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Customers Have Tempered Their Expectations for the Internet of Things

Enthusiasm remains high, but few expect the IoT to grow as quickly as they did just two years ago.

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Customers Have Tempered Their Expectations for the Internet of Things
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Enterprise customers remain bullish on the Internet of Things, but their enthusiasm has been tempered by the realization that complete solutions may take longer to implement and yield a return than they had originally expected. These customers believe that vendors are making slower-than-expected progress on lowering the most significant barriers to IoT adoption—including security, ease of integration with existing information technology (IT) and operational technology (OT) systems, and uncertain returns on investment. Accordingly, they have extended their expectations about when those use cases will reach scale in their organizations. On average, they are planning less extensive IoT implementations by 2020 than they were planning just a couple of years ago. In spite of these concerns, enterprise and industrial customers still see success within their reach. They are running more proofs of concept than they were two years ago, and more customers are considering trying out new use cases: 60% in 2018 compared with fewer than 40% in 2016.

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.

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