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Security, integration with existing technology, and uncertain returns on investment remain the biggest barriers to the adoption of Internet of Things technology by enterprise customers—just as they were in our last survey, two years ago. Security concerns weigh particularly heavily. Bain research finds that enterprise customers would buy more IoT devices and pay more for them (about 22% more on average) if their security concerns were addressed. Integration also remains a top barrier. Vendors haven’t made it easy for customers to integrate their IoT solutions into business processes, operational technology or IT—and they may be underestimating their customers’ concerns. If vendors invest in learning more about typical implementation challenges in their customers’ industries, they’ll be able to offer more complete end-to-end solutions.
Priorities are also shifting as customers learn more about which applications pay off faster. Predictive maintenance emerged as one of the first attractive IoT use cases as companies tried to determine more precisely when equipment needed maintaining or replacing. But some customer interest has waned because they found that the returns have taken longer than expected. Interest in remote monitoring, on the other hand, has risen because it tends to be an easily integrated or standalone application.
Ann Bosche is a partner with Bain & Company in San Francisco, and David Crawford and Michael Schallehn are Bain partners in the Silicon Valley office. Darren Jackson is a Bain partner in Los Angeles, and Christopher Schorling is a Bain partner in Frankfurt. All five work with Bain’s Global Technology practice.
Unlocking Opportunities in the Internet of Things
Vendors can improve the market by addressing customer concerns over security, integration and returns on investment.