Vodafone IoT Barometer: significant ROI is tied to scale of adoption

In its fifth year, Vodafone’s IoT Barometer report has found that, compared to the first edition’s findings in 2013, IoT adoption among enterprises has risen from 12% to 29% in 2017, with the number of companies with deployments of over 50,000 devices having doubled in the past year.

Vodafone says that nearly all companies (95%) say that they have already seen some return on investment (ROI) for their IoT projects, and that the average increase in revenue from these projects was 19% – although that figure is only based on those projects that had reported an increase.

The operator says that there’s a correlation between the scale of adoption and the ROI. Of those who had the smallest projects (of up to 100 devices), only 28% said that had seen a significant return or benefit, but at the other end of the spectrum (above 50,000 devices), the percentage hits 67% – suggesting that it’s probably best to hang ‘em high, or not at all, although there are probably better ways to frame that argument to leadership types.

As for the rest of the key takeaways, the majority think that the IoT will have an enormous or sizeable impact on the global economy in the next five years, with nearly three-quarters of IoT adopters saying that digital business transformation is impossible without the IoT.

Some 28% of future IoT adopters are investigating LPWAN technologies for connecting things, which pleases Vodafone, as it believes they are going to drive the next wave of IoT adoption. The MNO notes it has seen adopters increasing their use of partners to help deliver and/or manage their IoT solutions, and 40% are investigating 5G.

As Erik Brenneis, director of Vodafone IoT and CEO of Vodafone Global Enterprise, says: “IoT isn’t new anymore. But it’s still early days in terms of its potential. So even if you haven’t started yet, you could still be an early adopter in your sector, and reap all the benefits that go with that. New tools, technologies, and networks, are making it easier than ever to build and manage IoT solutions.”

Of course, Vodafone would love it for unconvinced enterprises to jump on board the IoT hype-train, and this Barometer is a useful sales tool in that regard. As these companies start trials and launch deployments, Vodafone will be hoping to snare lots of lucrative connectivity package sales, as well as supporting services and software revenues – using its brand recognition as leverage in securing the largest enterprise deals.

Some 84% of respondents said they had grown their IoT usage or adoption in the past year, with 12% now having more than 10,000 devices, and the amount with over 50,000 devices doubling from 3% to 6%. For 55%, the main goal of their deployment is improving efficiency, and some 46% have integrated it with their core business systems, such as ERP platforms.

The report notes that Transport & Logistics and Retail were the two fastest growing sectors in the year, up from 19% to 27% and 20% to 26% respectively – and that 88% of adopters who have reported success are increasing their investments. In terms of motivations, 55% said they wanted to increase efficiency, while the other three answers were all equally popular, scoring 49% – to increase revenue, to manage risk, and to reduce costs.

As mentioned above, 74% say that digital transformation is impossible without IoT technologies, and to this end, 49% are using IoT tech in combination with data analytics to improve their business decision-making. Some 51% of all respondents say that the IoT is increasing revenue or opening up new revenue streams.

The breakdown of scales of deployments by sector was interesting. The report found that 21% of public sector respondents had deployed north of 10,000 devices, with 14% lodged in the 1,000-10,000 bracket. In Healthcare, the sector with the second-highest amount of 10,000+ deployments, the results were 18% and 25%, with Energy and Utilities scoring 16% and 36%. Last of the eight was consumer electronics, which strangely scored 3% and 20% – we would have thought more CE vendors would have shipped larger projects.

Moving forward, security fears seem to have eased, with only 7% of those who had deployed 10,000+ devices citing security as their most pressing concern. For those with less than 10,000 deployed, the rating was 19% – significantly larger. Vodafone says this suggests that security issues are solvable, and that it’s just a question of the smaller guys not yet having the expertise and resources to do so – but a more cynical explanation could be that those who have scaled are making money out of their projects, and are so less inclined to worry about security-based threats to their project’s viability.

The survey also found that adopters are turning to partnerships to flesh out their skill gaps, which are cited as the fourth biggest barrier to adoption, with 75% increasing their use of such partnerships to deliver IoT projects.

The last element in the Barometer looked at changing attitudes to the IoT, and the impact of the sector on the future. Some 79% believe that in five years, over half of all business processes will include IoT sensing or control, and another 79% believe that more than half of enterprises will be using AI or machine-learning to process their IoT data. Over those next five years, 72% expect security and privacy concerns to be greatly reduced, and 82% think that cross-industry collaboration will be common.

In the past year, 48% agreed that they were more positive about the potential of the IoT, with 32% strongly agreeing. Some 49% agreed their IoT project’s profile had increased in the past year, with 33% strongly agreeing – and 67% said that IoT was already mission-critical.