According to a new report published by Bain and Company, the combined markets of the Internet of Things (IoT) will grow to about $520 billion in 2021, more than double the $235 billion spent in 2017.
The 2018 survey, which includes purchases of devices, software, and related services, shows that businesses are increasing their appetite for connected devices alongside growing consumer demand for everything from smart speakers to Wi-Fi connected lightbulbs.
There is hope that newer IoT products will have more of their own computing power and artificial intelligence apps built in, making them more independent and efficient, and at least in theory, boosting sales.
Since Bain and Co.’s last extensive survey on IoT and analytics two years ago, customers believe that vendors have made little progress on lowering the most significant barriers to IoT adoption – including security, ease of integration with existing Information Technology (IT) and Operation Technology (OT) systems, and uncertain returns on investment. These customers have extrapolated their expectations about when those use cases will reach scale in their organizations. On average, they are planning less extensive IoT implementations by 2020 than they were just a couple of years ago.
However, despite these concerns, enterprise and industrial customers still see success within their reach. They are still running more proofs of concept than they were two years ago, and more customers are considering new use cases, with 60% in 2018 compared with less than 40% in 2016.
Some expected uses of connected devices have not caught on as much as expected. For example, Bain pointed to elevator manufacturer Schindler working with General Electric’s Predix Platform to implement a broad predictive maintenance program designed to optimize maintenance on more than 60,000 elevators and escalators worldwide. The lack of historical data and problems integrating different data formats would make predicting maintenance needs difficult. “Insights have been harder to glean than first promised,” Bain noted.
Overall, the biggest concerns business customers have about IoT remain the same now as in the 2016 survey. Around 42% of companies cited risk of security weaknesses that could allow hackers to infiltrate their computer systems, while another 29% cited difficulties integrating new and old systems, and another 28% feared poor returns on their investment.
The Bottom Line
There is no doubt that the Internet of Thing is a burgeoning industry, with spending doubling that of two years ago, according to a survey by Bain and Company. However, the survey also goes onto indicate that customer expectations of progress still errs on the side of pessimism. There are plenty of new use cases considering the advancement of IoT technology, but in the case of the Schindler/General Electric elevator maintenance program, there is still some ways to go. On top of it all, concern for IoT security is still a serious issue that needs to be addressed if the IoT industry wants to continue to be relevant.