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Enterprise IoT Spending to Jump, But Security, ROI Remain Concerns

Internet-of-Things

Edward GatelyNine in 10 (90 percent) of enterprises will increase Internet of Things (IoT) spending over the next 12 months and four in 10 (40 percent) will raise IoT-related investment by 25-50 percent compared to 2016.

That’s according to 451 Research’s latest “Voice of the Enterprise: Internet of Things (IoT) Organizational Dynamics” survey of nearly 1,000 enterprise IT buyers globally. It reveals that 71 percent of enterprises are gathering data for IoT initiatives today, three percentage points higher than the previous quarter’s survey.

451 Research's Ian HughesEnterprises expect to increase their IoT investment by 33 percent over the next year.

Security remains a concern, with one-half of respondents citing it as the top impediment to IoT deployments, followed closely by 41 percent who cite IoT’s lack of perceived return on investment (ROI) and benefits.

Nonetheless, organizations are forging ahead with IoT initiatives and opening their wallets to support IoT deployments.

Ian Hughes, IoT analyst with 451 Research, tells Channel Partners the overall message to the channel is, “IoT usage is growing, in particular ongoing gradual implementations, as richer data sources come on stream and are incorporated into analytics, typically in brownfield environments such as industrial use.”{ad}

“Identifying those existing systems that can be improved through gradual IoT implementation can help mitigate the risks and costs of a full-blown greenfield IoT development in a rapidly evolving marketplace,” he said. “We see this with smart-city rollouts starting with the simple use case of cost savings in street-lighting replacement, which opens up an infrastructure for other, more speculative, or less tightly defined IoT projects to be built upon. With 41 percent of respondents identifying ROI as a concern, it is this sort of direction that they will need to look to.”

IoT deployments and usage will be particularly strong in enterprise initiatives around data and transactional-intensive workload categories, such as data analytics and security, according to the survey. IoT-specific projects can include: data collection and analysis of financial, health care or industrial functions; the uptime/reliability of mission-critical line of business servers and applications; and monitoring the efficiency and costs related to a specific business operation or department such as a hospital emergency room.

Also, there is a distinct and significant portion of IoT transitions occurring organically as enterprises’ IT systems, networks and infrastructures are “naturally becoming IoT-enabled by intelligent sensors and …

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… predictive analytics capabilities embedded in IT equipment, such as semiconductors, motherboards, devices (e.g., cameras and HVAC systems), servers, applications, smartphones, switches and routers,” 451 said.

Data analytics is playing an increasingly crucial role, with more than two-thirds (69 percent) of respondents using IoT endpoints for security and compliance, and risk reduction.

“These are insurance policies for the enterprise, as opposed to everyday OpEx improvement,” Hughes said. {ad}

Enterprises are split regarding a present IoT skills shortage, according to the survey. More than half (54 percent) of respondents said a lack of trained IoT staff is not an issue for their organization, versus 46 percent who said they are having difficulty filling IoT-related positions. The latter group identified IoT security and data analytics as the areas with the greatest lack of expertise.

Some 68 percent of corporations currently take advantage of IoT data to optimize operations, such as performing preventative maintenance, reducing downtime in factory equipment and fleet management. In addition, 42 percent of enterprises use IoT data to develop new products or enhance existing products and services.


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