A new industry study finds that many industrial organizations are increasingly focused on internet of thing (IoT) deployments but many are still in the early stages. A majority of the early industrial IoT (IIoT) deployments are in the areas of connectivity and data visualization. However, the study finds that as organizations see increasing benefits they will expand their business objectives and move to more advanced implementations.
Some of the biggest – and initial – business objectives and return on investments (ROIs) include improved device management, increased production volume and lower operating costs.
The survey of 300 senior-level, experienced IIoT decision-makers and influencers in manufacturing, transportation and oil & gas industries indicates that most of the IIoT investments are focused on connectivity (78 percent) and data visualization (83 percent). Although 86 percent of industrial organizations said they have adopted IoT, less than half (48%) are deploying advanced analytics and only about a quarter (28%) are automating the application of insights derived from analytics, according to Bsquare’s first annual IIoT Maturity Study.
FIVE STAGES OF ADOPTION
1) Device Connectivity – on-board logic to collect data and transmit to cloud databases
2) Data Monitoring – dashboard and visualization tools to monitor real-time data
3) Data Analytics – machine learning and complex analytics used to develop device models and insight
4) Automation – development and execution of logic rules that automate business activities and device configuration
5) Edge Computing – distribution of analytics and orchestration to the device level.
Even at the early stages, 84 percent of those organizations said these solutions are very or extremely effective and 95 percent believe IoT has a significant or tremendous impact on their industry. Less than two percent are not considering implementation during the next 12 months.
The ROI opportunities are huge. Gartner Inc. forecasts 8.4 billion connected things in 2017, and reaching 20.4 billion by 2020. Businesses, alone, are expected to use 3.1 billion connected things in 2017.
Only 54 percent of the devices deployed at the adopter organizations are IIoT-enabled, which means there is still a big opportunity for growth, said Bsquare.
“The survey results validate that IIoT adoption is a maturity progression where companies realize increasing levels of benefit as they expand from basic machine connectivity to advanced approaches including analytics, automation, and edge computing,” said Bsquare.
At industrial companies, the biggest challenges that IoT addresses are device health (90%), logistics (67%), operating cost reduction (24%) and increasing production volume and better compliance (18%).
However, as organizations see more benefits and as investments increase, adopters will focus on other business priorities such as automation and real-time monitoring.
Seventy-three percent of adopters said they will increase their investment over the next 12 months, despite acknowledging the complexity of IoT deployments. Transportation and manufacturing organizations are expected to take the lead ahead of oil & gas companies.
Industrial organizations are primarily using IoT for device connectivity and data forwarding (78%), real-time monitoring (56 percent), and advanced data analytics (48%). But some are also deploying IoT for more mature uses such as automation and enhanced on-board intelligence.
“Our study shows that while industrial organizations have enthusiastically adopted IIoT, a majority have not yet moved to more advanced analytics-driven orchestration of data insights,” said Kevin Walsh, vice president of marketing at Bsquare, in a statement. “These later stages of IIoT maturity—analytics, orchestration and true edge computing—tend to be where most of the ROI is realized. This is especially important because, according to our study, the number one reason cited for IIoT adoption is cost reduction.”
Bsquare’s segments IIoT maturity into five stages – device connectivity, data monitoring, data analytics, automation and edge computing. “Each phase typically builds on the previous one, allowing organizations to drive maximum value as they progress through the index,” said Bsquare.
Cloud or on-premise? More than half of the organizations are using annual subscription models for their IIoT solutions, said Bsquare, and 77 percent use a cloud-based model with Amazon Web Services (AWS) and Microsoft Azure tied (14 percent) as the preferred cloud service provider.
Cloud-connected systems are becoming a critical part of IoT deployment and many leading electronic component firms are also collaborating with cloud service providers like AWS. These include Microchip, NXP, and STMicroelectronics, which all recently announced new and expanded collaboration with AWS to support cloud-connected embedded systems.
AWS recently launched a dedicated IoT analytics service. This is in addition to Amazon FreeRTOS and AWS Greengrass, which are also being leveraged by design and developer communities.