Organizations looking for improved security, efficiencies, and costs
Organizations that already have Internet of Things (IoT) programs underway are increasingly adopting blockchain technology to improve security, increase efficiencies, and lower costs, according to a recent survey by Gartner analysts.
The Lowdown: The combination of the two technologies makes sense, especially for enterprises in industries that include both the movement of physical goods and the delivery of virtual goods and services, such as energy, pharmaceuticals, natural resources, utilities, and transportation, where adoption is highest. Conversely, financial services companies have among the lowest rates of adoption.
The Details: The analyst firm used an online survey to question more than 500 people at the manager level and above who have primary responsibilities for making IoT decisions. The survey found that 75% of IoT technology adopters in the United States have already embraced blockchain or are planning to embrace it by the end of 2020. Of those, 86% are implementing the two technologies together in projects.
In addition, almost two-thirds of those enterprises implementing blockchain technologies with their IoT initiatives said improved security and trust was the primary or secondary driver. More than half named increased business efficiency and lower costs as the top benefits.
The Impact: Many organizations that have launched IoT projects are focusing on building security, trust, and transparency in regards to the management and movement of physical things to improve situational awareness and efficiencies, according to Avivah Litan, distinguished vice president at Gartner. Through 2024, more than 80% of enterprises with combined IoT and blockchain solutions will have to upgrade them at least once or twice to adapt to such challenges as scalability, security, and reliability, Litan said.
The Buzz: “The integration of IoT and blockchain networks is a sweet spot for digital transformation and innovation,” Litan said. “It’s actually moving ahead at a much faster pace than expected, according to the survey. These results are significant and much stronger than we anticipated. They emphasize that although both blockchain and IoT are still in the early stages of adoption, coupled with the fact that blockchain technology is still immature itself, enterprises have started combining them to drive favorable business outcomes. … In the long term, we expect the combination of IoT and blockchain to enable innovative devices and business models, but the necessary evolution in both blockchain and IoT will take five to 10 years to achieve maturity.”