Everyone knows the Internet of Things (IoT) is a transformative technology for consumers, vendors, and enterprises that’s in the process of becoming a historically huge market—measured in trillions, not billions, of dollars. That’s great, and most likely true, but perhaps a little vague in some respects. For example: What, exactly, do enterprises hope to gain from their investments in the IoT? Are they planning to use the IoT to save money on things they’re already doing, or do they see the technology as a way to create new businesses and boost revenue?
A new report from CompTIA purports to have the answer to that question, along with some other useful insights. Based on a survey of more than 500 U.S. businesses about their IoT activities, the tech industry association’s “2019 Trends in Internet of Things” report both confirms the conventional wisdom and raises some new questions. But let’s start with that first, big question: Is the enterprise IoT going to be about cost savings or revenue generation?
No clear agreement on IoT benefits
Unfortunately, it turns out that the answer is still a bit of mess, with widespread disagreement on the topic. The biggest group of respondents, approximately 35 percent, see the IoT primarily in terms of cost savings. “Just” 31 percent see it as a revenue-generation tool. The remaining 34 percent expect a mix of both cost reductions and new revenue.
CompTIABasically, we’ve got about a third of companies hoping to save some money, another third looking for new revenue from increased production, monetizing data or creating product-as-a-service offerings, and the last third expecting a little of both. That could mean that the IoT offers something for everyone, solving whatever problems a company might face, which is how Seth Robinson, senior director for technology analysis at CompTIA pitched the results in a statement:
“This recognition that IoT is not simply a tool for cost savings, but a potential source of new revenue, is mirrored by our finding that for a majority of companies, funding for IoT projects often comes from places other than the IT department. This demonstrates not only the importance of IoT to future strategy, but the company-wide impact IoT tends to have.”
In other words, the IoT fights crime and cures cancer! It’s a deodorant that doubles as a floor wax!
The IoT’s ROI is still tough to calculate
Well, maybe. To my mind, though, the results say something a bit more concerning. Despite continued optimism—the report suggests that “the overall perception of IoT is positive and has mostly held steady over the past few years”—businesses don’t really have a clue about the benefits the IoT will bring. They know it’s big, they know it’s transformative, but they’re still struggling to understand the changes it will create.
From where I sit, that lack of clarity—more than concerns about security or complexity or skills shortages or other commonly cited IoT challenges (many of which also show up in the CompTIA report)—looms as perhaps the biggest long-term threat to the emergence of that multi-trillion-dollar IoT market.
Significantly, survey respondents say they’re having trouble figuring out the ROI on their IoT efforts. Nearly six in 10 say it will be very difficult or moderately difficult to make that ROI calculation.
So, let’s get this straight: IoT technology is driving enormous transformational change with trillions of dollars at stake, but most companies can’t tell how they’re going to make money on their investments.
Listen, no one is saying the IoT isn’t going to have a profound effect on everything from retail to industrial maintenance (not to mention consumer applications from smart homes and buildings to autonomous vehicles). It’s just that we may be putting the cart before the horse here. Perhaps we need to spend more time figuring out what we really want to do with IoT technology and how we expect it to bring value, not just throwing it at every problem we can think of and then looking to see what sticks.
Thinking big?
The opportunity—and the challenge—is that many IoT projects extend beyond the IT department. That lifts their potential value, but also makes ROI analysis “inevitably … more extensive than it is for standard IT projects,” according to the report.
Ultimately, the future of enterprise IoT usage will depend on seeing the big picture. According to the report, only about a quarter of surveyed companies currently have formal IoT initiatives in place. Tellingly, while almost two-thirds of those IoT initiatives are building IoT into existing business processes, more than half (54 percent) of executive-level respondents see IoT as an addition to business processes and almost half (45 percent) see it as a standalone IT project. That disconnect suggests that the C-suite may be thinking bigger about the IoT than are their business and technology teams.