Enterprise Internet of Things: Trends Shaping the Market
Findings from Avasant’s Internet of Things Services RadarView™
Digital Singularity – the point where technological omnipresence and human experience converge, has embedded a realm of global interconnectedness, not just among people, but among connected devices, and between people and devices. A key technology prerequisite that is driving this wave of connectivity and fuelling Industry 4.0 is the Internet of Things (IoT).
Avasant defines Internet of Things as an interconnected system of assets/objects that are equipped with sensors and embedded systems designed to extract information about the devices or their surrounding environment that can then be used for real-time analysis to enable intelligent actions.
It is the network of “smart” devices, machines and physical objects that have embedded technologies which allow them to connect to the internet and interact with their physical surroundings and other IoT objects.
IoT is revolutionizing the way we explore, observe, understand and interact with our environment. With connected devices growing faster than both the population and number of internet users globally, IoT presents an unprecedented business opportunity which organizations should capitalize on to support and enable enterprise growth and derive true business value. IoT has enabled enterprises to not only streamline their supply chain, but also reinvent new business models, as well as new product and service offerings.
Today, organizations are recognizing Internet of Things as an integral technology pre-requisite for a connected enterprise with the power to transform their business and seize new opportunities for growth. Its applications and use cases have been profoundly increasing, not just across corporate entities, but throughout governments, non-profits, educational institutions etc.
Key Internet of Things Trends Shaping the Market
Internet of Things, as a technology, has crossed the proof-of-value cusp and is recognized by enterprises as a critical element of their business growth strategy. Enterprises are putting more broad scale implementation into action, especially in conjunction with other emerging technologies, for generating true business value. By examining over 400 IoT uses cases, and evaluating 43 providers on their adoption of IoT services, Avasant’s Internet of Things Services RadarViewTM Report 2019 unveiled the following key enterprise IoT trends shaping the market.
IoT Enables Data-Driven Business and Industry 4.0 Enterprise Transformation
Over 45% of Global 2000 organizations are leveraging the tracking and data acquisition capabilities of IoT to enable a transformation towards becoming data-driven enterprises. Enterprises are using IoT in conjunction with big data/analytics, to drive real-time monitoring and performance improvement.
IoT has also created opportunities for enterprises to identify and monetize previously untapped data assets, enabling organizations to develop and scale alternate business paradigms such as product-to-subscription, asset sharing, as-a-service and usage-based pricing models. Enterprises are successfully adopting these models at scale across the spectrum of industries and are reaping the benefits of connecting information with processes.
Enterprises Across Industries are Taking IoT Use Cases to Scale Production
IoT has long been associated with asset tracking and industrial automation. However, various industries are increasingly looking beyond these operational measures and leveraging IoT as a driver for reinventing their business models and developing new revenue streams.
IoT combined with other digital technologies has become the first mile as well as the last leg for a data-driven enterprise. Asset-centric manufacturing, travel, logistics, and utilities industries scaled IoT implementation in industrial asset, fleet and inventory management use cases. Other industries, such as healthcare, financial services, retail and government have also accelerated adoption.
Enterprises that moved beyond proof-of-concept and pilot stage to enter broadscale implementation doubled in the last 12 months. This two-fold increase in enterprise-wide implementations of IoT based solutions indicates improved maturity and value proposition.
Enterprises Converge IoT with Other Disruptive Tech to Drive Innovation
IoT has woven a thread across industry verticals, supported by a confluence of disruptive technologies to drive innovation. More than 90 percent of top IoT platforms used by enterprises include features related to at least 3 emerging technology areas, including edge computing, big data/analytics, and machine learning. This is enabling enterprises to move beyond simply monitoring the state of their connected processes to supporting predictive maintenance and optimization to real insights.
AI and Blockchain combined with IoT capabilities are driving new efficiencies in industry value chains and becoming the foundation for Industry 4.0 and autonomous enterprise. IoT connects machines and AI stimulates learning intelligent behavior in those machines. Combining the two helps in predictive, prescriptive and adaptive analytics.
Further, leading organizations have already initiated key pilot projects around the three main application areas of IoT + Blockchain: smart contracts, automated payments and shared economies. Blockchain converged with IoT handles the privacy and reliability concerns of IoT and uses a cryptographic algorithm to help privatize consumer data. Blockchain can also track connected devices, allow the processing of transactions and help to create a more resilient ecosystem as it keeps a record of all the smart devices.
Acquisitions Across the IoT Ecosystem to Build Adjacent Stack Capabilities
Market participants, i.e., hardware, technology, connectivity and service providers across the IoT ecosystem, have been acquiring firms to access adjacent opportunities. IoT acquisitions are enabling a faster time to market, cost savings and new revenue streams. This new trend in IoT investment is having an impact on the way organizations are interacting as IoT has become a driver of M&A activity. There have been over USD 20B worth of tech provider acquisitions and over 16 major service provider acquisitions in the last four years.
Technology providers are using marquee acquisitions to expand capability and develop adjacent services. Service providers are increasing IoT capability through inorganic means, with over eighty-five percent actively seeking more acquisitions in the IoT space.
Enterprises are also betting big with multi-billion dollar acquisitions of IoT solution providers to transform their businesses and accelerate industry-disruptive product development.
The IoT ecosystem is complex and vibrant. Across industries, new IoT applications are being defined as enterprise value chains adopt disruptive technologies. IoT is driving innovation, efficiency, and increasing utility across the value stream for all industries, improving customer experience and enabling development of new products and business models. New IoT use cases are mushrooming every day and a number of them have already reached scale.
As enterprises aim to become more data-driven, they will need to implement IoT as a foundational technology for data acquisition across people, assets, and processes. However, progressive organizations are realizing that true business value from these initiatives is contingent on integrating IoT with other disruptive technologies to fundamentally reshape their value chains. This has led to a significant increase in demand for comprehensive IoT services across all key industries. Enterprises, to stay competitive, must consider IoT as a lever for operational and business transformation, with its potential to drive new business models and product lines.
About Avasant’s Internet of Things Services RadarView™
Internet of Things, as a technology, has crossed the proof-of-value cusp and is recognized by enterprises as a critical element of their business growth strategy. Avasant’s ongoing interactions with enterprise digital leaders indicate that taking IoT to scale and using it for business transformation and for developing new revenue streams is an area of significant focus. They are looking to identify service providers that take a progressive, business-centric view to support them. The Internet of Things Services RadarView 2019 Report aims to address this need and to equip enterprises with granular understanding of key service providers.
Avasant evaluated 43 providers using a rigorous methodology across 3 key dimensions: practice maturity, investments and innovation, and industry development. Of the 43, 24 are recognized as having brought the most value to the market over the last 12 months. This report also highlights the Avasant’s viewpoint on the future direction of the industry over the next 12 to18 months.
To address the shift towards digital services that enable enterprise transformation, Avasant has developed a barometer which reflects the true capability of service providers in this era of converged services. Avasant’s RadarView™ is an independent assessment that reflects the true capabilities of service providers, with a view of evaluating them as long-term partners for digitally evolving global organizations.
RadarView™ is based on our proprietary Digital Maturity Framework and is designed to gauge service providers on the factors that have emerged most critical to global organizations in our research. The framework encourages greater innovation and customer centricity that helps service providers align their digital efforts.