Study finds that Internet of Things initiatives fail because of cost, complexity, and unclear ROI
A new study commissioned by Microsoft finds that 88% of enterprise IT planners believe the adoption of IoT technologies and services is critical to their business success. However, 30% of all IoT projects end in the proof-of-concept phase because of escalating costs, complexity, and unclear return on investment.
The Lowdown: The study of more than 3,000 enterprise IT executives and team leaders queried the perception and state of IoT need and adoption. The vast majority see IoT as essential to their businesses’ future, and 85% are currently adopting some form of IoT technology. The majority of IoT adopters believe they’ll see at least a 30% ROI through cost savings and operational efficiency improvements over the next two years.
The Details: While businesses are optimistic and enthusiastic about the role IoT will play in their future, many study participants expressed concerns about the ability to successfully implement IoT technologies. Nearly one-third of IoT projects fail in the proof-of-concept phase because of escalating costs and high complexity. Four in 10 IT leaders say the complexity and technical challenges are often “deal breakers” for IoT projects. And 47% of IT leaders say the market lacks enough skilled workers to build and maintain the fabric of IoT devices and systems.
The Impact: Despite the challenges, though, IoT is an unstoppable trend. According to IDC, businesses will spend $745 billion in 2019 on IoT devices, software, cloud services, and support for integrating systems with legacy infrastructure. The concern over the lack of skilled workers is an opportunity for solution providers, which can provide the expertise and resources – on-demand or through persistent managed and professional services – to aid business adoption and optimization of IoT systems.
The Buzz: “IoT is transforming every industry from retail and agriculture to healthcare and manufacturing by harnessing AI, edge computing, and emerging capabilities like 5G across thousands of sensors and devices,” said Sam George, head of Azure IoT at Microsoft. “We’re at a critical tipping point where industry challenges like skills shortages, security concerns, and solution complexity will hinder innovation and pose significant risk to business and consumer data. It’s imperative that technology providers, standards organizations, and industry solution partners come together to help simplify and secure IoT.”
Channelnomics Point of View: IoT is a big trend in the technology industry, but still nascent in the channel. Solution providers have been slow to develop IoT practices, largely due to the lack of familiarity with new devices, software, vertical use cases, and data carrier services. Nevertheless, interest is growing. According to The 2112 Group’s 2019 Channel Forecast report, 28% of solution providers see IoT as the best growth opportunity of the year. Additionally, several vendors and distributors are offering solution providers more resources and support to stimulate IoT business development.