A new study on IoT adoption commissioned by Aruba Networks, a networking vendor and Hewlett Packard Enterprise company, has yielded some food for thought for channel partners.
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The study, The Internet of Things: Today and Tomorrow, polled 3,100 IT and business decision makers across 20 countries. Among its key findings: Organizations adopting IoT have seen better-than-expected returns on their investments. Respondents ranged from a number of vertical industries, including enterprise, healthcare, industrial, retail and government sectors.
“From a partner perspective, there is obviously the need to get on the [IoT] bandwagon … because there are opportunities to be had here,” said Chris Kozup, vice president of marketing at Aruba.
According to the Aruba report, 56% of respondents had implemented IoT in their businesses, citing a 34% average return of investment. Comparing customers’ pre-adoption expectations with the post-adoption results, Kozup said the study revealed an “expectations dividend.” For example, while 16% of business leaders expected large profit gains from their IoT investments, 32% said they realized profit gains following adoption. And while 29% believed they would see their IoT projects yield business efficiencies, 46% said their projects resulted in efficiency gains.
Kozup said the expectations dividend pointed to “a fair amount of conservatism” surrounding IoT adoption. He added this is a conventional attitude toward emerging technologies. “People are unsure about what [the technologies are] going to deliver, what they are going to mean, so they take generally a conservative approach,” he said.
IoT adoption trends within vertical markets
The Aruba study also shed light on how five vertical segments are currently working with IoT technology.
Enterprises: Among enterprise respondents, 72% said they have adopted IoT devices. Top IoT uses for improving employee productivity included remote monitoring and indoor location-based services. A fifth of respondents cited remote operation of building lighting and temperature as an important use for IoT today, Aruba noted.
Seventy-eight percent of business leaders reported IoT has improved the effectiveness of their IT teams. Seventy-five percent said IoT has increased profitability.
Industrial sector: After enterprises, the industrial sector reported the highest degree of IoT adoption: Sixty-two percent of industrial sector respondents said they have deployed IoT. The study revealed monitoring and maintaining industrial functions as the most important use. Aruba also noted a projected boost in IP-based surveillance camera implementation within industrial organizations: Merely 6% of respondents said they have deployed IP-based surveillance cameras today, while 32% cited the technology as a key use case for future implementations.
Eighty-three percent of respondents cited business efficiency gains, and 80% saw increased visibility across their organization.
Healthcare industry: Sixty-percent of healthcare respondents said they have implemented IoT, with monitoring and maintenance, cited by 42% as the No. 1 use.
Eighty percent saw an increase in innovation following IoT adoption, and 78% cited cost savings.
Retail sector: About half of the retailer respondents currently use IoT technology, and 81% of those have reported improvements in customer experiences. The No. 1 use case was in-store location services that send shoppers personalized offers and product information, following by monitoring and maintenance. Forty percent of retailers cited surveillance among their top three uses for IoT.
Government: Government was the slowest in IoT adoption among the vertical segments, with 42% of municipalities currently using IoT devices and sensors, according to the study. Thirty-five percent of IT decision makers asserted little or no understanding of IoT among their executive ranks, which suggested that education is a major obstacle to mainstream adoption, Aruba said.
About half of government IT departments struggle with legacy technology today, yet 70% of those who adopted IoT cited cost savings and improved visibility across the organization as significant benefits.
Top barriers to adoption
Despite the benefits cited by respondents, critical challenges remain, particularly around security. Eighty-four percent of the organizations that had adopted IoT reported experiencing IoT-related breaches.
IoT security can be complex and unfamiliar to organizations, Kozup said. While organizations today may fully grasp the security challenges involving traditional compute devices such as personal mobile devices, many fail to understand the vulnerabilities involved in their other connected “things.” HVAC systems, for example, can create security issues. “All of sudden, you have … heating and cooling systems that are now accessing the corporate network,” he said.
The study identified several other obstacles that IT leaders believe hinder IoT’s greater business impact: cost of implementation, cited by 50% of respondents; maintenance, cited by 44%; and integration of legacy technology, cited by 43%.
Capturing and effectively using data was another key challenge. Ninety-eight percent of respondents that had implemented IoT said they can analyze data, yet 97% cited difficulties deriving value from the data. Additionally, 39% of businesses said they don’t currently extract and analyze data within corporate networks or use the data to improve business decisions.