I Read and Summarized the 3rd Edition of IoT Signals So You Don’t Have to

A report built based on survey data taken by the company named, ‘hypothesis’. This is a combined effort between Microsoft and Hypothesis to capture the most current state of IoT from the view of business leaders in certain sectors; manufacturing, energy, mobility, and smart places.

The survey was multi-national and the report includes data captured from in-depth interviews.

Things to know about IoT in 2021

The following are high-level conclusions drawn from the interviews and survey data:

  • IoT continues to drive organizations toward a more productive future
  • COVID-19 has accelerated IoT strategies and fueled business growth
  • AI, Edge Computing, and Digital Twins are essential to advance IoT strategies
  • Although IoT projects are maturing, technological complexity persists
  • Organizations are keeping a close eye on data security

Who they talked to

  • Business decision makers, developers, and IT decision makers who work at enterprise-size companies with greater than 1k employees
    • 71% were familiar with IoT
    • 95% of those familiar, have influence and decision making power on IoT strategies
      • 10% of those familiar were not in adoption of IoT
      • 90% of those familiar were in adoption of IoT

Overall Research Learnings

Big Picture

This year, IoT continues to be widely adopted. 90% of organizations surveyed are IoT adopters. IoT projects can be categorized into four stages:

  • Learn
  • Trial / Proof of Concept
  • Purchase
  • Use

Of the 90%, at least 82% have a project that reached the “use” stage.

The state of most projects overall:

  • 29% in Learn
  • 25% in Trial / POC
  • 22% in Purchase
  • 25% in Use

IoT adoption and value globally (Australia, Italy, and the US lead as primary adopters)

  • 90% of the surveyed leaders in countries fitting criteria are adopters
  • 25% have projects in use
  • Average time to reach “use” is 12 months
  • 66% plan to use IoT more in the next 2 years

IoT Adoption and Value by Industry

  • Manufacturing
    • 91% of the surveyed leaders in countries fitting criteria are adopters
    • 26% have projects in use
    • Average time to reach “use” is 13 months
    • 68% plan to use IoT more in the next 2 years
  • Energy
    • 85% of the surveyed leaders in countries fitting criteria are adopters
    • 22% have projects in use
    • Average time to reach “use” is 15 months
    • 61% plan to use IoT more in the next 2 years
  • Mobility
    • 91% of the surveyed leaders in countries fitting criteria are adopters
    • 23% have projects in use
    • Average time to reach “use” is 14 months
    • 61% plan to use IoT more in the next 2 years
  • Smart Places
    • 94% of the surveyed leaders in countries fitting criteria are adopters
    • 24% have projects in use
    • Average time to reach “use” is 13 months
    • 69% plan to use IoT more in the next 2 years

Why Adopt IoT

Overall Top 5 reasons:

  • Quality Assurance : 43%
  • Cloud Security: 42%
  • Device and Asset Security: 40%
  • Operations Optimization: 40%
  • Employee Productivity: 35%

The report includes evidence that those companies who employ IoT to improve products and service see a higher increase in overall ROI.

Manufacturing Top 5:

  • Quality and compliance
  • Industrial automation
  • Production flow monitoring
  • Production planning and scheduling
  • Supply chain and logistics

Energy (Power and Utilities) Top 5:

  • Smart grid automation
  • Grid asset maintenance
  • Remote infrastructure maintenance
  • Smart metering
  • Workplace safety

Energy (Oil and Gas)

  • Workplace safety
  • Employee safety
  • Remote infrastructure maintenance
  • Emissions monitoring and reduction
  • Asset and predictive maintenance

Mobility

  • Inventory tracking and warehousing
  • Manufacturing operation efficiency
  • Surveillance and safety
  • Remote commands
  • Fleet management

Smart places

  • Productivity enablement and workplace analysis
  • Building safety
  • Predictive maintenance
  • Regulations and compliance management
  • Space management and optimization

Benefits of IoT

Top 5 benefits organizations are reaping from IoT

  • Increases in efficiency of operations
  • Improved safety conditions
  • Allows employees to be more productive
  • Allows for better optimization of tools and equipment
  • Reduces chance for human error

Common measures of success in IoT

  • Quality
  • Security
  • Production Efficiency
  • Reliability
  • Cost efficiency

Less common measures of success

  • More informed decision making
  • Direct impact on increased revenue
  • Sustainability
  • % of project deployed using IoT

Challenges of IoT

Top 5

  • Still implementing our current solution
  • Security risk isn’t worth it
  • Want to work out existing and future challenges before adding or using IoT more
  • Too complex to implement because of technology demands
  • Too complex to implement because of business transformation needed

Top 5 reasons POCs fail

  • High cost of scaling
  • Lack of necessary technology
  • Pilots demonstrate unclear business value or ROI
  • Too many platforms to test
  • Pilot takes too long to deploy

Top 5 security concerns

  • Ensuring data privacy
  • Ensuring network-level security
  • Security endpoints for each IoT device
  • Tracking and managing each IoT device
  • Making sure all existing software is updated

The report includes a section on best practices, and notes that despite security being a big concern, very few are implementing these best practices:

Top 5 best practices

  • Assume breaches at every level of IoT project
  • Analyze dataflows for anomalies and breaches
  • Define trust boundaries between components
  • Implement least privileged access
  • Monitoring 3rd party dependencies for common vulnerabilities

IoT Implementation Strategy

Most of the companies surveyed prefer to work with outsourced resources to implement their IoT strategy. They do prefer bespoke solutions.

Those who outsource see these positive benefits:

  • Increases efficiency of operations
  • Improves safety conditions
  • Reduces changes for human error

Those who do not outsource tend to hit these challenges:

  • Too complex to implement because of business transformation needed
  • Too long to implement
  • No buy-in from senior leadership

Sustainability

Companies with more near-term zero carbon footprint goals are more motivated to implement IoT to help than those who have a longer range target.

Impact of COVID-19

When asked if C-19 was an influence in investing:

  • 44% more investment
  • 41% stay the same
  • 7% less
  • 4% too early to tell

Emerging Technologies

Those who are adopting IoT are more likely to adopt other innovative technology associated with IoT:

  • Digital Twins
  • Edge Computing
  • AI at the Edge

This is collectively known as AI Edge

AI Implementation

84% Have a strategy:

  • 31% are implementing
  • 26% developed, but not implemented
  • 26% developing

16% do not have a strategy

  • 11% want to develop
  • 5% have no plans

79% of respondents claim that AI is a core or secondary component of their overall IoT strategy

Top 5 reasons for AI in IoT Adoption:

  • Predictive maintenance
  • Prescriptive maintenance
  • User experience
  • Visual image recognition and interpretation
  • Natural language recognition and processing

Top 5 Barriers to using AI within IoT

  • Too complex to scale
  • Lack of infrastructure
  • Lack of technical knowledge
  • Implementing AI would be too complex
  • Lack of trained personnel

AI Adoption and Value by Industry

Total:

  • 84% – have an AI strategy
  • 31% – Implementing
  • 26% – developed
  • 26% – developing
  • 79% – use AI in IoT solution

Manufacturing:

  • 84% – have an AI strategy
  • 31% – Implementing
  • 23% – developed
  • 30% – developing
  • 83% – use AI in IoT solution

Energy

  • 90% – have an AI strategy
  • 26% – Implementing
  • 28% – developed
  • 36% – developing
  • 89% – use AI in IoT solution

Mobility

  • 81% – have an AI strategy
  • 36% – Implementing
  • 25% – developed
  • 20% – developing
  • 85% – use AI in IoT solution

Smart Places

  • 88% – have an AI strategy
  • 39% – Implementing
  • 28% – developed
  • 21% – developing
  • 75% – use AI in IoT solution

Edge Computing

Edge Computing Implementation Progress

79% have a strategy:

  • 29% implementing
  • 26% developed but not implemented
  • 24% developing

21% do not have a strategy:

  • 15% want to develop
  • 6% have not plans

81% Edge Computing as a core or secondary component:

  • 42% Core
  • 39% Secondary
  • 18% Considering, not yet adopted
  • 1% not considering

Top 5 Reasons to adopt Edge Computing

  • Cloud security
  • Device and asset security
  • Quality assurance
  • Securing the physical environment
  • Operations Optimization

Top 5 barriers to adoption

  • Lack of architectural guidance
  • Lack of trained personnel
  • Lack of infrastructure
  • Difficulty managing security
  • Lack of clarity on edge hardware choices

Edge Computing Adoption and Value by Industry

Total:

  • 79% – Have Edge Computing strategy
  • 29% – implementing
  • 26% – developed
  • 24% – developing
  • 81% – Use Edge Computing in IoT Solutions

Manufacturing:

  • 83% – Have Edge Computing strategy
  • 37% – implementing
  • 28% – developed
  • 18% – developing
  • 77% – Use Edge Computing in IoT Solutions

Energy:

  • 85% – Have Edge Computing strategy
  • 38% – implementing
  • 25% – developed
  • 23% – developing
  • 85% – Use Edge Computing in IoT Solutions

Mobility:

  • 85% – Have Edge Computing strategy
  • 18% – implementing
  • 30% – developed
  • 37% – developing
  • 88% – Use Edge Computing in IoT Solutions

Smart Places:

  • 85% – Have Edge Computing strategy
  • 29% – implementing
  • 26% – developed
  • 30% – developing
  • 83% – Use Edge Computing in IoT Solutions

Digital Twins

77% have a strategy:

  • 24% implementing
  • 29% developed, but not implemented
  • 24% developing

23% do not have a strategy:

  • 14% want to develop
  • 9% have no plans

81% Use and Impact of DT on IoT Solutions

  • 41% feature as core component
  • 40% feature as secondary component
  • 18% considering, but not yet adopted
  • 1% not considering

Top 5 benefits of using DT within IoT:

  • Improve overall quality
  • Increase revenue
  • Reduce operations costs
  • Enhance warranty cost and services
  • Reduce time to market for a new product

Top 5 barriers:

  • Challenges managing the value of data collected
  • Complexity of systems needed to handle digital twins
  • Integration challenges
  • Lack of trained personnel
  • Challenges modeling the environment

Digital Twins Adoption and Value by Industry

Total:

  • 77% – have a DT strategy
  • 24% – implementing
  • 29% – developed
  • 24% – developing
  • 81% – use DT in IoT solution

Manufacturing:

  • 79% – have a DT strategy
  • 31% – implementing
  • 25% – developed
  • 23% – developing
  • 86% – use DT in IoT solution

Energy:

  • 79% – have a DT strategy
  • 26% – implementing
  • 29% – developed
  • 24% – developing
  • 82% – use DT in IoT solution

Mobility:

  • 76% – have a DT strategy
  • 15% – implementing
  • 39% – developed
  • 23% – developing
  • 77% – use DT in IoT solution

Smart Places

  • 82% – have a DT strategy
  • 27% – implementing
  • 35% – developed
  • 22% – developing
  • 85% – use DT in IoT solution

By Industry

Smart Places

94% IoT Adopters

  • 27% – learn
  • 25% – POC
  • 25% – Purchase
  • 24% – Use

Top Benefits:

  • Increase the efficiency of operations
  • Improves safety conditions
  • Allows for better optimization of tools and equipment

Top 5 reasons for adoption:

  • Productivity enablement
  • Building safety
  • Predictive maintenance
  • Space management and optimization
  • Regulation and compliance management

Top 5 challenges

  • Still implementing current solution
  • Security risk isn’t worth it
  • Too complex to implement because of the need for business transformation
  • Want to work out exiting and future challenges before adding or using
  • Too complex to implement because of technology demands

Manufacturing

91% IoT Adopters

  • 27% – Learn
  • 26% – POC
  • 21% – Purchase
  • 26% – Use

Top Benefits

  • Increases the efficiency of operations
  • Increases production capacity
  • Reduces chance for human error

Top 5 Reasons for Adoption:

  • Quality and compliance
  • Industrial automation
  • Production flow monitoring
  • Production planning and scheduling
  • Supply chain and logistics

Top 5 Challenges to using IoT more

  • Still implementing current solution
  • Too complex to implement because of technology demands
  • Security risk isn’t worth it
  • Want to work out challenges before adding or using IoT more
  • Don’t have human resources to implement or manage

Mobility

91% IoT Adopters:

  • 30% – Learn
  • 26% – POC
  • 21% – Purchase
  • 23% – Use

Top benefits of IoT:

  • Increase efficiency of operations
  • Allows employees to be more productive
  • Improves safety conditions and increases production capacity

Top 5 Reasons for Adoption

  • Inventory tracking and warehousing
  • Manufacturing operations efficiency
  • Surveillance and safety
  • Remote commands
  • Fleet management

Top 5 challenges to using IoT More:

  • Want to work out challenges before adding or using IoT more
  • Too complex to implement because of technology demands
  • Still implementing our current solutions
  • Security risk isn’t worth it
  • Too complex to implement because of business transformation needed

Energy

80% IoT Adopters (Power and Utilities)

  • 28% – Learn
  • 26% – POC
  • 23% – Purchase
  • 23% – Use

Top Benefits

  • Increase the efficiency of operations
  • Increases production capacity
  • Allows employees to be more productive

Top 5 reasons for adoption:

  • Smart grid automation
  • Grid asset maintenance
  • Remote infrastructure maintenance
  • Smart metering
  • Workplace safety

Top Challenges:

  • Too complex because of technology demands
  • Security risk isn’t worth it
  • don’t have human resources to implement and manage

94% IoT Adopters (Oil & Gas)

  • 28% – Learn
  • 27% – POC
  • 24% – Purchase
  • 20% – Use

Top Benefits

  • Increase customer satisfaction
  • Improves business decision-making
  • Increases production capacity and the efficiency of operations

Top 5 reasons for adoption:

  • Workplace safety
  • Employee satisfaction
  • Remote infrastructure maintenance
  • Emissions monitoring and reduciton
  • Asset and predictive maintenance

Top challenges:

  • Lack of technical knowledge
  • Don’t know enough
  • Too complex to implement because of business transformation needed

Final Thoughts

Things worth noting:

  • IoT is not going away, in fact more money, time, and investment goes into it each year
  • Most organizations are looking to add AI, Edge Computing, and Digital Twins to their solutions
  • May organizations are outsourcing their IoT work and seeing more benefits because of this
  • Top challenges are around knowledge, skill, security, and implementation at scale

The original report

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