Third of IoT projects fail at proof of concept, says Microsoft
August 8, 2019
Nearly a third of IoT project fail in the proof of concept stage yet 88% of adopters see the IoT as critical to business success, according to a report from Microsoft.
The tech giant surveyed more than 3000 IoT decision-makers in enterprise organisations to give the industry a holistic, market-level view of the IoT ecosystem, including adoption rates, related technology trends, challenges and benefits of the IoT.
The result is IoT Signals, a research report designed to provide a global overview of the IoT landscape. The report indicates that IoT adoption is growing rapidly, and respondents believe 30% of their company’s revenue two years from now will be due to the IoT.
Yet, the industry faces a significant IoT skills gap, as well as complexity and security challenges that may compromise business benefits to the IoT if not addressed.
“The IoT is transforming businesses in every industry and is powering breakthrough innovations,” said Sam George, head of Azure IoT. “Our research shows that unlocking the IoT’s full potential requires the industry to address key challenges like the skills shortage, security concerns and complexity. Microsoft is leading the way on simplifying and securing the IoT so that every business on the planet can benefit.”
Key findings in the report include:
- 85% of respondents are in IoT adoption, and three-quarters of these have IoT projects in planning.
- Among IoT adopters, 88% believe IoT is critical to business success.
- IoT adopters believe they will see a 30% RoI, inclusive of cost savings and efficiencies, two years from now.
- Nearly all IoT adopters – 97% – have security concerns when implementing the IoT, but this is not hindering adoption.
- 38% of IoT adopters cite complexity and technical challenges to using the IoT as a barrier to furthering their IoT adoption.
- Lack of talent and training present challenges for half of IoT adopters, and 47% say there are not enough available skilled workers.
- Respondents believe critical technology drivers for IoT success in the next two years are AI, edge computing and 5G.
- Nearly one-third of projects (30%) fail in the proof-of-concept stage, often because implementation is expensive or bottom-line benefits are unclear.
IDC expects there to be 41.6 billion connected IoT devices by 2025, growing at a rate of 8.9% over the forecast period.
“As the market continues to mature, IoT increasingly becomes the fabric enabling the exchange of information from things to people and processes,” said Carrie MacGillivray, group vice president at IDC. “Data become the common denominator, as they are captured, processed and used from the nearest and farthest edges of the network to create value for industries, governments and individuals’ lives.”
Across industries, global and enterprise users including Starbucks, Chevron, Bühler, Steelcase and ThyssenKrupp are transforming their business with IoT and intelligent edge products.
In partnership with BCG Group, Microsoft identified seven key ingredients for success in IoT – business strategy, leadership and organisation, a technology roadmap, talent, operations and core business processes, partnerships, and security.
To advance customer and partner success, Microsoft is investing $5bn in IoT and intelligent edge technologies and ecosystem by 2022. In just the past year, Microsoft has added over 100 features and services and released 70 IoT partner announcements, and has an ecosystem of over 10,000 IoT and intelligent edge partners to help its customers, no matter where they are on their IoT journey.