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IOT is at work in 34% of global companies

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Almost three-quarters of adopters say IOT non-adopters will fall behind their rivals within five years.
Almost three-quarters of adopters say IOT non-adopters will fall behind their rivals within five years.

A third of global companies use Internet of things (IOT) technology and the trend of IOT adoption is expected to keep growing.

This is according to new stats from Vodafone IOT Barometer 2019, which found 34% of businesses now use IOT and 70% of these adopters have moved beyond the pilot stage.

"It's no longer just an innovation or an idea, it has become more tangible and more impactful," said Peter Malebye, managing executive for Vodacom Business IOT, presenting the results in Johannesburg yesterday.

This is the sixth year Vodafone has published the report, and since the previous IOT Barometer, the researchers have seen "a significant acceleration in adoption", with the number of companies that have adopted IOT rising from 29% in 2017, to 34% in 2018.

"This surge has been driven by a range of factors, but key has been a breaking down of the barriers to entry," the report says. Vodafone believes this is being driven by the growing availability of IOT enablement platforms and new, cost-effective connectivity options.

"We are at a tipping point where people are now looking for scale, and in that we are seeing a partner collaboration ecosystem starting to build; we see clients looking for partners who can give them managed solutions and share in the risk of those solutions," Malebye said.

"Many industries in SA and on the continent have already adopted digital transformation strategies and that means IOT is going to be a key enabler in those industries."

With responses from 1 758 businesses worldwide, the Barometer found 95% of adopters are seeing the benefits of investment in IOT technology as it moves into the mainstream and 53% of adopters report reduced operating costs.

"So industries are choosing use cases that can give them a quick return on investment and then they are reinvesting that money so they can drive their roadmap. In the automotive sector, they are already quite mature in terms of that ecosystem and the investment they are making," Malebye noted.

Almost two-thirds of businesses that use IOT agree it has either completely disrupted their industry, or will do so in the next five years.

"IOT is central to business success in an increasingly digitised world, with 72% of adopters saying digital transformation is impossible without it. The good news is that IOT enablement platforms make the technology easier to deploy for businesses of all sizes, and connectivity options like NB-IOT and 5G will make implantation easier and improve services.

"In this climate, companies need to be considering not if but rather how they will implement IOT, and they must also be fully committed to the technology to capitalise on the positive value and outcomes enabled by IOT," Malebye added.

Almost three-quarters of adopters say that within five years, companies that have not adopted IOT will have fallen behind their competition as a consequence.

Almost 85% of adopters report growing confidence in IOT, with 83% saying they are increasing the scale of deployments to take advantage of the full benefits, and 73% of adopters believe that in five years, everything will be connected.

"We no longer face a challenge of explaining IOT. The challenge we are starting to face is about showing the outcomes and tangible impact it is going to have because now the deployments are starting to grow," Malebye explained.

Peter Malebye, managing executive for Vodacom Business IOT.
Peter Malebye, managing executive for Vodacom Business IOT.


The report also graded businesses in IOT usage by assessing strategy, integration and implementation of IOT deployments. The report ranks them in "five bands of sophistication" with band A being "most sophisticated", band B "very sophisticated", band C "intermediate", band D "beginners", and band E labelled as "still considering" IOT.

Globally, the report found that just over a quarter (27%) of the companies fell into one of the top three sophistication bands. The percentage of companies in band A barely changes by region, while the spread across the other bands varies much more.

Distribution of IOT sophistication globally.
Distribution of IOT sophistication globally.

Companies in the Americas have the highest average sophistication, and while Asia-Pacific leads in adoption, it has a significantly lower percentage of organisations in the top two bands. In contrast, the Europe, Middle East and Africa (EMEA) region has the highest percentage of companies in band E and also the lowest share of companies in the top three bands, at only 22%.

Average IOT sophistication in EMEA region.
Average IOT sophistication in EMEA region.

The most advanced companies also saw the greatest return on investment in IOT. The report found 87% of those in the top level reported significant returns or benefits from IOT, compared to only 17% in the beginner's level. These benefits breed increasing reliance on IOT: 76% of adopters say IOT is mission-critical, some are even finding it hard to imagine business without it and around 8% say their "entire business depends on IOT".

What about Africa?

The report did not have any stats specific to Africa or SA, but when asked about the local markets, Malebye said he believed there are already clients in band A and B but could not give an exact percentage of how many.

"But I would rank the automotive fleet as already operating at an A, because we see most of the automotive sector becoming global companies already. I would rate our retail around a C. But it is growing because already there is investment and you will see a trend where many companies have digital officers, so that already talks to a level of sophistication around IOT strategy. Where we still lag is more on the implementation side, but that is where the market is now waking up.

"So my sense is to say that if you are ranking SA and Africa, we will rank high on specificindustries.

"When you listen to the speeches the president [Cyril Ramaphosa] is making, he is talking about the fourth industrial revolution, and in talking about that, it's from a principle that says IOT is going to be a key enabler to solve most of the challenges we face as a country. So I think now is an opportunity for us as an industry to say: how do we make sure that from a skill implementation level, we build the capacity to absorb the demand based on where the need is? And that is the challenge and where the opportunity is going to be."

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