The IoT will have a significant or transformational impact on businesses over the next three years.
Nearly in 4 in 10 organizations expect the Internet of Things (IoT) to transform their business or offer significant new revenue and cost-savings opportunities over the next three years, according to a new study by Gartner. More so, the research firm found approximately 60% of enterprises believe the IoT will offer cost-saving opportunities in the long term.
The survey, which was carried out in October 2014 among a Gartner-managed panel, was composed of 463 IT and business leaders who had knowledge of their organization’s IoT strategy. However, the research did find that many of their companies have not yet established clear business or technical leadership for their IoT efforts.
“The survey confirmed that the IoT is very immature, and many organizations have only just started experimenting with it,” explained Gartner Vice President Nick Jones. “Only a small minority have deployed solutions in a production environment. However, the falling costs of networking and processing mean that there are few economic inhibitors to adding sensing and communications to products costing as little as a few tens of dollars. The real challenge of the IoT is less in making products ‘smart’ and more in understanding the business opportunities enabled by smart products and new ecosystems.”
A useful indicator of the degree to which organizations are prepared for the IoT is whether they’ve identified technical and business leadership for their IoT efforts. The study found that less than one-quarter of respondents have established clear business leadership for the IoT, either in the form of a single organizational unit owning the issue or multiple business units taking ownership of separate IoT efforts.
“While a single leader for the IoT is not essential, leadership and vision are important, even in the form of several leaders from different business units,” said Steve Kleynhans, Gartner Research Vice President.
Furthermore, just over one-third (35%) of respondents who expect the IoT to have a significant or transformational impact are often working for organizations have some form of established leadership in place. Many survey respondents felt that the senior levels of their organizations don’t yet have a good understanding of its potential impact; yet, it’s important to note that attitudes toward the IoT vary widely by industry. For example, board of directors’ understanding of the IoT was rated as particularly weak in government, education, banking and insurance, whereas the communications and services industries scored above-average ratings for senior executive understanding of the IoT.
“Security and privacy are, unsurprisingly, top issues and industries dealing with intangibles were more concerned with security and privacy than those dealing with tangibles because many operate in very security-aware areas such as banking,” Jones added.
Last year, Gartner projected over 20% of enterprises will have digital security services for business initiatives using IoT devices by 2017. The firm also forecasted that the IoT will be comprised of 26 billion devices, generating over $300 billion in incremental revenue in the next five years. Not to mention, 50% of all IoT solutions will originate from startups less than three years old.
Nonetheless, Gartner did admit that experts will soon begin to emerge within enterprises. “We expect that over the next three years, more organizations will establish clear leadership, and more will recognize the value of some form of an IoT center of excellence because of the need to master a wide range of new technologies and skills,” Kleynhans concluded.
Interested in learning more? You can find the entire study from Gartner here. Meanwhile, you can discover the latest in the Internet of Things here.