The Internet of Things is driving revenue, return on investment -- and an even greater need for virtualization, as internal business units task IT to integrate and innovate.
IoT pays for itself by creating new products or services or making existing offerings more profitable, according to Vodafone's fourth annual IoT Barometer Report, which surveyed almost 1,100 professionals across 17 countries in multiple roles, including 40% who held IT positions. In fact, 55% of IoT adopters in the Americas saw revenue grow more than 20% after they implemented this technology, the study found, and 74% say it is critical to their organization's future success.
Major trends and findings include:
- Within the past 12 months, 86% of those polled have increased their IoT budgets
- IoT now represents 24% of the average IT budget
- Within the Americas, one third of IoT adopters use this technology to connect different organizations and/or industries
- Consistently, 54% of respondents store IoT data and applications in the cloud; 36% do it in select instances
- Only 10% of those surveyed believe they should ultimately be responsible for safeguarding their IoT projects. Approximately one fifth cite their IoT service aggregator or systems integrator as the one that should oversee security, while 17% want to rely on their communication or connectivity service provider, Vodafone says.
Breaking the IT Bank
IoT spending narrowly edges out the amount organizations spend on cloud and hosting.
(Source: Vodafone IoT Barometer Report)
"If I look back over the past two years... initially funding for these large IoT projects has usually come from within the business not from IT budgets. As these organizations start to realize, this is an extension of our IT infrastructure, they have had to then make allotments from their IT budgets," says Andrew Morawski, Vodafone's head of IoT for the Americas, in an interview.
Recognizing the value of IoT, the importance of integrating these solutions with other internal and external systems and needing to secure data and solutions, business units are ceding control to IT departments and their partners, such as CSPs.
The IT impact
Several studies, including Computer Economics IT Spending and Staffing Benchmarks: 2016/2017, point to IT budget increases this year of about 2%, despite more demands on a similar number of staff. This, coupled with aging internal infrastructures, is one of many reasons enterprises continue to up their cloud investments.
Add even more ambitious IoT projects to the mix, and virtualization becomes especially attractive -- if not vital, Morawski says.
"As folks are going through this business transformation and they do these global initiatives, things cannot just sit somewhere anymore. You can't really be agile if you're building and owning and living by the old-school model. If you're not working in a virtualized environment you're not going to get the maximum effect," he says. "This data is core information about what their customers want, what's happening within their business. These are key things the business units need to be able to react to. It's more so driving virtualization and people moving toward more hosted solutions."
— Alison Diana, Ambassador, The New IP Agency
. Follow her on Twitter @alisoncdiana