IoT vendors urged to address barriers to adoption and provide more targeted solutions
The combined markets for the Internet of Things (IoT) are set to grow to $520bn by 2021, more than double the $235bn spent in 2017, a new study predicts.
Yet despite these explosive growth predictions, according to Bain & Company’s latest report, Unlocking Opportunities in the Internet of Things, industrial and enterprise customers are tempering their expectations about the pace of IoT adoption.
This is because they are realising that complete solutions may take longer to implement and yield the expected return. In response, while they would like to go faster, they are planning less extensive IoT implementations by 2020 than they had planned just two years ago, the report revealed.
Bain & Co called on IoT vendors seeking to tap into this “pent-up demand” to better address barriers to adoption, provide more consumable solutions, and ease concerns about integration with existing information technology and operational systems.
“Our survey found that vendors are aligned with customers’ concerns about some barriers, such as security, returns on investment, but less so on others – notably integration, interoperability and data portability,” Ann Bosche, a partner in Bain & Company’s global technology practice and an IoT expert.
“Based on our experience with previous technology cycles, the key to addressing these concerns lies in focusing on fewer industries in order to learn what customers really want and need to ease adoption.”
Nonetheless, despite these concerns, the report found that enterprise customers are still running more proofs of concept than they were two years ago. Additionally, more customers are considering exploring new use cases: 60 per cent in 2018 compared with fewer than 40 per cent in 2016.
“The next few years will be critical to the development of IoT markets as leaders continue to make gains and expand their industry-specific offers”
Along with analytics and infrastructure software vendors, cloud service providers (CSPs), particularly Amazon Web Services (AWS) and Microsoft Azure, have emerged as more prominent and influential vendors in the space, said Bain.
CSPs are lowering barriers to IoT adoption, allowing for simpler implementations and making it easier to adopt selected use cases and scale up quickly. They also leverage their deep expertise in analytics to expand across “IoT battlegrounds”, as well as to fortify their position in the analytics and cloud battleground for enterprise and industrial customers.
However, Bain cautioned that these broad horizontal services provide little optimisation for industry-specific applications, leaving what it describes as a “significant opportunity” for industry solutions from systems integrators, application developers, industry IoT platform specialists, device makers and telcos.
“The next few years will be critical to the development of IoT markets as leaders continue to make gains and expand their industry-specific offers,” added Michael Schallehn, a partner in Bain & Company’s global technology practice and an IoT expert.
“Incumbents that fail to move quickly enough to address customers’ needs are likely to get leapfrogged by more nimble competitors. We think device makers, in particular, run the risk of seeing software and analytics competitors capture the value of solutions, leaving them to deliver lower-profitability hardware components.”
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