IoT: From Hype to Reality

The Internet of Things (IoT) has been a buzz word ever since it first entered the Gartner “Hype Cycle” in 2011. By the time it first peaked in 2014 experts were predicting 50 billion connected devices by 2020, with investment topping $20 trillion. People thought everything from lamp posts to clothing to our bodies would be connected.

But whenever there is hype people tend to jump in feet first, instead of first dipping their toe in to test the temperature. It’s no different with IoT – five years on from it first peaking in the Hype Cycle the smoke has cleared and a different picture has emerged. The expected number of connected devices is now closer to 20 billion, with investment likely to be in the billions, rather than trillions.

So, what changed?

The US-based research and advisory firm Gartner first published its annual Hype Cycle in 1995. According to Gartner, new technology goes through five cycles: Innovation Trigger, Peak of Inflated Expectations, Trough of Disillusionment, Slope of Enlightenment, and Plateau of Productivity.

When IoT made its 2011 debut in the Hype Cycle it was part of the Innovation Trigger, before moving into the Peak of Inflated Expectations in 2014. Two years later, Gartner created a separate Hype Cycle for IoT, a move many speculated was based on the idea that while some IoT uses were maturing, others still had a way to go – and a separate hype cycle would better reflect the fragmentation.

When it comes to B2B, it’s clear that IoT is maturing. Streamlined processes, cost savings, possible new revenue streams – these are all proven benefits. Many companies see it as an essential part of their business strategy, but instead of going full steam ahead, their IoT solutions are based on a business case and they often started with a pilot, rather than with full implementation right away.

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Even as companies gain increasing understanding of IoT and how to best utilize it, challenges remain.

Despite IoT being a key strategic priority for companies, far too many solutions either fail or are not wholly successful.  Penetration is high, but utilization is low. Integration challenges, cost and duration of implementation, lack of skills and knowledge, fragmented markets, security questions – these are all reasons why an IoT solution can struggle.

It has taken far longer for companies to develop a firm understanding of the complexity of IoT, and even more importantly, many companies implement a solution without fully understanding or identifying which problem IoT will address, and how they will extract value from their IoT solution.

Additionally, the complexity of implementation varies from industry to industry. It’s easy to see and derive value when you slap a tracker on a car: you know where it is, you know when it needs maintenance, and you can measure everything from fuel consumption to road conditions.

On the other hand, connecting an airport is in many ways even more complex than connecting a city. There are systems for shops, airport tax, services to airline companies, support for the elderly or infirm, parking, WiFi… the list goes on and on. On top of that there are operational requirements, such as knowing where the baggage is.

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If we look at car trackers vs complex airport ecosystems it’s plain to see that there is no one-size-fits-all IoT solution – and the more that this is understood the quicker IoT will mature.

As IoT has evolved the smart IoT provider has learned that focusing on core capabilities, with the understanding that no single company can deliver the entire IoT solution on its own, puts them in a better position to serve their customers. Acting as a partner to customers by helping them identify where IoT will deliver real value and then drawing upon an external partner ecosystem to being together the right ingredients is a big part of IoT being where it is today. IoT providers are now thinking long term; the solution that works today may not be the one the customer needs tomorrow. Both businesses and technology evolve, and IoT is now acting proactively, prepared and ready for what is heading our way.

Another area where IoT has matured is understanding how to manage data and offering solutions to customers.  Realistically, it doesn’t matter how much data is flowing – if you don’t have a clear understanding of what you want from it and then a way to extract value you’re not getting much of anything from your IoT solution.

At the end of the day, IoT hype is well-deserved. It is the kind of technology that can truly transform a business, from an operational standpoint as well as a business development one. As the rate of maturity increases, companies will no longer implement solutions without enough foresight or knowledge because providers will be on hand to guide them through the process and act as a real partner.

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