We’ve all heard about the Internet of Things (IoT) over the past few years and how it’s really going to shake things up. Even predictions by noted organisations seem to suggest so. IDC predicts that the worldwide installed base of IoT endpoints will grow from 14.9 billion at the end of 2016 to more than 82 billion in 2025.
Similarly, Gartner predicts that 25 billion “things” will be connected to the IoT by 2020. Even Cisco and McKinsey Global Institute predict that the IoT will generate more than $10 trillion in the coming decade—with Cisco predicting the market could be worth $14.4 trillion by 2025. While the smartphone market was the quickest business to hit the trillion-dollar-mark in history, the IoT space is, by definition, much larger in scope and is growing at an almost unthinkable clip — a report released earlier this year predicts that the IoT market will have a 43% CAGR through 2019.
However, despite the IoT being called the Fourth Industrial Revolution, there have been several concerns regarding the pace of this revolution, given the overwhelming majority of enterprise IoT project failures.
In a recent news report, Cisco’s Australian CTO Kevin Bloch has revealed that three quarters of all IoT projects are “failing”, primarily because they have been designed to solve individual problems, and have become siloed and unsupported as a result.
“The inaugural phase of IoT is characterised by numerous point solutions from a multitude of new -- often startup – vendors. Typically, these solutions have been designed to solve a particular societal problem such as lighting or parking. In each case, a complete IT stack needs to be built in support of the solution,” Bloch was quoted as saying by the news report. “"Eventually, customers find themselves with multiple siloes from multiple vendors that don’t interoperate, are not cybersecure, use different protocols, and generate more complexity at greater cost.”
The CTO added that IoT projects are also failing due to a lack of cybersecurity, qualified skills by those running them, project definition, governance, and support.
In fact, a study conducted by Cisco and released at the marquee industry event IoT World Forum in London in May this year also shows that 60 per cent of IoT initiatives stall at the Proof of Concept (PoC) stage and only 26 per cent of companies have had an IoT initiative that they considered a complete success. Even worse, a third of all completed projects were not considered a success.
“It’s not for lack of trying,” Rowan Trollope, senior vice-president and general manager, IoT and Applications, Cisco, was quoted as saying by media reports. “But there are plenty of things we can do to get more projects out of pilot and to complete success...” For the study, Cisco surveyed 1,845 IT and business decision-makers in the US, UK, and India across a range of industries — manufacturing, local government, retail/hospitality/sports, energy (utilities/oil & gas/mining), transportation, and health care. All respondents worked for organisations that are implementing and/or have completed IoT initiatives. All were involved in the overall strategy or direction of at least one of their organisation’s IoT initiatives. The goal was to gain insight into both the successes as well as the challenges that are impacting progress.
Among the other key findings, the survey noted that “human factor” matters. IoT may sound like it is all about technology, but human factors like culture, organisation, and leadership are critical. In fact, three of the four top factors behind successful IoT projects had to do with people and relationships.
Also, 60 per cent of the respondents stressed that IoT initiatives often look good on paper but prove much more difficult than anyone expected. Top five challenges across all stages of implementation: time to completion, limited internal expertise, quality of data, integration across teams, and budget overruns.