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24 July 2015

Red Hat survey shows enterprise IoT apprehension despite known benefits

Open source software business Red Hat makes its living selling its services to the enterprise community. Well aware of the scale of the IoT, and all the lucrative contracts that its implementation will bring to the table, Red Hat has conducted a survey to gauge IoT adoption among these customers. What it found is somewhat troubling on first glance, but Red Hat ensures us that this is not really the case.

Carried out by TechValidate, an independent research company, the survey polled 565 IT decision makers in small businesses all the way up to Fortune 500 companies, and found that only 12% of respondents were currently in the process of rolling out an IoT solution.

That sounds like a very low adoption rate, “but for enterprise IoT, changes aren’t as simple, the information cycle is more complex and IoT’s impact can be transformational. So much like every other significant technology decision, enterprises are being deliberate when it comes to implementing IoT solutions.”

According to Red Hat, this 12% adoption rate is not a negative, rather it is mirroring the typical enterprise adoption rate of new technologies. In addition, Red Hat notes that deployments in enterprises often take far-longer to implement in enterprises than in smaller, more agile businesses.

It notes that “these timelines can sometimes be sped up with the right technology, as IT decision-makers and buyers will often hold on project implementations until they know for sure that a given product will meet their needs, both for the short term and the future. IoT is no different.”

This is more the case of ‘measure twice, cut once,’ rather than a clear aversion to IoT technologies. A poorly thought-out implementation at a national or global scale businesses typically has much larger share price ramifications than at a regional or area-specific venture. A governmental project has to take its time to decide and implement a new technological rollout, while the more agile local supplier or retailer can afford to take a little more of a risk, knowing that a mistake could be (relatively) quickly corrected in a way that isn’t possible at the enterprise level. It’s a difference in culture that won’t be resolved or balanced anytime soon.

The survey found that there is a strong interest in IoT tech at the enterprise level, however. Some 43% of respondents said that the IoT is immediately important to their business, with 46% currently involved with IoT through evaluating, experimenting or prototyping. That’s proof of solid interest, but the low 12% current adoption rate is simultaneously proof of the reluctance or apprehension that the enterprises display by nature – which is something that the IoT can’t avoid.

Those IT departments that have not begun any form of IoT involvement did recognize the value that enterprise IoT could bring to their operations, with 65% citing operations improvements and 51% pointing to process optimization as areas that IoT projects would improve.

While Red Hat certainly has its own cap in the ring, its survey did find that an overwhelming majority (86%) said that open source would play a role in their IoT plans, with Red Hat noting that this aligns with “open source’s history of being a catalyst for enterprise innovation, from cloud computing to containers.”

In concluding its findings, Red Hat says the survey proves that while enterprise IoT adoption is behind the consumer world, it’s important to distinguish that this is not due to a lack of interest or understanding – “rather it’s a symptom of enterprises being thorough with technology buying decisions, as well as actual implementations.”

Of course, Red Hat is on standby to provide its services and software, based on its namesake Linux distribution, to enterprises looking to expand into the IoT, but what does this slower rate of adoption likely mean for the rest of the IoT industry?

Well it would rather depend on the definition of an IoT deployment. Cloud computing and storage will be absolutely necessary to power the platforms behind IoT deployments, and enterprise IT firms will see lots of verticals to compete in as the foundations of Platforms-as-a-Service (PaaS) offerings.

But if we don’t count those as direct IoT adjustments, that is only 12% of enterprises are bracing themselves for the pending surge in cloud demand associated with the growing IoT, then the worst case scenario (on paper) looks like stifled growth due to a lack of cloud computing bandwidth.

However, the grossly oversimplified solution to that problem is to build a few more datacenters and throw servers at the problem until caffeine-fueled software engineers come up with a better alternative. But the more likely impact on IoT adoption will arise from smaller companies looking to the largest “industry leaders” for thought leadership on IoT implementation.

While we certainly aren’t deriding the likes of Dell or Cisco for a lack of it, there will be lots of smaller companies, or even large businesses without much of a technological barrier, that will want to place their trust in the familiar names that lead the enterprise level IT and technological markets. Based on Red Hat’s findings, the IoT industry could do with a little more evangelism from the 12% of adopters that would provide a little more assurance to businesses looking to take their first steps into the IoT – which can be more than a little baffling at times.