The number of companies adopting IoT products has jumped significantly, according to a recent report from Vodafone, to 34% from 29% the year before. The numbers are part of Vodafone’s annual survey of 1,430 business executives around the world about their IoT plans.
The report is chock-full of interesting data, including the fact that, for internal projects, companies are buying existing solutions, whereas if they are going to offer it to customers, they mostly develop it themselves. That makes sense. If you are a restaurant, you buy the tables your customers eat off of but you make the food you serve them.
The report spends a lot of time discussing the benefits of IoT for adopters, with a focus on sophisticated adopters — those that have integrated the internet of things fully into their businesses. Of those most sophisticated buyers of IoT, 89% consider IoT as the sum of a greater whole that comprises the cloud, artificial intelligence, and analytics. Among unsophisticated IoT buyers, on the other hand, only two-thirds consider IoT to be part of a greater whole.
The report also offers a lot of data for those who make the case that IoT can mean different things to different people. There’s the aforementioned internal vs. customer-facing IoT, but also speed of message delivery, the amount of data sent, and the price companies are willing to pay to send their data. Which means that deciding what type of product to buy requires a company to determine what it needs within those parameters before it gets too far down a purchasing path.
Those needs will determine the type of connectivity, where data is stored, and a variety of other factors. I would add to those factors another one — security. While all data should be secure, to ensure greater levels of security, some data might require a more expensive implementation.
But two stats in the report encapsulate what I believe are two fundamental truths about the tech world. The first is a stat about 5G. According to the report, 52% of adopters are considering using 5G due to its greater capacity, reduced latency, and improved security, and because one can use it to create dedicated networks. Though my hunch is that, much like President Trump, they are just keen to have an opinion about 5G. But if you’d like a more realistic take on 5G in the enterprise and industrial IoT, I wrote about it here.
The other really interesting nugget in the report is about the value of data: 71% of adopters say that within five years companies will list their data resources on their balance sheets — and that number rises to 91% for the most sophisticated IoT adopters. The report’s authors believe that stat indicates “how much strategic and competitive value they think IoT data will have.”
I don’t disagree that such data will have exceptional value, but I’m really curious how one might develop GAAP-based accounting standards to report that value. Especially since data is actually not nearly as valuable as the inferences one can make from it. Data in isolation is just a bunch of numbers, or images. To make meaning from data requires that data be applied to a problem.
It might be as simple as a company recognizing a correlation between the temperature in a warehouse and the cost of running a particular machine, or a hospital realizing that the loudness in a room affects a patient’s ability to heal (and increases overall revenue, but not profits). The data here doesn’t matter as much as the inference, and the inference doesn’t even matter absent a business goal.
And yes, some data is hard to get. But only in rare cases will it be so rare that it is incredibly valuable on its own. So I’m really interested in how this plays out on balance sheets — including how companies may use this information to fool investors.