25% of car buyers said that connectivity made a vehicle much more desirable at the time of purchase
– Compiled by Preeti Gaur
Enterprise adoption of the Internet of Things (IoT) is starting to gain momentum as the IoT market is set to rise to 5.4 billion connections by the year 2020. A Verizon report explains what is IoT, what the organizations are doing with it, and how businesses can get the most out of it. Read on
By connecting ‘things’ in the real world — such as cars, buildings, and industrial equipment — IoT promises to revolutionize how we live and work. From wearable devices to smart cities, the benefits reported have prompted organizations of all sizes to ask how IoT might affect their organization and their industry, and what they can do with it.
The report ‘State of the Market: The Internet of Things (IoT) 2015: Discover How IoT is Transforming Business Results’, details key factors that are driving the increase in IoT deployments and includes guidance for business and public sector leaders on developing an IoT strategy. The IoT market is likely to experience around 28% year-on-year growth, rising to 5.4 billion connections across the globe by 2020, counting cellular, fixed line, satellite, and short-range wireless connections, up from 1.2 billion devices in the year 2014.
In the automotive industry, Verizon’s telematics experts note that 14 car manufacturers account for 80 percent of the worldwide automotive market, and all of them have a connected car strategy. Additionally, ABI Research cites that organizations will introduce more than 13 million health and fitness tracking devices into the workplace by 2018. Verizon experts predict that by 2025 smart cities capabilities will become a critical consideration for companies deciding where to invest and open facilities, due to their impact on operating costs and talent availability.
“When you look across the spectrum, IoT covers a multitude of solutions, from wearable devices, to remote monitoring of energy management devices to industrial transportation to improve safety and efficiency. New use cases are created every day; however, the business case for IoT and enterprise adoption often gets overlooked,” says Mark Bartolomeo, vice president IoT Connected Solutions at Verizon. “Within the past year, amid an improving economy, we’ve seen a number of new entrants starting to use IoT as a roadmap to improve their customers’ experiences, accelerate growth and create new business models that are driving societal innovation.”
Factors fueling IoT
Various technological, political and social factors are driving the growth of IoT:
Declining cost of sensors, increasing connectivity, and data processing power is making the ROI equations for IoT projects look even more appealing.
According to a BCC Research report, the global market for sensors is expected to increase to $91.5 billion by 2016, showing a compound annual growth rate of 7.8 percent.
Use of social media & mobile technology transformed consumer and citizen expectations. Improving insight has become a strategic priority for many organizations. Use analytics and cloud-enabled platforms are making it possible to understand and engage with your customers better, whatever medium they choose. IoT can help by making services personal, better and accessible.
Changing regulatory requirements across a number of industries is also powering IoT adoption. Organizations are using IoT in their efforts to meet new environmental standards and safety targets. For example, smart grid solutions are enabling energy and utility companies to improve efficiency and cut waste. And train companies and automotive manufacturers are fitting vehicles with IoT-enabled systems that can predict and help prevent accidents.
The IoT market’s investor and consumer confidence has grown. This is making businesses more receptive to investing in new technologies. The ability to gather data and turn it into insight is an important factor in building and sustaining competitive advantage. IoT can help businesses to increase revenue, improve operational efficiency and bring out innovations. For example, industrial equipment manufacturers are selling outcomes, like machine hours, rather than just products.
M2M sensors can enable organizations to monitor assets, from elevators to shipping containers, in near real time. For example, food and drug manufacturers can monitor shipping containers for changes in temperature that could affect product quality and safety using cheap battery-powered sensors and 4G LTE connectivity. And farmers are using IoT to improve yields while conserving water, a precious commodity in many places.
The ‘off-the-shelf’ IoT solutions are also starting to materialize with greater frequency as a replacement for highly customized solutions, which have historically characterized many enterprise IoT implementations. And a broader IoT landscape brings greater security challenges. Digital certificates can help address growing C-suite and public concerns and meet regulatory demands around IoT and security.
IoT Growth Supports Current Trends
IoT business witnessed 45 percent year-over-year revenue growth in 2014, with 4GLTE activations growing by 135 percent. At present, Verizon manages more than 15 million IoT-enabled connections for a wide range of industries.
According to the report, M2M connections on Verizon’s network increased from 2013 to 2014 by sector:
Barriers to Growth
Recent growth in M2M connections and a global spotlight on IoT-enabled solutions notwithstanding, widespread enterprise adoption is currently low. Just 10 percent of enterprises have deployed IoT technologies extensively — suggesting that many organizations are in a pilot phase or are waiting for more insights from early adopters. This also applies to widely covered categories such as the connected car. According to Verizon’s telematics experts, more than 600 million vehicles worldwide are currently not connected to a network.
While the core technologies powering the Internet of Things — sensors, cloud computing, intelligent networking — are familiar to most businesses and public sector organizations, formulating a viable strategy and developing IoT solutions can be highly complex. There’s still a lot more work to be done in regard to the creation and ratification of industry standards.
“As machine-to-machine technology adoption continues to move downstream with millions of endpoints connected, it will change how we see cybersecurity and privacy,” Bartolomeo says. “Our role is to help key decision makers tackle complexities like security head-on by encouraging a more proactive posture in order to create value for their organizations while reducing potential risk.”
Source: State of the Market: The Internet of Things (IoT) 2015: Discover How IoT is Transforming Business
Measurable benefits from IoT projects
By 2025, organizations that adopt IoT extensively will be at least 10% more profitable than competitors that don’t.
• Transportation companies are saving millions of dollars by reducing fuel consumption using data captured, transmitted, and analyzed in near real-time.
• Local governments are making budgets go further with LED smart street lighting that doesn’t need regular maintenance, but can automatically report when it needs to be repaired.
• Utility companies are eliminating costly and inconvenient home visits to read meters by introducing smart meters that report more granular usage data without human intervention