Enthusiasm for IoT waning on both sides of the Atlantic, suggests study
- While Covid-19 concern underpins everything, security and ‘onboarding’ are major issues
- Projects delayed, down-scaled or canned altogether and bounce-back is several years away
- Connectivity also seen as a big problem
- In the US, 5G lags well behind Intelligent Edge and LPWAN as IoT enablers
More evidence has emerged that, in some sectors, in both the US and the UK, enthusiasm for IoT is on the wane. The Covid-19 pandemic is the root cause but there are other factors at work. The first is growing concerns about the security of IoT systems and networks and their vulnerability to cyber-attacks. The second is the difficulties many are facing when attempting to deploy,’ onboard’, integrate and manage a full network of IoT devices: It seems it’s not quite as straightforward and easy as the huffing and puffing of the industry hype machine led pioneers to believe. The net result is that investments in IoT are either being cut back, delayed or in some cases, completely cancelled, and it could be several years before the market bounces back.
Those are the headline takeaways from the new State of IoT Adoption Study that was commissioned by Eseye, the England-headquartered global IoT specialist and undertaken on its behalf by the London-based market research organisation Opinion Matters. The report is detailed, easily accessible, eminently readable and well worth downloading.
The survey was conducted among 250 UK-based and 250 US-based senior decision makers and implementers of IoT strategy within the five key vertical markets of: EV Charging and Smart Grid; Healthcare and Medical Devices; Manufacturing; Smart Vending; and Supply Chain and Logistics. The report throws light on the the considerable differences between the US and UK IoT markets and the priorities and approaches those differences inform on either side of the North Atlantic.
Covid-19 continues to wreak havoc and 34 per cent of US respondents to the Eseye survey cited the pandemic as the main reason for cutting back on IoT investment plans. However, across the ocean in the UK, just 19 per cent respondents said the global pandemic was the base reason for their caution. Deeper analysis showed that fewer US companies were involved in large IoT projects than their British counterparts. Only 13 per cent of US respondent companies had deployed more than 10,000 devices ands a mere 2 per cent had deployed more than 100,000, a state of affairs which draws Eseye to conclude that the US IoT market is not as mature as it is in the UK and that America is at a different and more tentative stage of IoT development.
The study also found that the bigger the project, the more quickly an organisation embraces IoT as a given technological fact of life and adapts itself to change. Thus, those with the greater number of deployed devices have reached a tipping point in their acceptance of IoT and thus plan to deploy over the next 12 months, whilst those tentatively dipping their toes into the IoT tide hold themselves back from taking a headlong plunge into uncertain waters.
Meanwhile, 41 per cent of those US companies surveyed regard security as a major concern and challenge for the implementation of IoT: Some 36 per cent of UK respondents felt the same.
“Onboarding”, the design, configuration, setting-up, testing and certification of IoT devices, is also a major headache and highly significant factor in the less than wholehearted uptake of IoT solutions. That was the view of 41 per cent of US respondents and 29 per cent of those from the UK. Because of such understandable concern and caution, 75 per cent of US organisations interviewed said IoT projects they undertook in 2020 had failed to meet both their both their expectations and potential.
Significantly, and worryingly, the deployment of cellular IoT systems is nowhere near reaching the critical mass that would result is mass roll-outs and those few that are in place have so far been slow, small and limited in scope. What’s more, 35 per cent said cellular connectivity across borders between regions and multiple individual nations is a very difficult, cumbersome and bureaucratic process. What’s more, 5G is not highly rated as an IoT enabler.
Hi-Ho, Silver Lining
It’s not all doom and gloom though. Of all US and UK respondents combined, 86 per cent say IoT is a priority for their businesses, even if it has been placed on the back-burner for the time being. Some 49 per cent said they are planning to implement either a first or a further IoT project - but not for two or three years.
However, when initiatives do eventually get the green light, 89 per cent of all respondents say they will increase the amount that will spend on solutions and 44 per cent are confident enough to forecast they will up their IoT budget by between 51 and 100 per cent. There’s even a discernible silver-lining where Covid-19 is concerned, with 27 per cent of those surveyed saying the pandemic has actually incentivised them into increasing the pace of their IoT plans and 31 per cent upping their budgets to accommodate them.
Those surveyed acknowledged that major motivators for deploying IoT systems and solutions are to shake up and replace traditional business models, to disrupt and minimise competition and to exploit new business opportunities. Respondents see the benefits to be gained from IoT as the chance to enter new markets (35 per cent), to increase profits (34 per cent) and to deliver new lines of business (32 per cent). More US companies said the opportunity to get into new markets is a key reason for becoming serious IoT players than did UK enterprises, although there really wasn’t much difference in ambition between those on one side of the Atlantic or the other.
Given the effects the global pandemic has had on economies, societies and working practices and the ever-growing demand for ever-more bandwidth that is a result, respondents also regard cloud and remote access technologies as drivers leading the digital transformation that is now underway. Intelligent Edge was cited as a vital component in plans for digital transformation by 42 per cent of respondents, while 41 per cent look to LPWAN. Low-power wide-area networks are wireless telecoms systems wide area that, among other applications, allow long-range communications at a low bit rate between sensors operated by batteries - hence their potential importance to IoT as processing moves closer to the network edge.
US respondents to the survey rated LPWAN and intelligent edge technologies considerably higher that those of 5G, which is bad news for American telcos and mobile operators. US companies polled put 5G in fourth place in the list of technology drivers while British respondents put 5G firmly in close second place.
The report also indicates that IoT connectivity is regarded as a much bigger challenge in the UK than it is in the US. Indeed, 41 per cent of British respondents regard it as a real problem whereas only 29 per cent of those polled in the US felt the same. Concerns over device deployment loom larger in the UK than in the US - by a 36 per cent count as against 28 per cent. The Eseye report puts his down to the fact that, in general, British companies routinely manage multi-region deployments whereas, in the US, IoT projects tend to focus on the national domestic market.
Nick Earle, the CEO of Eseye commented, “There have been a number of false starts with predictions [about IoT] a decade ago that were clearly overstated. Fast forward to 2021 and Covid-19 has accelerated IoT trends that were already underway as large enterprises move from experimenting to understanding how to deploy IoT; our research certainly found that the larger the project, the faster the acceleration as organisations embrace IoT."
He added, “However, adoption is not without challenges. We know security and connectivity have been an issue and uncertainty about both initial and lifetime device connectivity is a huge concern for businesses rolling out large-scale IoT projects.”
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