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The Drivers and Benefits of IoT Are Changing

The Internet of Things (IoT) has evolved significantly since its humble beginnings.

Many point to Google’s use of 360-degree cameras and storage of mass data on Wi-Fi networks as ground-breaking in the Summer 2010, paving the way for this new breed of technology to thrive. Others trace the concept of adding sensors and intelligence to physical objects to the 1980s, when university students decided to modify a Coca-Cola vending machine to track its contents remotely.

But the term ‘Internet of Things’ was coined in 1999 by computer scientist Kevin Ashton. While he was working at Procter & Gamble, he suggested putting RFID chips on products to track them through a supply chain.

The reality today is that by 2023, it’s predicted that there will be 15.1 billion IoT connected devices implemented globally, collectively transforming our homes, cities, roads, workplaces and many other things in between.

However, it is not just the volume of devices that has exploded. Equally, the purposes that they serve and benefits they offer are also transforming as adopters look to extract maximum value from the technology.

In our latest report, The Journey to IoT Maturity, we explored how the motivations for implementing IoT have shifted in the past five years, with several significant findings emerging.

Cost reduction

The percentage of those leveraging IoT to optimise internal operations has dropped. Indeed, while cost reduction remains a driver for IoT adopters, just 6% of respondents rank this as their top driver in 2022, down from 16% five years ago. Meanwhile, those prioritizing more efficient businesses also dropped slightly from 13% to 11%.

Fewer respondents also cited cost reduction as a key benefit of IoT initiatives, dropping from 45% in 2017 to 27% in 2022. These figures suggest that many adopters have satisfied those earlier internally focused goals and are now looking to tap into more sophisticated strategic benefits today.

Competitiveness

For this reason, competitiveness has moved up the agenda as a major IoT driver.

Those citing competitive advantage as the top driver rose from 6% to 10% between 2017 and 2022. Further, the ability to remain competitive is the benefit that has seen the largest growth since 2017, up from 27% to 37%.

It’s clear that organizations are reimagining the technology as a way to stand out in the marketplace, the slight increase in those citing customer experience as the top driver (from 6% to 8%) reinforcing this renewed focus and emergence of new goals.

Sustainability

A third driver for IoT that has garnered greater attention and support in the last five years is sustainability. While still a relatively low figure, 7% of respondents listed environmental protection as their top driver for IoT projects in 2022 – but this is up from 1% five years ago.

This emphasis has realized itself in different ways to date, the harnessing of IoT connectivity helping to optimize energy efficiency and availability through improved insight into critical systems.

A sea change

Several new drivers were also introduced into the 2022 report compared to the 2017 edition. One stands out in particular – improving citizen safety and quality of life, cited by one in eight (12%) respondents as their top catalyst for change.

What is also notable is that one in 10 stated that their top reason for implementing IoT initiatives and processes is that ‘everyone is either doing it or thinking of doing it’. Five years ago, this was cited as a reason by just one respondent.

Such figures suggest a sea change in motivations. With adopters moving away from leveraging IoT for internal efficiencies and towards a more external, user-focused approach. As more organizations unveil progressive IoT projects and demonstrate the benefits of investing in the technology, others will continue to take notice and ramp up their own activities.

To learn more about the shift in IoT drivers and the benefits that adopters are actively pursuing in the current climate, see the full Wi-SUN Alliance report here.