IoT to make up almost half of IT budgets by 2020, says TIA survey

A white paper for the Telecommunications Industry Association (TIA) from Machina Research emphatically reveals the coming importance of enterprise IoT and the central role systems integrators are playing in the commercial development and deployment of IoT services.

A survey of 200 businesses revealed the vast majority will be using IoT services within two years and that nearly two thirds of companies are currently working with systems integrators to progress internal IoT projects.

“Overwhelmingly businesses have woken up to the transformational benefits of IoT and are rushing to deploy those services, but at the same time appreciate there may be a rocky road ahead turning a good idea into a technically feasible and profitable one,” said Jim Nolan, executive vice president, IoT Solutions, at InterDigital. “This is where companies like IBM, HP, Tech Mahindra, Wipro, Accenture and other system integrators are worth their weight in gold, making the link between specialised IoT providers and the applications that companies need to leverage connectivity.”

Jim Nolan, executive vice president, IoT Solutions, at InterDigital
Jim Nolan, executive vice president, IoT Solutions, at InterDigital

The research report, co-sponsored by InterDigital and Telit, shows that overall demand for IoT applications and services remains extremely high, with the vast majority of decision makers (91%) expected to be using some form of commercial IoT service within the next two years. Indeed, almost half (48%) are benefitting from them today.

As partners, they’re turning to those they trust ahead of those most specialised, with systems integrators (28%) and business software partners like Salesforce.com and Oracle (16%) leading the responses. Even among IoT companies, the focus was on end-to-end solution providers, whether standards-based (16%) or proprietary (15%), versus technology suppliers. Interestingly, mobile operators were not a partner of choice, with only 8% of respondents seeing them as primary providers.

In terms of driving adoption, cost savings held the edge over expanding business, with monitoring for maintenance (25%) and reducing operational expenses (25%) comprising half of respondents’ top strategic reasons for deployment, versus just over one third of respondents who favored expanding revenue opportunities (18%) or better competing with rival products and services (18%).

With such vast scale building around commercial IoT deployments, decision makers singled out the importance of agreeing a set of IoT standards to futureproof new services. Such an open commitment to standardisation will ease the task facing systems integrators in developing and building adaptable and interoperable IoT applications.

Of the businesses participating in the research, 66% highlighted standards as being either crucial or significantly important in the adoption of the IoT services over the next couple of years. As part of the solution for solving the complexity of incorporating IoT, 76% of companies are either exclusively or primarily focusing on integrating legacy business systems with IoT solutions to get them fit for purpose.

Other key findings of the report included:

  • On average, 44% of IT budgets will by 2020, be solely used for the purpose of IoT project development and maintenance
  • 76% of enterprises indicate they have short-term (i.e. within next two years) goals for the integration of new IoT solutions with legacy systems
  • 98% of decision makers consider product monitoring useful to their businesses, with 78% indicating the ability to receive real-time data from their products would be extremely beneficial
Andy Castonguay, principal analyst, Machina Research
Andy Castonguay, principal analyst, Machina Research

“The importance of marrying IoT with the existing legacy systems cannot be downplayed. Along with having a set of standards in place, businesses will be leaning heavily on system integrators to weave the future with the present,” said Andy Castonguay, principal analyst, Machina Research and lead author for this report. “Our research shows businesses are prepared to set aside nearly half of their IT budgets by 2020 to get this right, demonstrating just how much of an opportunity IoT represents.”

InterDigital develops wireless technologies for mobile devices, networks, and services. It is a key contributor to global wireless standards, designing and developing a wide range of innovations that are used in digital cellular and wireless products and networks, including IoT, 2G, 3G, 4G and IEEE 802-related products and networks.

The full TIA White Paper, entitled ‘Internet of Things Enterprise Survey’, is available to download on www.interdigital.com 

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