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Techaisle Blog

Insightful research, flexible data, and deep analysis by a global SMB IT Market Research and Industry Analyst organization dedicated to tracking the Future of SMBs and Channels.
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IoT delivering unexpected business outcomes to SMBs and Midmarket firms

Techaisle research, US SMB and Midmarket IoT adoption trends, analysis of 1,135 unique SMB survey responses, leveraging its network of over 1.5 million b2b respondents globally, shows that for US SMBs and midmarket firms that have production-level deployments IoT has helped improve controls within their businesses through better operations monitoring, increased business agility by improving processes, enabled them to develop new products and delivered reduced costs by increasing productivity and automation. 34% of SMBs began their IoT deployment with the hope of improving customer experience, 32% were expecting better cost efficiencies and 29% were targeting increased revenues. However, these SMBs experienced unexpected business outcomes with 43% reporting improved controls within business through better operations monitoring, 42% achieved increased business agility by improving processes and 41% were able to develop new products and services. These business outcomes’ percentages are almost identical demonstrating the fact that two out of five SMBs using IoT are deriving multiple positive business outcomes from their IoT deployments.

IoT is still an early stage technology. Survey data shows that IoT solutions are deployed in just 8% of small businesses and 28% of midmarket businesses. But these figures overstate the number of IoT production systems deployed by SMBs; many of the reported projects are exploratory. However, planned adoption trends show that the IoT usage and penetration may exceed 60% in midmarket and reach 35% within small businesses in the next 2 years. Generally, early IoT adopters are focused on one or more of security/surveillance, proactive alerts, reducing inventory levels and asset tracking.

Comparing 2018 survey with 2019, data shows that small businesses seem to have either tempered their ambitions to deploy IoT solutions or they tried and abandoned their efforts. Except for the 100-249 employee size firms, most mid-market firms, on the other hand, have increased their IoT adoption efforts. As a result, IoT adoption within the SMB market is still at an early stage, hindered by limited budget, costs and lack of skills. In fact, more than 50% of current IoT systems are at early stages of maturity: 19% incorporate minimal sensor deployment feeding isolated systems or feature devices that support remote monitoring / service / control. Only 10% of firms that have deployed IoT can be categorized as advanced users, having real-time information feeding enterprise-wide data intelligence solutions or connected devices creating competitive advantage.

It is important to note that while 23% of small businesses were conducting ad hoc pilots in 2018, only 13% are conducting such pilots in 2019. This however does not mean that all small businesses have migrated their ad hoc pilots to production – some have abandoned the project and some others have set loftier objectives. The biggest changes from 2018 to 2019 are in their objectives for creating new revenue opportunities, new levels of collaboration between suppliers, partners and customers as well as supporting predictive maintenance.

Comparing 2018 survey with 2019 for midmarket firms, data shows that IoT implementation is trying to move beyond providing basic information such as alerts and notifications to more grounded and embedded opportunities such as remote product management, improving quality of service and reliability as well as achieving new levels of co-operation and collaboration with partners, suppliers and customers. Unlike small businesses, the percent of midmarket firms conducting ad hoc pilots has increased from 2018 to 2019 demonstrating that either more firms are jumping into IoT or a new set of firms are adopting IoT faster than those which are abandoning their efforts.

SMBs face multiple barriers to IoT deployment. These include: high costs for implementation, lack of security and privacy standards, lack of skills to integrate IoT solutions with existing systems as well as lack of in-house skills to architect and maintain IoT solutions.

Small businesses and midmarket firms report some important differences in IoT deployment challenges. Small businesses are impeded by costs – particularly, lack of budget – and by a perceived lack of need for IoT within their business or industry. Midmarket firms, too, view cost as a major obstacle, but are hindered more by high costs of sensors and implementation than lack of budget.

In 58% midmarket organizations and 38% of small businesses, IT has provided leadership for deployment of primary IoT solutions, and in 17% of both midmarket firms and small businesses, IoT leadership comes from operations.

More data and analysis is available in the research report - US SMB and Midmarket IoT adoption trends

Similar, in-depth research is currently in the field for Europe, Asia/Pacific and Latin America.

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