The commercial potential of the Internet of Things (IoT) is impossible to accurately quantify. It has broad implications for any industry with merely the slightest reliance on technology.
The US enterprise market is perhaps one of the more advanced markets for IoT – both in terms of future strategy and actual deployments. IoT applications are set to be fully mainstream within US enterprises by 2019 as they look to integrate new capabilities within their existing systems for maximum return or cost savings. This presents an extremely lucrative window of opportunity for systems integrators (SIs) to work most closely with these enterprises.
A two year horizon
Commissioned by InterDigital, The Telecommunications Industry Association (TIA) and Machina Research recently undertook a study that looked at IoT progress across the US enterprise space. It revealed that the vast majority of organisations are looking to integrate IoT with their legacy systems in the next two years. Most US enterprises are looking for additional efficiencies that IoT applications will bring to existing ‘tried and tested’ processes, says Jim Nolan, EVP, IoT Solutions at InterDigital.
When you think of the significant number of these processes that could be positively impacted, the overall gains for enterprises will be substantial. So it comes as no surprise that almost half of all US enterprises that participated in the TIA study reported that by 2020, almost half their IT budgets will be allocated to the advancement of IoT across their operations.
Systems integrators: at the front of the queue
So why are SIs, and not the more recognised end-to-end standardised IoT systems providers, or specialised IoT service providers, standing in the front of the queue as the checks are being handed out? Why aren’t software platform providers, IoT platform providers or even mobile operators more recognised by US enterprises as the ‘go to’ IoT solution?
The sheer number of potential providers helps provide the answer. The current IoT landscape remains extremely fragmented. There are too many pieces in the jigsaw for most enterprises to easily navigate, assess and deploy. Most therefore turn to their trusted systems integrators who understand their legacy systems, IoT landscape and how to build end-to-end IoT solutions.
According to the TIA and Machina study, 28% of US enterprises rank systems integrators as their top trusted choice as an IoT partner. Furthermore, 59% of these enterprises also admitted that system integrators are playing the leading role in helping to roll-out IoT. They also provide assurance over some of the most cited IoT complexities that include integration with legacy systems, security aspects, service level assurance, and implementation costs.
With great power comes great responsibility
These statistics are indicative of most US enterprises. If you consider the cost savings or revenue potential provided by so many new potential IoT applications from so many organisations, you begin to realise what a huge responsibility these SIs have. Finding a trusted partner for any project can be a daunting task. Yet companies like IBM, Harman, HP, Tech Mahindra, Wipro, Accenture, and other system integrators are clearly proving their value by reducing complexity.
The complexity will dissipate as consolidation within the IoT ecosystem will surely have an impact. According to the TIA study, there are currently more than 200 IoT platform providers – this is simply unsustainable. In order to succeed many of these vendors will need to emulate SIs – develop the necessary capabilities, assets, partners, and ecosystems to see their piece(s) of a complete IoT solution get deployed in a comprehensive end-to-end approach that removes as much complexity from the process as possible.
SIs and enterprises know the IoT is built on standardisation
Enterprises have been passionate in their calls for IoT standardisation for many years. Many are now reaping the benefits as they look to deploy vast systems globally. However, a key outcome of intense periods of technology innovation can lead to the development of competing technologies, protocols and even standards.
With the complexity of available IoT-capable technology choices, SIs and the enterprises they represent, face the daunting challenge of determining which solutions will not only achieve their business objectives, but also allow for the integration of legacy systems and a path to future interoperability.
The proliferation of standards at various levels of the IoT service delivery chain presents a unique challenge to companies looking to connect and improve their products and services. Enterprises must stick to mainstream standards or their SIs will face an insurmountable challenge in keeping ahead or up to speed with the latest innovations.
The vast majority of enterprises consider standards to not only be important to their company’s and industries, but also as a key approach to futureproofing their products, systems and operations while also ensuring smoother IoT implementations.
It’s interesting to note that the majority of early IoT adopters within the enterprise come from industries where standards have been very well established and where there are fewer legacy systems to integrate. The role of standardisation is clear: It is critical to driving growth and confidence in the IoT and will ensure enterprises and SIs can collaborate effectively to keep faith with the IoT dream.
The author of this blog is Jim Nolan, EVP, IoT Solutions at InterDigital
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