By Nitin Dahad
A major new global study looking at the impact of IoT (Internet of Things) technologies across a wide range of industry sectors around the world, found that companies investing in IoT are reporting significant revenue increases as a result of IoT initiatives, with an average increase of 15.6 percent in 2014. Almost one in ten (9 percent) saw a rise of at least 30 percent in revenue.
Company executives see the IoT as a growing area for businesses, with 12 percent identifying a planned spend of $100 million in 2015 and 3 percent looking to invest a minimum of $1 billion among the 795 companies surveyed in the Tata Consultancy Services (TCS) report. The report also shows that companies predict their IoT budgets to continue increasing year-on-year, with spending expected to grow by 20 percent by 2018 to $103 million.
Companies at the very forefront of this drive for innovation through IoT have seen the biggest benefits from their investments. The top eight percent of respondents, based on ROI (return on investment) from IoT, report a 64 percent average revenue gain in 2014 as a direct result of these investments. Currently the biggest business impact is that companies can offer their customers more bespoke products and services, yet by 2020 this will convert from marketing functions to increased sales, through adding considerable value to the customer.
This is reflected in the finding that the most frequent use of IoT technologies by companies is tracking customers through mobile apps, used by almost half of all businesses (47 percent). More than half (50.8 percent) of IoT leaders admit to investing in IoT to track their products and how these were performing, whereas this is only the case with 16.1 percent of the respondents with the lowest ROI from IoT.
Other findings of the report are:
- Culture is the number one issue holding companies back: despite the encouraging data on IoT investment and its impact on revenue growth, the report revealed major challenges remain in realizing the promise of IoT for businesses across all sectors, particularly with corporate culture, leadership and the integration, security and reliability issues of the technology.
- Healthcare lags industrial manufacturing, which stands out for IoT success: the healthcare sector has the greatest potential to benefit from the IoT, but remains one of the most underdeveloped industries due to regulatory restrictions and data security concerns that currently hinder innovation. The sector plans to spend just 0.3 percent of revenue in 2015, but will be increasing this investment by at least 30 percent by 2018. The healthcare market driven by the IoT is predicted to be worth $117 billion by 2020.
Executives in the industrial manufacturing sector are reporting the largest increase in revenue from IoT, with an average 28.5 percent, followed by financial services (17.7 percent) and media & entertainment (17.4 percent). The automotive industry has the lowest revenue gain with just a 9.9 percent increase.
The report, which looks at trends across 13 key industries, found that large-scale investment in IoT infrastructure and monitoring is not confined to those in manufacturing, however, with the travel, transportation and hospitality sectors planning to spend 0.6 percent of revenue this year. Media and entertainment companies will spend 0.57 percent of their revenue on IoT in this year – significantly more than the 0.4 percent average and the 0.44 percent spend in banking and financial services.
The industrial IoT, enterprise IoT, and the role of ecosystems and platforms for an outcome based economy using IoT will be among the many topics of discussion at the forthcoming IoT Solutions World Congress (IOTSWC) in Barcelona, where The Next Silicon Valley is a media partner. The IOTSWC will also explore many areas including healthcare, transportation (such as the ‘connected flight’) and energy.
Taking place in Barcelona from the 16th to the 18th of September 2015, the event will focus on the crossroads between IoT and Industry and will feature 80 companies and institutions. The global headquarters of leading multinationals such as Accenture, Amazon, Bosch, Deloitte, Deutsce Telekom, General Electric, HP, Indra, Intel, IBM, National instruments and Microsoft have chosen the Barcelona based event for several world premieres.
The newly launched event has also established a partnership with the Industrial Internet Consortium, the sector’s leading association, who has advised Fira de Barcelona in the design of the conference program. IOTSWC will also include an exhibition area that will feature not only companies and their latest innovations but also three testbeds with real-life applications of these solutions. These demonstrations will showcase enhanced aircraft assembly, power microgrid connectivity and emergency communications. For more information and to register, visit the event web site – click here.