With more than a trillion connected devices expected to be in use by 2020, the Internet of Things (IoT) has become a critical focus area for many enterprises. However, the rate of IoT adoption among companies lags behind the pace of industry development, according to a new research report from Information Services Group (ISG), Stamford, Conn.
The latest ISG Provider Lens Quadrant report notes the IoT market—from the development of standalone point solutions to complete end-to-end offerings—is rapidly evolving, but broad business adoption of these solutions is not growing as fast as some expected, due to the current challenge of generating a positive return on investment.
"The benefits of IoT are undeniable. IoT can bring much of the physical world—from industrial assets to commonplace devices to people—into a connected ecosystem, resulting in enhanced customer experience and better business outcomes," says Esteban Herrera, partner and global leader of ISG research. "The biggest challenge slowing IoT adoption is the upfront investment needed to implement an IoT ecosystem. So far, the costs are exceeding the expected returns."
For service providers, industry-specific IoT is proving to be more successful and profitable than horizontal solutions targeting broad business transformation, the report noted. IoT currently is showing its greatest value in the manufacturing, energy and utility industries. These sectors are benefiting from IoT-driven optimization of operational processes, predictive maintenance and inventory and supply chain management.
Other sectors and use cases beginning to see benefits from IoT are healthcare, transportation and smart cities and offices, as well as such consumer-related areas as retail, hospitality, smart homes and connected vehicles.
The ISG Provider Lens report addresses the benefits of IoT in healthcare, connected cars and retail. It also provides an overview of IoT services such as consulting and implementation, technology integration and execution and IoT ecosystem management, while addressing the importance of IoT platforms.
Platforms should enable integration and interoperability of connected systems and provide data management, cognitive and predictive analytics and security. Key factors in choosing an IoT platform include cost, features and scalability, the report says.
The ISG Provider Lens Internet of Things Quadrant Report evaluates 26 IoT technology and services providers serving the U.S. market across five quadrants—IoT services, healthcare IoT, connected cars IoT, retail IoT and IoT platforms.