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