite them when the next Heartbleed shows up.

Combined, 42% of respondents said that they were training staff to improve IoT project security, 41% said they were recruiting specialists, 38% said they were establishing clear contingency plans (that sounds worryingly low), 45% said establishing best practices and staff guidelines, 42% said that they were now making security a major focus of RFP requirements, and only 40% were working with specialist security providers.

The full report is available here.