Our research over the past year has revealed three important trends driving Internet of Things (IoT) adoption as we move into 2016.
It’s no longer just hype
First, IoT systems are moving beyond the hype. If you don’t have a strategy for implementing IoT changes in your business, you may already be behind competitors in your industry. There are no excuses here as industry use cases are well defined, including manufacturing, energy and utilities, transportation and retail. Business executives and developers are indicating through surveys that they are increasingly implementing IoT systems in order to transform business processes.
- More than 40 percent of organizations expect the IoT to transform their business or offer significant new revenue or cost-savings opportunities over the next three years.
- 62 percent of executives surveyed say they have already adopted IoT-based systems or have plans to do so.
- 28 percent of software developers say they are currently working on applications for IoT-connected devices.
Data and analytics will drive value
Second, a solid approach to big data and analytics is necessary to enhance the value of IoT implementations. Simply connecting lots of sensors and devices to a network is not enough. You must have an IoT information strategy. Data skills are needed to understand how to collect and integrate IoT data with data from other sources such as internal data stores. Advanced analytics and dashboards must be built to deliver insights from the data that these “things” generate. It is certain that business value will come only to those who improve their data capabilities including storage, integration and analysis.
- IoT applications are generating large volumes of data that could reach 507.5 zettabytes per year (42.3 zettabytes per month) by 2019.
- 35 percent of manufacturers are currently collecting and using data generated by smart sensors to enhance manufacturing/operating processes.
- 79 percent of IoT app developers spend at least 25 percent of their time with analytics or databases.
Challenges must be overcome
Finally, there are adoption challenges including security and standardization across all elements of the IoT. Overcoming these challenges is essential to widespread adoption. Organizations must consider how to manage the complexities of connecting to a seemingly unlimited number of devices. In addition, standards must be developed so IoT devices, platforms and systems can communicate with each other.
- 77 percent of U.S. IT and cybersecurity professionals say manufacturers are not implementing sufficient security in IoT devices.
- More than 20 percent of enterprises will have digital security services devoted to protecting business initiatives using devices and services in IoT by year-end 2017.
- 39 percent of executives say concerns about privacy and security is a major barrier to IoT investment.
To fully implement IoT systems, businesses need to establish an integrated fabric of devices, data, connections, processes and people. This requires that IoT systems be built on top of a solid technology platform including cloud, analytics, big data and mobile. Most important, security must be designed into IoT systems at every level.
Even with all the challenges, once implemented, IoT systems can be a game-changer for enterprises that embrace them, changing the way work gets done and improving the top and bottom lines. In 2016, watch for innovative industry leaders to break through these challenges and begin disrupting industry models and processes.
So the IoT has moved beyond hype. It is a key technology solution that will fuel the cognitive business era. IoT systems offer concrete business benefits like increased operating efficiencies, improved customer experiences and accelerated innovation. In 2016, we will start seeing more companies realize these benefits.
- Read the IBM Center for Applied Insights blog posts on IoT.
- Learn more about the IBM point of view on IoT.
- Download the new IBM Institute for Business Value report: The Business of Things.
- Read The Internet of Things: Mapping the Value Beyond the Hype, a report by the McKinsey Global Institute.
Re-published on Forbes on March 1