Proving the Business Case for the Internet of Things

IMC survey hints at IoT starting to scale

Keith Kreisher
August 13, 2019



The IoT industry is still suffering from a lack of scale, but two trends highlighted by the quarterly survey from the IoT M2M Council (IMC) suggest that an increase in the scale of IoT deployments may be in the offing. And in another development, the IMC data have established that there are IoT buyer personas that have very distinct characteristics.
 
IoT product and service providers have long complained about the lack of scale in the industry, and overall the data generated quarterly by the survey bear this out. Deployment size continues to stagnate.
 
Roughly 85% of all IoT deployments that were covered in the survey are under 10,000 devices, so lack of scale continues to be one of the most intractable problems facing the industry. These figures haven’t changed much in over three years that the IMC has been gathering these data.
 
The industry hasn’t reached the kind of scale that was expected during the hype phase of the IoT technology rollout. Many of the IMC adopter members filling out the survey are early-stage in the deployment process, which means that IoT buyers surveyed have not yet settled on technologies or vendors.
 

 
The latest data seem to at least suggest that this lack of scale could be changing. In a clear trend over the past year, the number of IoT adopters citing a “lack of business models” as their biggest hurdle has shrunk by more than half, from roughly 25% to 10% in the IMC survey. Likewise, concerns about IoT security are showing a steady rise among adopters. Security has consistently lagged funding, interoperability and a lack of business models as a concern in this IMC survey. It looks like a certain maturity and realism are taking hold among IoT buyers.
 

 
Deployment timelines also seem to be quickening. The number of deployments expected to take less than one year – from conception to implementation – has risen to over 50% for the first time since the IMC began gathering these data. This reverses a trend in the past year, so may be a statistical anomaly, but the number of deployments expected to take over 18 months has dropped by a third, from roughly 30% to 20%.
 

 
A summary of the IMC Quarterly IoT Buyers’ Index is on the IMC web site. The complete survey results, including results filtered according to industry roles such as enterprise users and OEMs, are available only to IMC sustaining companies. To inquire about joining the IMC board of governors as a Sustainer, go to https://www.iotm2mcouncil.org/memberbenefits.
 
The IMC has collected data on a quarterly basis tracking IoT buying patterns by surveying its 25,000 rank-and-file adopter members – all self-identified IoT buyers – since 2016. Quantitative data gathered since that time indicate that there are three distinct IoT buying personas:

  • Enterprise users – defined as business units that use connected devices for their day-to-day operations, such as tracking assets for supply-chain management. This persona is often a supply-chain manager within an enterprise who defines their role broadly as “operations”. A plurality of IMC rank-and-file members define themselves in this way, and that demographic profile holds true across 22 of the 24 vertical markets that the IMC tracks. Almost three quarters of IoT deployments enterprise users partake in are low-volume – under 1000 devices. This persona is more likely to begin their IoT procurement process by speaking with software platform providers and systems integrators than are other IoT buyers. They also cite a “lack of business models” as their biggest IoT hurdle more often than other buyers.
  • OEMs – defined as business units that embed connected devices within products that they in turn sell, such as car makers or medical device manufacturers. Buyers in this segment are as likely to define their corporate role as “product design and development” as operations. Almost a third of IoT deployments at OEMs involve more than 10,000 devices, making them the highest volume buying persona out there – they’re 50% more likely to be sourcing large-scale deployments than others. A plurality of all IoT buyers begin their journey by talking to SIs, but OEMs are almost as likely to make their first stop a device maker. They cite a “lack of interoperability” as one of their biggest hurdles in the IoT procurement process – more so than others.
  • Apps developers (systems integrators, ISVs) – defined as businesses that develop new, specific applications, possibly to be sold to or used among the other two groups. The developer function goes by different names – app developer, independent software vendor, application-specific systems integrator – and their role is somewhat more difficult to define. On scale-volume, they fall between enterprise users and OEMs – just over half of their deployments are under 1000 devices. They are likely to begin their buyer’s journey by talking to a device manufacturer. And they are almost twice as likely as other IoT buyers to cite “security and privacy concerns” as the biggest hurdle to IoT procurement.
The IMC has substantial hard data to back up these personas, and makes those data available to its sustaining member companies on a quarterly basis. These include complete breakdowns of buying timelines, size of deployment, connectivity types, vendor types and time to implementation – for the three buyer personas described above.