Cisco Study: Few IoT projects survive proof-of-concept stage; Electric Imp on why not?

Only a minority of internet of things (IoT) projects get past the proof-of-concept stage, according to a Cisco study that also says just 26% of companies report completely successful IoT initiatives.

“It’s not for lack of trying,” said Rowan Trollope, Senior Vice President and General Manager, IoT and Applications, Cisco. “But there are plenty of things we can do to get more projects out of pilot and to complete success,” he added.

According to the study, the top five challenges across all stages of implementation were time to completion, limited internal expertise, quality of data, integration across teams, and budget overruns. The study found that the most successful organizations engage the IoT partner ecosystem at every stage of the IoT implementation plan, which implies that strong partnerships throughout the process can smooth out the learning curve.   Another key finding was that 64% of surveyed decision-makers agreed that learnings from stalled or failed IoT initiatives have helped accelerate their organization’s investment in IoT.

“We are connecting things that we never thought would be connected, creating incredible new value to industries.  But where we see most of the opportunity, is where we partner with other vendors and create solutions that are not only connected but also share data,” said Inbar Lasser-Raab, VP of Cisco Enterprise Solutions Marketing. “That shared data is the basis of a network of industries – sharing of insights to make tremendous gains for business and society, because no one company can solve this alone.”

Almost two thirds of all participants in the survey said they are using data from IoT completed projects to improve their business, the study revealed. Globally the top three benefits of IoT include improved customer satisfaction (70%), operational efficiencies (67%) and improved product/service quality (66%).

Cisco said that the “human factor” is key for the success of IoT initiatives. Human factors like culture, organization, and leadership are critical. In fact, three of the four top factors behind successful IoT projects had to do with people and relationships, the study said. These key factors are collaboration between IT and the business area of the companies,  a technology-focused culture, and IoT expertise.  In addition, organizations with the most successful IoT initiatives leveraged ecosystem partnerships most widely, Cisco’s study said.



Author’s Note:

The points made in this Cisco study were earlier revealed by Electric Imp’s Hugo Fiennes in his presentation: “Why are 70% of IoT Projects Stuck in PoC Purgatory?” delivered at the IoT Developers Conference, April 26-27, 2017 in Santa Clara, CA.

“To prove the value, and explore the interactions, the PoC has to be a lot more than a “connected thing”. It has to fulfil the business needs on a small scale. Only then can the risks and rewards be evaluated,” Mr. Fiennes said. “Because good IoT is outcome driven, early data often changes the direction of a PoC – simply because you’re uncovering the previously unknown,” he added.  Continuing, Hugo said: “Flexibility in all aspects is key, to allow you to iterate on the basic concepts and go in new directions if needed. This allows the project’s design to be refined whilst the process is low risk and cheap.”

Hugo claimed the top three issues slowing IoT deployment were: security, integration, and implementation complexity.   Security is the top organizational concern companies have with pursuing IoT solutions, but complexity of integration with existing systems, the expense and complexity of implementation are also important concerns for many organizations.

Perhaps the biggest obstacle is the inability to prove value in the PoC / field trial scope and budget.

Generally the issues here are issues with implementation and integration. In particular:

– You need to be able to develop and deploy quickly and cheaply.

– If the data can’t get reliably from where it’s created to where it’s consumed, it’s hard to prove value.

Hugo opined that “Cloud integrations are hard, because every application is unique.”  There’s an urgent need for IoT applications to be robust and scale; use multiple services and be able to change over time, he said. Flexibility is key.

The second big hurdle to overcome is  the ability to move confidently from trial to production. Security, maintainability, cost and completeness are the key issues here.

And of course, security is a huge concern for IoT applications as we’ve noted for many years.

“Security is a special challenge for IoT. IoT systems operate across the public internet; are deployed outside of the physical control of the organization; may remain in place in critical systems for 10 to 20 years; and may control critical infrastructure, or be capable of coordinated attacks on other systems. Furthermore, IoT developers are focused on business problems and may not have a strong security perspective. The devices themselves may lack critical hardware capabilities for securing their operation against attack. Securing IoT requires a balance of protecting against long term devastation and accelerating value generation…

Source: ”Internet of Thing Primer for 2017,’ by Gartner Group