Internet of Things Gains Momentum Among Businesses, New Verizon Report Reveals
A new report from Verizon Enterprise Solutions, “State of the Market: The Internet of Things (IoT) 2015: Discover How IoT is Transforming Business Results,” released today, shows that enterprise adoption of the Internet of Things is starting to gain momentum.
The report details key factors driving the increase in IoT deployments and includes guidance for business and public sector leaders on developing an IoT strategy.
According to Verizon’s report, the Internet of Things is being fueled by technological, political and social factors that are driving more organizations to adopt IoT-enabled solutions. For example, the use of social media and mobile technology has transformed consumer and citizen expectations. Also, the declining costs of sensors, connectivity and processing power have made IoT a more viable proposition to a broader set of organizations. Changing regulatory requirements across a number of industries are also making an impact.
“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. New use cases are created every day; however, the business case for IoT and enterprise adoption often gets overlooked,” says Mark Bartolomeo, vice president IoT Connected Solutions at Verizon.
“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 report notes that “off-the-shelf” IoT solutions are starting to materialize with greater frequency as a replacement for highly customized solutions, which have historically characterized many enterprise IoT implementations. And a broader IoT landscape brings greater security challenges. Verizon notes that digital certificates can help address growing C-suite and public concerns and meet regulatory demands around IoT and security.
Enterprise IoT Growth Forecast
New research commissioned by Verizon from ABI Research forecasts massive growth broadly, with the number of business-to-business IoT connections — more than quadrupling between 2014 and 2020 — rising to an estimated 5.4 billion connections globally.
In the automotive industry, Verizon’s telematics experts note that 14 car manufacturers account for 80 percent of the worldwide automotive market, and all of them have a connected car strategy.
Additionally, ABI Research cites that organizations will introduce more than 13 million health and fitness tracking devices into the workplace by 2018.
Verizon experts predict that by 2025 smart cities capabilities 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 Growth Supports Current Trends
Verizon saw a 45 percent year-over-year revenue growth in its IoT business in 2014, with 4GLTE activations growing by 135 percent. Today, Verizon manages more than 15 million IoT-enabled connections for a wide range of industries.
According to the report, machine-to-machine connections managed by Verizon resulted in growth in 2014 in the following sectors:
- 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
Barriers to Growth
Recent growth in M2M connections and a global spotlight on IoT-enabled solutions notwithstanding, Verizon’s experts believe that widespread enterprise adoption is currently low. Verizon experts estimate that just 10 percent of enterprises have deployed IoT technologies extensively — suggesting that many organizations are in a pilot phase or are waiting for more insights from early adopters. This also applies to widely covered categories such as the connected car. According to Verizon’s telematics experts, more than 600 million vehicles worldwide are currently not connected to a network.
Bartolomeo points out that while the core technologies powering the Internet of Things — sensors, cloud computing, intelligent networking — are familiar to most businesses and public sector organizations, formulating a viable strategy and developing IoT solutions can be highly complex. Additionally, Bartolomeo says that there’s still a lot more work to be done in regard to the creation and ratification of industry standards.
“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.”