IoT Deployments Extending Beyond Industrial
More than three-quarters of global executives surveyed in a new Internet of Things study said they have launched IoT initiatives and those efforts are beginning to expand beyond early adopters in the industrial manufacturing sector.
The latest survey of the emerging IoT released this week by Tata Global Consultancy emphasizes that new business sectors like heavy equipment manufacturers are eyeing the IoT as a way to link expensive machinery as a way to, for example, schedule maintenance and predict equipment failures.
The Tata survey of more than 3,000 executives in the Asia, Europe and North and Latin America between March and April also predicts that IoT spending will jump by 20 percent by 2018 to an average of $103 million per company. Overall forecasts for IoT spending range as high as $1.7 trillion by 2020, according to market watcher International Data Corp.
The Tata survey also found that manufacturers of big-ticket items like construction equipment would initially spend more on IoT infrastructure "by a wide margin."
"Spending on the IoT correlates strongly with the price of a company’s products or services," the survey found. "Those whose offerings sell for more than $10 million on average (for example, makers of aircraft engines and power turbines) will spend an average $335 million each this year on IoT initiatives."
By contrast, "those with products priced at $100 or less will spend about one-eighth that amount, an average $39 million," Tata concluded.
Initially, mobile applications are the leading IoT technology, with about half of early adopters using it to track customers and product while keeping tabs on their supply chains. About one-quarter of respondents said they track products via embedded sensors, which is widely viewed as among the early and promising IoT application. Retailers use the networking technology at roughly the same percentage to track customers in their stores, the survey found.
Some early adopters are also reporting an impact on their bottom line. Companies with an IoT initiative in place reported an average revenue increase of 16 percent in 2014. Applications range from tailored marketing campaigns to improved customer service. How long it takes to recoup upfront IoT infrastructure investments remains to be seen.
While retailers continue to embrace IoT technologies, the Tata survey confirmed what previous studies have reported: industrial manufacturers remain far ahead of other sectors in terms of the pace and breadth of their IoT deployments. As a result, they reported the largest revenue increases last year (29 percent) and the most optimistic forecast for 2015 revenues derived from IoT investments: 27 percent by 2018.
These early adopters "are more likely to digitally reimagine their businesses and produce substantial value for customers – not just value for themselves," the survey stressed. Another key to successful deployments was starting small with test investments before attempting to scale IoT deployments.
Meanwhile, North American and European companies remain well ahead of Asian and Latin America in terms of overall IoT investments. U.S. and Canadian firms said they investing 0.45 percent of revenues on IoT initiatives while European enterprises are investing about 0.4 percent of revenues. Asian-Pacific investment totals 0.34 percent of company revenue while Latin American spending is expected to reach 0.23 percent of total revenue, the survey found.