The IoT is at the core of digital transformation in 2017, with 73 per cent of executives either researching or currently deploying IoT, according to the latest state of the market report from Verizon. But worries over standards, security, interoperability and cost are holding some companies back.
Manufacturing, transportation and utilities make up the largest percentage of investments, while insurance and consumers represent the fastest areas of spending growth.
With 8.4bn connected things in use in 2017, up 31 per cent from 2016, and network technology, cost reductions and regulatory pressures driving adoption, business leaders are not only paying attention, they’re getting in the game according to the report, which includes insights from a study commissioned by Verizon, third party research and other findings.
The economics of the IoT are increasingly compelling and the B2B space will benefit first, generating nearly 70 per cent of potential value enabled by IoT. And while enterprises across industries continue to develop and pilot use cases to ensure real-time visibility into data around assets, equipment, power management and public safety – everything from construction industries employing drones for site inspections to government municipalities creating smart communities – hesitancies related to the IoT still remain.
As the report highlights, four key concerns stand out for over half of business executives when exploring IoT – standards, security, interoperability and cost.
These uncertainties, along with apprehensions around scalability and simplicity, are holding businesses back from full IoT deployment, with many still in proof-of-concept or pilot phase. Early adopters seem largely focused on proving out simple use cases to track data and send status alerts, just starting to realise the full value the IoT has to offer in driving growth and efficiencies across business.
The report highlights new network technology across the industry, most significantly the introduction of Cat-M1, and with it, cost reductions in connectivity plans; changing consumer behaviour as they relate to the new sharing economy; and regulatory requirements spanning healthcare, food and air space. These are just a few of the driving factors of IoT adoption and advancement this year for an ecosystem that will see more than $2tn in spend by 2017.
The report also sheds light on how businesses should be thinking about the IoT moving forward and addresses many of the concerns expressed by executives surveyed, specifically:
•Simplicity and integration: IoT platforms will become more seamless and streamline the deployment of applications, giving developers simplified access to new tools and resources for IoT use cases. In addition, there will be on-going consolidation of the IoT market space.
•Cost: new Cat-M1 technology and chipsets will reduce costs of connectivity and enable more widespread adoption by businesses large and small.
•Security: securely collecting, analysing and integrating data will continue to be at the forefront to help protect at the platform, network and device level.
Some of the case studies highlighted in the report include IoT-enabled track-and-trace technology helping pharmaceutical enterprises, such Aegerion Pharmaceuticals, thwart counterfeiting and meet the requirements of the US Drug Supply Chain Security Act. Drones are helping utility and construction firms, such as Hensel Phelps, carry out maintenance and inspections without having to dispatch workers. TruGreen is connecting sensors in lawns to determine how much water, fertiliser or pesticide is necessary. Unmanned aerial vehicles are changing the insurance industry, with 70 per cent of Fortune 500 property and casualty companies using drones to perform inspections and other claims-related work.
For smart communities, the IoT is providing actionable traffic insights and making parking seamless. It is bringing communities together and bridging the digital divide in forward thinking in municipalities such as Boston, Sacramento and Kansas City.
Electricity companies are moving to smart-reader and smart grid cloud technologies to enable 4G LTE connected meter reading, outage and restoration notifications, providing actionable insights and data for future planning.
“Over the past year, industry innovators in energy, healthcare, construction, government, agtech and beyond have not only piloted, but in many cases deployed IoT technology to improve business efficiencies, track and manage assets to drive value to the bottom line,” said Mark Bartolomeo, vice president at Verizon. “In 2017, advancements in technology and standards, coupled with changing consumer behaviour and cost reductions, have made IoT enterprise-grade, and it’s just the tip of the iceberg in driving economic value across the board.”