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Taking the pulse of Enterprise IoT

A new survey suggests that the enterprise Internet of Things is poised for strong growth. Here are the trends companies need to understand.

The past few years have witnessed a surge of interest in the Internet of Things (IoT)—the network of connected “smart” devices that communicate seamlessly over the Internet. Although much media attention has focused on consumer products, some of the most exciting IoT innovations have occurred within the business sector, where the combination of sensor data and sophisticated analytical algorithms has allowed companies to streamline business processes, increase productivity, and develop leading-edge products.

As with any nascent sector, however, IoT faces much uncertainty related to regulatory developments, customer demand, and technological advances. For enterprise IoT, many questions also remain about its utility and impact, since most companies are still in the early stages of implementation. To date, they have only achieved modest, incremental benefits from their enterprise IoT programs. With limited evidence of bottom-line impact, executives are cautious about increasing their enterprise IoT investments, and few have embarked on large-scale initiatives designed to transform their operations or enable new products and services.

This situation may soon change, however. We recently began surveying business leaders about enterprise IoT adoption, including the challenges that are preventing them from undertaking more extensive efforts. In this article, we present preliminary findings from the fifty respondents that have provided information to date. We will later analyze and present further findings from about 300 additional respondents (see sidebar, “Our survey methodology”). The results for the first respondents allowed us to identify some directional trends that suggest that enterprise IoT is poised for strong growth because of its ability to improve the customer experience, increase productivity, and enable the development of innovative products and services.

Enterprise IoT is gaining momentum

Although enterprise IoT is a relatively new development, 98 percent of survey respondents reported that most companies within their industry includeenterprise IoT initiatives in their strategic road maps, including those related to improving service operations, increasing visibility into operations, enabling new business models, and creating new product and service offerings (Exhibit 1).1Examples of these new programs in these areas abound. For instance, an elevator company is creating a suite of IoT-enabled services to improve the reliability of its products and decrease downtime. In addition to lowering operating costs for the company’s customers, these applications could potentially transform its business model.