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IoT adoption held back by lack of business case, software and skills

The internet of things is at the top of Gartner’s Hype Cycle, but many organisations cannot build a business case to invest in IoT projects

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Despite industry hype and some big initiatives, the internet of things (IoT) does not feature on many organisations’ business plans.

An online survey of 465 IT and business professionals conducted last November among Gartner Research Circle members reported that 38% have no plans to implement IoT.

The survey also found that 9% of the professionals questioned see no relevance at all in IoT technologies.

Chet Geschickter, research director at Gartner, said: “Many organisations have yet to establish a clear picture of what benefits the IoT can deliver, or have not yet invested the time to develop ideas for how to apply IoT to their business.”

However, IoT is at the top of Gartner’s Hype Cycle, which tracks the rise, fall and eventual adoption of new technologies.

Jim Tully, vice-president and distinguished analyst at Gartner, said: “IoT is right at the top of the peak of the Hype Cycle. You get the impression that everyone is using IoT, but only 29% are actually using it. Three-quarters are not doing a single thing.”

The reason for the low adoption of, and interest in, IoT among many enterprises is they do not see the business justification and are concerned about the return on investment, said Tully.

One Computer Weekly reader posted a comment on a recent article, saying that among the most notable barriers to adoption is that there is poor alignment of incentives between IoT makers, who tend to focus on the top line, and those who want to deliver an IoT-based service, which is generally driven by cost.

Industries to adopt IoT

But there are some industries that Gartner belies will adopt IoT widely. Heavy industries such as utilities, oil and gas, and manufacturing are leading IoT adoption, while service-oriented light or “weightless” industries are lagging behind.

Gartner expects more than half of businesses in asset-intensive “heavy” industries to have implemented IoT by the end of 2016, and thinks about one-third (36%) of service-led businesses will also do so.

“We have had a lot of calls from insurance companies who are interested in connected smoke alarms and burglar alarms and systems built into cars,” said Tully. “In fact, pay-as-you-drive business car insurance and health insurance have been among the pioneering applications of IoT.”

Apart from the business justification, Gartner also regards security, availability of mature software and lack of skills as barriers to IoT adoption.

Read more about IoT

In January, Gartner’s Top 10 IoT Technologies for 2017 and 2018 report noted that some IoT applications will produce a vast amount data that needs to be analysed in real time. For instance, systems creating tens of thousands of events per second are common, and millions of events per second can occur in some telecom and telemetry situations, the report said.

“Traditional IT architectures that store and subsequently process data do not have the necessary performance to deliver real-time analysis of such data streams, and in any case, there may be too much data to store in its raw form,” the analyst firm warned.

Complex software

Organisations that are planning to process vast amounts of data need to consider event streams such as the new generation of distributed stream computing platforms (DSCPs). According to Gartner, these use parallel architectures to process very high-rate data streams to perform tasks such as real-time analytics and pattern €identification. Examples include Apache Storm, Apache Spark, Google Cloud Dataƒow and IBM InfoSphere Streams.

Generally, system architects have thrown more hardware at the problem of how to make enterprise systems cope with high throughput and real-time data processing. Chandru Mullaparthi, head of software architecture at Bet365, says enterprise software developers need to break free from procedural programming, which is how most application software is coded.

The betting site has used Erlang, a language originally developed by Ericsson for programming telco systems, to handle vast amounts of betting transactions concurrently. “The fundamental advantage of Erlang is that it allows you to build concurrent systems much more easily than traditional systems,” said Mullaparthi. “This is the age of multi-core computing, so you have to build software to scale out across multiple CPU cores.”

An analogy can be drawn between thousands of punters placing real-time bets on an online betting site and the potential for many millions, if not billions, of sensors feeding real world events into IoT systems – both are required to process data concurrently, said Mullaparthi. “You can’t avoid concurrency, “ he added.

Integration is another challenge that may hamper the progress of IoT. For example, as Tully notes, a city may deploy IoT-based systems sourced from several suppliers to control and monitor traffic lights, parking and public transport, as part of various smart city initiatives. “IoT has tended to be piecemeal within the enterprise and it is a challenge to integrate all this stuff,” he said.

Focus on customers

Gartner’s survey found that for organisations that have already implemented IoT, the focus has been on internal operational improvements over external customer-facing objectives.

To date, the primary business case for IoT is internally focused, namely improved efficiencies, cost savings and enhanced asset utilisation (52%) versus the externally facing IoT benefits of enhancing customer experience or increasing revenue (40%). But this is set to change.

“We are poised for a marked shift in focus towards customer-facing benefits for planned IoT implementations, positioning IoT as a key competitive marketplace weapon going forward,” said Tully.



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