New Study Examines Mass Adoption of IoT Technology

The report, based on interviews with 3,100 IT and business decision makers, explores the reasons why (and, in some cases, why not) the Internet of Things is being adopted by a range of businesses and organizations.
Published: March 9, 2017

The average return on investment from the Internet of Things is 34 percent, with one in 10 interview respondents reporting returns greater than 60 percent, according to a new study published by Aruba, a Hewlett-Packard Enterprise company that specializes in next-generation networking solutions. Titled “The Internet of Things: Today and Tomorrow,” the report helps to quantify the adoption of IoT technology and is available at Aruba’s website. Its findings are based on interviews with 3,100 IT and business decision makers who work at organizations with at least 500 employees, in both the public and private sectors, throughout 20 different nations.

The goal of the interviews, which took place during November and December 2016, was to better understand the current state of the IoT, as well as its impact on industry. Aruba also commissioned Kevin Ashton to write an e-book titled Making Sense of IoT, that further examines the subject. In his e-book, Ashton defines the Internet of Things—a phrase that he originated—as “sensors connected to the Internet and behaving in an Internet-like way by making open, ad hoc connections, sharing data freely and allowing unexpected applications, so computers can understand the world around them and become humanity’s nervous system.”

Aruba’s study determined that 85 percent of businesses plan to implement the IoT by 2019, due primarily to an increased demand for efficiency and innovation. However, while 98 percent of business leaders have at least a rudimentary understanding of the IoT, many do not fully understand its exact definition or the extent to which it can affect business. Respondents also expressed concerns about implementation costs, maintenance and the integration of legacy technology, with 50 percent, 44 percent and 43 percent of respondents regarding them, respectively, as problems associated with the Internet of Things.

Furthermore, the study indicated that 84 percent of organizations reported having IoT-related security breaches, with the most commonly cited causes being malware, spyware and human error. More than half of the respondents listed the possibility of external attacks as a major factor against adopting IoT technology.

“While IoT grows in deployment, scale and complexity, proper security methodologies to protect the network and devices, and more importantly, the data and insights they extract, must also keep pace,” said Chris Kozup, Aruba’s VP of marketing, in a prepared statement. “If businesses do not take immediate steps to gain visibility and profile the IoT activities within their offices, they run the risk of exposure to potentially malicious activities.”

But even with these concerns in mind, Ashton pointed out, the benefits of the IoT still tend to exceed original expectations. For example, while only 16 percent of business leaders projected a large profit gain from their IoT investment, 32 percent ended up reporting profit increases. In addition, only 29 percent of executives anticipated that utilizing IoT technology would lead to improvements in business efficiency, but 46 percent ultimately reported efficiency gains.

Seventy-one percent of public sector adopters and 73 percent of health-care adopters stated that costs were down thanks to the IoT. Among the benefits reported were increases in business efficiency (cited by 82 percent), improved IT efficiency (81 percent), cost savings (73 percent), enhanced customer experience (78 percent), increased profitability (72 percent) and improved visibility of processes across the whole organization (77 percent).

Enterprises (with applications including air conditioning and lighting systems, as well as personal mobile devices) were found to have most readily adopted IoT technology, with 72 percent of them introducing IoT devices and sensors into their workplaces. The industrial sector came in second place, with 62 percent of respondents (with applications including chemical sensors, picking systems, and monitoring and maintaining operating infrastructures) adopting IoT technology. Health care was a close third at 60 percent, with patient monitors and X-ray or other imaging devices listed among the main devices connected to the network. The biggest IoT benefit for health care companies, according to the report, comes from using sensors to monitor and maintain medical devices.

Comparably speaking, retailers and governments lag behind at 49 percent and 42 percent, respectively. Thirty percent of retailers are using the IoT to create store location services that deliver personalized offers and product information to shoppers, while 18 percent are using the IoT to remotely control environmental factors, such as heating and lighting. For governments, the sluggishness to adopt IoT technology could stem from a lack of understanding, given the fact that the number of government IT decision makers who claim their executives have little to no knowledge of the Internet of Things is 35 percent—double the global average.

Nonetheless, among government respondents, 70 percent of those who did adopt IoT technologies reported improved organizational visibility and cost savings. The most popular application among these respondents is remote monitoring and control of devices within city boundaries, with 27 percent listing this as their number-one application.

Of the organizations that have adopted IoT technologies, 98 percent feel that they can analyze data, but virtually the same amount (97 percent) also believe that there are challenges to creating value from such data. Additionally, 39 percent of businesses are not extracting and analyzing data from within corporate networks, meaning that they miss out on potential insights that could improve business decisions. “The future promises far more amazing things,” Ashton wrote regarding IoT technology. “The most important decision you can make now is how to be a part of it.”