Why do enterprises think IoT is a key to transformation, but at the same time seem to be vague on the “Why?” Enterprises have been singing IoT transformation praises for over a year, and the same point has emerged in other analyst reports and surveys, but there’s rarely been a lot of detail offered in just what IoT was going to do. I’ve been trying to model IoT’s future, but having problems getting useful data on future plans. So, keeping up my recent effort to track the viewpoints of key technology planners, I dug deeper into enterprise IoT, and found some interesting stuff.
One thing that struck me pretty quickly was a point of commonality between enterprise planner-think and the way that network operator planners conveyed their own views. Neither of them took a top-down, architectural, approach. Neither expected to drive transformation by adopting some key technology. Instead, they both thought of hosting, of mechanization, and assumed that the mission for IoT would come along on its own. They saw their own role less as an evangelist for IoT missions than as a mechanizer of whatever missions emerged.
Almost 90% of enterprises say they use IoT technology, and 100% say they plan to use it or expand their current use. These numbers are a bit less impressive if you consider that enterprise planners view anything that uses remote sensor/controller technology as IoT (not surprising given that media coverage does the same). Still, 100% is impressive. Does this mean that a huge enterprise base thinks IoT is indeed critical to transformation, and has specific plans to adopt or expand that application? No to both.
One interesting data point in the enterprise transformation space is that enterprise planners are divided with respect to what “transformation” is. About a quarter of them say it’s a “revolutionary shift in how their company does business”, which doesn’t necessarily imply that it’s rooted even in IT, much less IoT. Another quarter says it’s “better use of information to guide decisions”, which at least implicates IT. A third quarter says that it’s “changes in business practices/processes to optimize productivity”, which is again fairly non-specific, and the final quarter say that transformation is “a shift in IT to significantly reduce costs and improve benefits”. The point here is that none of them specifically link transformation to IoT.
OK, obviously these planners are going to have to be asked more pointed questions to get useful responses. The obvious one is “What role do you see IoT playing in transformation?” This brought at least some more specific answers, but not necessarily satisfying ones. Forty percent of planners said that IoT would “improve manufacturing and the movement of goods”. Twenty-five percent thought IoT would “enhance the use of AI”, twelve percent said that it would “facilitate robotics”, another twelve thought it would “cut human effort expended in routine tasks”, and seven percent said it would “reduce carbon footprint and energy consumption”. The remaining three percent had no insight into the role.
We’re still not getting much to validate the notion that enterprises think IoT is transformational, or at least are convinced enough to have looked at specific options. Time to try “What if?” games. What if workers could be directed to a specific place, product, or part based on knowing what they were supposed to be doing? Every planner thought that would be helpful. What if people walking by a product could be alerted to its price, based on the same principles as are used to target advertising? They all liked that too. Improve manufacturing by coordinating delivery of all the needed parts to the right place in the factory, at the right time, and at the same time ensuring that the deliveries didn’t create congestion? Loved it. In fact, every specific application I cited got almost universal backing from planners, the same people who didn’t mention any of them spontaneously.
The likely reason for planners’ inability to come up with specific transformative IoT examples is that they’ve not thought about it much. How do you square that with almost-universal IoT adoption? The answer is that enterprise planners think of technology products or elements in a specific-mission context, but think of technology concepts in very general terms. Digging into current enterprise IoT, what I found was that enterprises tended to get IoT as part of a broader technology suite. Almost 80% of enterprise planners said that their IoT deployments were project-based rather than technology-driven. Even among the 20% who said they’d acquired IoT elements directly, three-quarters were augmenting prior project-based deployments. They changed manufacturing, or warehousing, or patient care, and the changes included some IoT.
Enterprises, then, are indirect consumers of IoT. They combined mission and overall facilitating technology into a single deal. What this would mean is that to promote transformation via IoT to enterprises, you’d have to create a packaged solution to a recognized problem or opportunity. You’d not just present sensors, controllers, and other IoT elements and expect the enterprise to deploy them in combination with other elements they somehow knew about, to do some unspecified but important task.
There are specific facts to back this assessment. In three specific verticals (manufacturing, healthcare, and warehousing), planners told me that their current IoT commitments were created through packaged solutions. They didn’t install IoT to track drugs or move goods, they installed tracking and movement technology and IoT rode along. Many of the planners didn’t even know the details of their IoT systems because they were part of something bigger.
The one area where planners saw what might be a generic IoT requirement they could address explicitly was networking. Obviously, IoT devices need to be connected, and whether it’s wireless or wired, the facilities are likely to be provided independent of the applications or “packages” that provide IoT devices and other technology elements. The use of WiFi 6 for IoT was the network interest of three-quarters of planners, where 5G was in view for only a bit over 20%. Most planners expected to use technology already in place, however.
Clearly, all this has significant implications on IoT adoption. First, as usual, a lot of what we hear about IoT is really vendor-driven, and even what users say they’re doing is really very high-level consideration or simple curiosity rather than actual project planning. Vendors tell me that hype waves like the one we’ve seen in IoT and the one in 5G are ways for them to drive customer engagement. They can get an appointment talking about something that’s hot, and they are unlikely to get it trying to push the same story they tried the last time.
The second meaning compounds the first, too. Project-driven IoT is less likely to be seen as “IoT” explicitly, and as I’ve already noted, IoT elements may be secondary to the mission to the point where they’re not particularly conspicuous. That’s made it difficult to even survey IoT reliably or discuss real-world IoT projects, which of course means that there are fewer thoughtful and legitimate stories. It’s why getting information for my modeling has been difficult.
For vendors who recognize that they actually need an effective IoT sales/marketing and product strategy, project-centric IoT means that channel sales through vertical-market integrators may be the most important channel between them and their prospects. Thus, a strong channel program is probably the biggest asset in all of IoT. Not just any channel program, though. What’s needed is a channel program that encourages serious integration skills, partnerships outside the IoT equipment space, software skills—in short, more than a typical partner would supply. The term “VAR” for value-added reseller, comes to mind, though the concept has been weakened over the years in terms of what the value-add might be.
There’s a lot of commonality between operator planners and enterprise planners, so I think. Both of them are focused on implementing something rather than deciding what to implement. They’re lower on the food chain than the critical top level where the business case is decided, which means that these planners aren’t really going to drive transformation, only implement a momentum that develops from somewhere and someone else. If we want transformation to happen, we need to figure out where and who that might be.
