On Wednesday, Bain & Company released a report claiming that spending within the Internet of Things (IoT) market could more than double within the next three years. Their experts project that sales in hardware, software, systems integration, data and telecom services could increase to $520 million by 2021. IoT spending was $235 billion in 2017.
Bain & Co. has published a similar report before. In 2016, the firm surveyed over 170 executives at IoT and analytics solutions vendors and more than 500 executives looking to utilize these solutions. The results of the survey showed that big companies were very enthusiastic in increasing their investment in everything IoT — from speakers to Wi-Fi connected thermostats to video surveillance cameras and factory sensors. That 2016 study expected that spending would increase to $450 billion by 2020.
But Bain & Co. now projects that businesses are even more invested in meeting the increasing consumer demand for these new age devices. The reason? Experts say that since manufacturers are developing more efficient technology, the logic stands that there would be a boost in sales.
What could slow the market’s growth
Even so, the report suggests that IoT vendors have a lot of more areas in improvement than just simply improving the efficiency of their products.
For example, many connected devices are designed to collect information and send them to cloud data centers where the information can be analyzed by the manufacturers. Data can be used to monitor secure areas, measure crowds or determine when a machine’s parts need repair. These capabilities not only help companies to improve their products, it helps them save money on hiring personnel for device maintenance.
The problem is the data collection has not been as beneficial as some vendors predicted. Some companies have complained about the difficulty of integrating different data formats. When elevator manufacturer Schindler and GE partnered together to collect sensor data from over 60,000 elevators, they found that the lack of historical data made it challenging to predict maintenance needs.
The biggest worry among consumers of IoT products is security. Bain found that 42% of businesses are concerned that they were concerned by the risk of hackers infiltrating their computer systems.
The report also cited that companies are looking for more solutions to integrate new and old systems. Others were not confident in the return of their investment in IoT devices.
Ann Bosche, an IoT expert and a partner in Bain & Co.’s Global Technology Practice, suggested that in order to solve these issues vendors need to narrow their focus.
“Based on our experience with previous technology cycles, the key to addressing these concerns lies in focusing on fewer industries in order to learn what customers really want and need to ease adoption,” Bosche said.
According to Bain, if IoT vendors are able to work out the bugs for their consumers, the market is sure to surge.