Vodafone IoT Barometer: one-third of enterprises now use IoT

Just two weeks after Ericsson released its Mobility Index, Vodafone has published its more customer-focused IoT Barometer. The headline figures are that 34% of organizations are now IoT users, up from 29%, with 52% of the adopters saying that they have enjoyed significant returns on their investments.

Vodafone says that the five-point uptick in adoption is because it is now easier than ever to adopt IoT technologies, with many companies now buying cost-effective off-the-shelf solutions, rather than having to build them from scratch. This could be a strong sign that we have moved past the ‘pilot-purgatory’ phase of the IoT, but only 34% adoption is not the kind of success that the most enthusiastic marketers were promising back in the day.

However, of these adopters, 74% say that companies that don’t adopt IoT technologies in the next five years will fall behind their competitors. Depending on how firm that belief is, this looks like a clear sign that the IoT systems that these adopters have chosen are providing clear business advantages.

To this end, 95% of IoT adopters are already seeing benefits, according to Vodafone’s findings, with 52% saying that these benefits have been significant. Some 79% of adopters say that the IoT is enabling positive outcomes that would be impossible to enjoy without the technologies.

These benefits include reduced operating costs, reported by 53% of adopters, improved data collection, cited by 48%, and increased revenue from existing revenue streams, seen by 42%. Vodafone says that where the adopters reported reduced costs, derived from their IoT projects, the average reduction was 18%, and when the adopters reported increased revenue, the average bump was 19%.

So then, depending on the size of your investment, and the ongoing nature of these improvements, there should be a clear path to RoI for these adopters. As the IoT market collectively matures, as prices come down and performance increases, the chance for any adopter to enjoy such returns improves significantly.

As for sectors, Vodafone found that in automotive, 86% of adopters are using or plan to use IoT technologies to increase revenue and differentiate products. Some 84% of insurance adopters say that their overall business strategy has changed as a result of the IoT. Across all sectors, some 60% of adopters say that the IoT will completely disrupt their industry within the next five years. Some 76% say that their IoT project is already mission critical.

Vodafone has a data analysis tool that is somewhat hidden on the website, but it does make some interesting findings. In the adoption rates, you can see the slow-down that hit IoT adoption from 2015 through 2017, where growth stalled. That was a period of much hype but little delivery, on a global scale, and in the past year, the industry did seem to do a better collective job of not promising the earth when it came to the IoT. If this uptick continues next year, it seems safe to say we’ve turned a corner.

In terms of regions, APAC is out in front, with 43% of respondents saying they were IoT adopters, with the Americas posting the largest improvement in a year – up 17 percentage-points to 40% adoption. EMEA is “lagging behind at 26%,” but one wonders what Europe’s figures would be if it were not included in the same category as the Middle East and Africa.

Vodafone says that Transport & Logistics is the industry with the highest current adoption rate, at 42% of respondents, with Vodafone saying this is due to intense competition on the back of real-time visibility applications – shooting up from 17% in 2016.

Manufacturing & Industrials is second place, on 39%, and up 9% in the year, with Automotive in joint-third on 36%. However, Automotive has the flattest growth in adoption, having only shifted from 35% in 2016, with a dip to 34% in 2017. Energy also finished on 36%, but has dipped slightly more than Automotive, down from 37% in 2015.

The last two industries have had far bumpier rides. In 2018, Retail finished slightly ahead of Healthcare, on 26% adoption compared to 24%. However, Retail was flat, on 26% in 2017, up from 18% in 2016, but down from 32% in 2015. Healthcare’s declines have been less jagged, down to 27% in 2017, up from 22% in 2016, and down from 28% in 2015.

So then, it seems that Retail has had a rough time of IoT adoption, and given that Healthcare seems to be languishing, this does not bode well for companies looking to serve that sector. Sure, Healthcare is a difficult market, full of regulations and corporate conservatism for fear of compliance, but Retail should be fertile new ground – so what has happened here?

Well, the most obvious stumble was Bluetooth beacons, which promised to be a way to boost shopper engagement, leveraging their smartphones to push information, promotions, or even checkout services. Largely, these have not taken off, and the fall reported in Retail ties in with the most enthusiastic period for beacons.

Instead, in-store data analytics seem to have taken the role of the beacons, using machine-vision to monitor how shoppers move throughout the store, which can then be used to better place merchandise and goods. However, these systems seem to cost significantly more than a beacon setup, which is going to hamper growth.

Behind the scenes, there seems to be enormous potential in the supply chain and stocking room, but those sorts of projects require complete adoption across the whole business, and often third party suppliers and carriers too. These sorts of transformations are quite a bit more involved than a few beacons and a software-as-a-service account, or a few cameras and an edge compute node tucked away in the stockroom, and so we should see Retail start to come around in the coming few years.

Yotta, a software and services provider, has recently conducted a survey about public sector IoT projects, finding that 74% of public sector IT decision makers say that their organization has not made use of the IoT commercially, with 39% having run pilots but not having live deployments. Some 35% had not made any IoT deployments at all, including pilots.

Yotta’s CTO Manish Jethwa said: “It is clear that while the technology is increasingly coming on-stream and offers a wide range of benefits that public sector organizations could potentially tap into, many are still holding back from implementing it.  There is a need for a process of education here both to reassure organizations regarding their concerns and to guide them through the journey to IoT so that they can start tapping into the many benefits that implementing connected infrastructure can bring.”