It’s sometimes difficult to recognize when someone or something has developed beyond the early stages and reached a status quo. Mark Whalley, Head of Hyperconnnected Solutions at Fujitsu EMEIA, reviews a new Fujitsu research white paper that reveals that the Internet of Things (IoT) has already reached an unexpected level of maturity.
I don’t know about you, but I have read more than enough “insight” about how IoT is going to change the world and transform organizations at the same time.
It’s easy to speculate but what I’m interested in is something more concrete – what’s really happening and why? Where is it happening and what plans do organizations actually have for the future?
That’s what Fujitsu has just brought to the table with a new white paper, Things Are Moving Fast: The State of IoT Today, based on a global survey commissioned from the respected independent research house IDG, conducted among 330 respondents from Europe and Asia.
The results are highly illuminating. To give you a snapshot:
- There are very rapid ROI expectations, often within two years
- A market maturing faster than might be anticipated
- IoT’s perceived ability to breed premium pricing and revenue‑generating opportunities for customers
- Exploit synergies with Big Data and artificial intelligence
- The belief that vendors need to provide better customer support
- The pre‑eminence of IT in driving projects and that network connectivity and skills could be the biggest obstacles
The research findings are rich in detail – too much to cover here, so I encourage you to download and read the white paper [link].
To stoke your interest, here’s insights into some of the key themes – progress so far, motivations, expectations, and practical options.
Not a fantasy
Go hunting for information about IoT and a lot of what you’ll find starts from the premise that we’re talking about the future. That turns out to be outmoded thinking.
Three‑quarters of respondents said they were either already operational or even delivering value with IoT, while almost all the rest have near‑term plans. India was notably bullish, with 67 percent saying they were already successfully operational and, turning to sectors, retail respondents (36 percent) were most likely to say they were already successfully operational.
This seems logical, as IoT is a clear enabler for the delivery of fast‑moving goods and for tracking footfall. Financial Services wasn’t far behind (34 percent), with wearables and smart devices changing the way we handle payments and integration with smart home equipment.
With maturity already so far advanced, this should be a wake‑up call if your organization is not yet at the IoT table.
What’s really happening?
The sheer diversity of IoT applications was another eye-opener from the research, with a wide variety of answers closely bunched. The standard answer is that IoT creates efficiencies and improves service options.
In fact, the equal‑biggest response in Fujitsu’s new research is for neither of those things but in improving health‑and‑safety and security. We were not altogether side-swiped by this finding, as Fujitsu’s UBIQUITOUSWARE IoT solution has already made great strides in this direction.
Being able to use data to build smarter strategies is also prominent, as are improved maintenance. But more interesting than these predictable findings was the perception that IoT delivers the chance to create new revenue‑making opportunities.
How to make money from IoT
Given the unexpectedly mature thinking we unearthed for the range of potential applications, it is not a complete surprise that the range of options for extracting value from IoT identified by the research is encouragingly broad.
The white paper makes a shrewd segmentation of these approaches into defensive strategies (retention of ‘flight‑risk’ customers, general efficiency) and attacking strategies (premium prices for IoT‑infused products, data or services such as retail goods enhanced with sensors, vehicles that report back on their location and status, or business intelligence sold to interested parties).
Defensive strategies usually glean the majority of comment, so I’ll focus on the attacking side here, where the biggest financial impact of IoT is likely to be the delivery of smarter products that command a premium price.
This is already playing out in consumer markets with smart locks, temperature control, lighting and so on, creating the ability to sell at a higher margin. It seems highly likely we can expect this same dynamic to be played out in B2B soon.
When do I get my money back?
Another sign of the hidden maturity of IoT is that the survey respondents are clearly also expecting near‑term returns on their investment. Just under half (46 percent) expect payback within two years (15 percent within one year!).
Extend the timeframe to three years and that figure rises to seven out of ten (71 percent). India was once again bullish with 31 percent seeing ROI inside one year, while 22 percent of finance/banking also saw that very rapid return.
As the whitepaper comments, the modern experience of rapid-payback cloud transformations has erased the old mentality of big-bang ERP deployments with ROI measured over much longer horizons. IoT must and, it appears, can deliver on cloud-scale payback cycles.
How to get there
We also looked at the sort of commercial and technical partnerships that organizations have or want on their IoT journeys. The numbers that came back in the research indicate that the extent to which customers will be looking for consultative engagements rather than ready‑made solutions for specific use cases is unclear so far. Experience suggests that the latter will be more prevalent as maturity increases, but at this early‑stage a fair amount of hand‑holding can be expected.
Much clearer was the number one demand for deeper customer support, which marries with the findings of other surveys in this area where CIOs express a need for a deeper understanding of their unique business needs and a willingness to engage with staff rather than merely supporting on break/fix issues.
This has been a brief swoop over the findings reported in the white paper, where you will find greater detail as well as further insight into barriers to adoption, interaction with other major IT initiatives such as analytics and AI, and the ever-thorny issue of project leadership.
If I had to isolate one key factor from the data, it’s the unexpected global maturity of IoT. If your organization has not established its options or strategy, then there is a good chance an existing competitor – or a competitor about to enter your market from another region or sector – has already done that and is about to eat your lunch. You need to start now to avoid being left behind.