Most businesses will be using IoT services within the next two years and almost half of IT budgets will be dedicated to IoT projects, according to a new survey.
The study of 200 businesses by research outfit Machina Research, found that nearly two-thirds of companies are currently working with systems integrators to progress internal Internet of Things projects. On average, 44 percent of IT budgets will be solely used for the purpose of IoT project development and maintenance by 2020.
The analysts also found that 76 percent of enterprises indicate they have short-term (i.e. within next two years) goals for the integration of new IoT solutions with legacy systems. While, 98 percent of decision makers consider product monitoring useful to their businesses, with 78 percent indicating the ability to receive real-time data from their products would be extremely beneficial.
The research report, co-sponsored by InterDigital and Telit, shows that overall demand for IoT applications and services remains extremely high, with the vast majority of decision makers (91 per cent) expected to be using some form of commercial IoT service within the next two years. Indeed, almost half (48 per cent) are benefitting from them today.
Related: How to get C-level execs to back your Internet of Things project
Business sees financial benefits of IoT
In terms of driving adoption, cost savings held the edge over expanding business, with monitoring for maintenance (25 percent) and reducing operational expenses (25 percent) comprising half of respondents’ top strategic reasons for deployment, versus just over one-third of respondents who favoured expanding revenue opportunities (18 percent) or better competing with rival products and services (18 percent).
Decision makers singled out the importance of agreeing on a set of IoT standards to future-proof new services. Such an open commitment to standardisation will ease the task facing systems integrators in developing and building adaptable and interoperable applications.
Of the businesses participating in the research, 66 percent highlighted standards as being either crucial or significantly important in the adoption of the IoT services over the next couple of years. As part of the solution for solving the complexity of incorporating IoT, 76 percent of companies are either exclusively or primarily focusing on integrating legacy business systems with IoT solutions to get them fit for purpose.
“The importance of marrying IoT with the existing legacy systems cannot be downplayed. Along with having a set of standards in place, businesses will be leaning heavily on system integrators to weave the future with the present,” said Andy Castonguay, principal analyst, Machina Research and lead author of the report.
“Our research shows businesses are prepared to set aside nearly half of their IT budgets by 2020 to get this right, demonstrating just how much of an opportunity IoT represents.”
Jim Nolan, executive VP of IoT solutions at InterDigital, said that businesses have woken up to the transformational benefits of the Internet of Things and are rushing to deploy those services, but at the same time appreciate there may be a rocky road ahead turning a good idea into a technically feasible and profitable one.
“This is where companies like IBM, HP, Tech Mahindra, Wipro, Accenture and other system integrators are worth their weight in gold, making the link between specialised IoT providers and the applications that companies need to leverage connectivity,” he said.
IoT adoption in its infancy
Mark Furness, founder and CEO of essensys told Internet of Business that the thing that makes IoT so different to other tech projects is the fact that the concept is still relatively new. Businesses are trying to work out how best to use the technology, what’s a gimmick and what will make a tangible business difference.
“There’s a balance we have to observe to get everything right and working in a way that enables the technology to make genuine improvements. For example, Millennials are very much at the centre of the move towards smarter workplaces. They have high expectations of their technology and demand seamless flexibility from their offices. However, not everyone is tech-savvy and resistance to change could leave your shiny new initiatives gathering dust,” he said.
Related: Are you an Internet of Things expert? Take our quiz and find out!