IoT Signals

The Internet of Things (IoT) has become a mainstream business driver. But how are leaders approaching implementation? Explore key insights from our 2019 IoT Signals research into the increasingly important role of IoT.

IoT is driving both opportunity and revenue

As the gateway to business transformation, IoT is creating significant opportunities for organizations in every industry. In fact, 88 percent of companies surveyed in the IoT Signals report said it’s critical to their success. IoT is one of the catalytic innovations that make up a connected enterprise, which also includes intelligent cloud, edge computing, advanced analytics, artificial intelligence, and mixed reality.

Connected assets give you unprecedented visibility into your business and insights for optimizing operational efficiency, increasing workplace safety, and saving energy. But how prevalent is the implementation of these initiatives? This is one of many questions that IoT Signals seeks to answer.

Microsoft surveyed more than 3,000 IoT decision makers in enterprise organizations to dig into the trends and key insights of IoT implementation. We found that 85 percent of decision makers have adopted IoT, and 74 percent have projects in the "use" phase. Businesses adopting IoT believe they’ll see a 30 percent ROI on their IoT projects. However, as IoT matures, there are three key obstacles that companies must address: security threats, project complexity, and the growing skills gap.

In the original IoT Signals report, we looked beyond the broader trends with a spotlight on the manufacturing sector. We've updated the report to include a spotlight on the retail sector, and in March we'll add additional insights from the energy and healthcare sectors.

Security

Concerns not hindering adoption

Nearly all companies (97 percent) have security concerns when adopting IoT. But, with implementation on the rise—particularly among critical industries like healthcare—security must be addressed from the beginning for both devices and networks. Internet connectivity is a two-way street. It’s more important than ever to address security in every layer because IoT devices provide digital access to home and work networks – and the sensitive data stored there.

Among companies surveyed, the most important security aspects are:

0%

Network-level security

0%

Device tracking and management

0%

Endpoint security

IoT skills gap

Skills gap holding back potential

Despite its rapid adoption, IoT is not without challenges. Even when IoT is adopted, the same adversities can hinder success.

Only 33 percent of current adopters feel that their companies have adequate workers and resources to see their projects through to realization.

Companies with enough skilled workers:

The opportunity is vast for businesses to get ahead, but the skills gap must be prioritized for IoT to realize its true potential.

  • Propel more IoT projects into "use" stage
  • Reach the "use" stage in less time
  • Fail fewer times in proof of concept state
  • Experience fewer challenges
  • View IoT as a stronger investment

Industrial IoT in action

There will be more than 20 billion connected devices by 2020, but IoT is more than just your smart speaker and thermostat. Connected devices have the ability to save energy in smart buildings, improve the flow of traffic in congested cities, increase crop yields, prevent equipment failures on a factory floor, and power medical breakthroughs.

Companies adopt commercial IoT for operations optimization (56 percent), followed by employee productivity (47 percent), and safety and security (44 percent).

However, different industries have unique uses for commercial IoT:

Spotlight: Manufacturing

Pioneering mainstream IoT adoption

No industry has seen the benefits of IoT more than manufacturing, where the intersection of equipment monitoring and remote command comes together with big data and advanced analytics. Operational cost reduction, agile production implementation, and improved worker safety are just a few reasons why manufacturing has been quicker to embrace IoT than other industries.

Meet Dave, a decision maker at a golf club manufacturing company, where he uses IoT to ensure the quality of their golf club heads as they’re being produced by vendors. He believes IoT is critical to success. Let's take a look at his process and where IoT comes into play—now and in the future.

I absolutely think our use of IoT will increase. My goal is to make it as automated as possible and as seamless as we can so that we are getting quick data as the product is created.

1. Development

Create a concept and specs for a new golf club head.

2. Test batch

Send specs to overseas vendors to produce a test batch.

3. Validation and Quality Assurance

Test the batch for durability and performance quality using real-time data via connected machines at vendor sites.

4. Mass production/assembly

Using production equipment containing sensors to determine maintenance needs, vendor partners produce the club heads and send for final assembly.

5. Distribution

Ship final products to customers and sellers using inventory tracking sensors.

6. Future IoT use

  • Converting IoT-connected production machinery and equipment from hard-wired to WiFi-based.
  • Applying the validation system to other components of golf clubs, such as shafts and grips.

Spotlight: Retail

The retail industry has embraced IoT technology, particularly in scenarios where brands need to build flexible supply chains, hire strong talent, and optimize the customer experience to be as efficient and nimble as possible. However, talent, knowledge, and budget can be scarce, and the responsibility of demonstrating the value and impact of IoT solutions often is outside the domain—and expertise—of many retailers.

Here are just some of the retail findings in the IoT Signals report:

  1. Retail IoT implementation is already strong, but improving customer experience is a growth opportunity.
  2. Artificial intelligence is integral to IoT, and retailers that incorporate it achieve greater IoT success.
  3. Retailers around the world are committed to IoT despite some shifts in focus areas by market. The US tends to focus on security solutions, while European retailers focus more on supply-chain and store optimization.

Read the retail spotlight

Learn more about IoT adoption, challenges, and trends