Social and political factors are coalescing with technological advances to accelerate enterprises making use of “Internet of Things” (IoT) technology. Though usage is low on an absolute basis, the declining costs of IoT components, such as sensors, connectivity and processing power, are among the key factors fueling enterprise adoption, according to Verizon’s “State of the Market: The Internet of Things (IoT) 2015: Discover How IoT is Transforming Business Results.”
Regulatory changes across industries, along with the falling costs of IoT technology and growing familiarity among enterprises, are adding momentum to enterprise IoT adoption, according to Verizon. “When you look across the spectrum, IoT covers a multitude of solutions, from wearable devices, to remote monitoring of energy management devices to industrial transportation to improve safety and efficiency,” Verizon’s Vice President of IoT Connected Solutions Mark Bartolomeo was quoted in a press release.
“New use cases are created every day; however, the business case for IoT and enterprise adoption often gets overlooked. Within the past year, amid an improving economy, we’ve seen a number of new entrants starting to use IoT as a roadmap to improve their customers’ experiences, accelerate growth and create new business models that are driving societal innovation.”
The emergence of cheaper, off-the-shelf IoT solutions as an alternative to bespoke solutions is also adding momentum to enterprise IoT adoption, Verizon points out.
Business IoT Connections Forecast
Growing use also brings new, and greater, security concerns, however.
Digital certificates, Verizon says, “can help address growing C-suite and public concerns and meet regulatory demands around IoT and security.”
ABI Research, which was commissioned to produce Verizon’s 2015 state of IoT report, forecasts the number of global IoT connections to skyrocket, more than quadrupling between 2014 and 2020 to reach an estimated 5.4 billion.
Enterprise adoption is particularly high among auto manufacturers. Verizon’s telematics experts note that 14 auto manufacturers which account for 80 percent of the global market have connected car strategies.
Health and fitness is another leading economic sector in terms of enterprise IoT adoption. The press release cites an ABI Research forecast calling for organizations to introduce more than 13 million health and fitness tracking devices into the workplace by 2018.
The drive to make cities “smart” is also fueling enterprise IoT adoption. Verizon expects smart city-related IoT applications “will become a critical consideration for companies deciding where to invest and open facilities, due to their impact on operating costs and talent availability.”
Verizon’s IoT Business
Verizon’s own IoT business is growing fast. Year-over-year (YoY) IoT revenue growth came in at 45 percent in 2014, with 4G-LTE activations ballooning 135 percent, the company said. Verizon manages over 15 million IoT-enabled connections across a wide range of industries. By economic sector, the largest users of these machine-to-machine (M2M) connections Verizon is managing and their 2014 growth rates are:
- Manufacturing: 204 percent;
- Finance and Insurance: 128 percent;
- Media and Entertainment: 120 percent;
- Home Monitoring: 89 percent;
- Retail and Hospitality: 88 percent;
- Transportation and Distribution: 83 percent;
- Energy and Utilities: 49 percent;
- Public Sector/Smart Cities: 46 percent;
- Healthcare and Pharmaceutical: 40 percent.
All that said, Verizon found that enterprise IoT adoption is low overall. Just ten percent of enterprises have deployed IoT technologies to any great extent. While enterprises are now familiar with key enabling IoT technologies – sensors, cloud computing and intelligent networking – they are for the most part still at the stage of formulating viable strategies and use cases. Doing so “can be highly complex,” Verizon points out. Additionally, much more needs to be accomplished regarding establishing industry standards, Bartolomeo said.
“As machine-to-machine technology adoption continues to move downstream with millions of endpoints connected, it will change how we see cybersecurity and privacy,” Bartolomeo says. “Our role is to help key decision makers tackle complexities like security head-on by encouraging a more proactive posture in order to create value for their organizations while reducing potential risk.”