- August 15, 2018
IoT Industry Doubling | Recruiting Clues In Expanding Market
Both the Internet of Things (IoT) industry and recruiting are growing by leaps and bounds causing personnel shortages in the existing marketplace. Constantly recruiting for future needs and addressing barriers to adoption are two keys to ultimate success. To make gains, IoT leaders must address three universal themes.
IoT Market to Double by 2021
Bain & Company expects the combined markets for IoT to grow to $520 billion by 2021. This includes hardware, software, systems integration, data and telecom services. That figure is more than double the $235 billion spent in 2017 with the majority projected to be captured by enterprise and industrial segments.
Bain & Company’s latest report, Unlocking Opportunities in the Internet of Things, includes results from a 2018 survey of more than 600 executives. The report found enterprise customers still remain bullish on IoT.
The customers are still running more proofs of concept than they were two years ago. Additionally, more customers are considering exploring new use cases: 60 percent in 2018 compared with fewer than 40 percent in 2016.
Engineering Shortage Further Constrained by IoT Growth
The growth of IoT will further expand current shortage of engineers, scientists and key technical talent. This is on top of an already limited supply of engineering, scientific, IT (information technology), R&D (research and development), technical and manufacturing technology talent as I shared on a radio appearance on WBBM News Radio 780, a CBS Radio affiliate.
Be Constantly Recruiting
During this media appearance I cited a need for a more aggressive, pro-active recruiting approach due to our current 'War for Talent'. As a result, I have prepared my 12 Commandments of Recruiting to assist you.
In particular my 8th Commandment of Recruiting counsels you to not wait for a job opening but to constantly seek out talent. Attend trade shows and industry events to build your staffing network are examples. Adding an internal or external recruiter to uncover and evaluate key staffing prospects are other means.
Then keep in touch with this talent and build a potential employee database. Then when you have a job opening these recruits may be available to meet your staffing needs. Remember to constantly recruit.
Many Potential IoT Recruiters Worried About Adoption
Unfortunately, many enterprise customers say they are tempering their expectations about the pace of IoT adoption. They realize that complete solutions may take longer to implement to yield the expected return.
In response, while they would like to go faster, they are planning less extensive IoT implementations by 2020 than they had planned just two years ago.
IoT vendors seeking to tap into this pent-up demand must better address barriers to adoption. They must provide more consumable solutions and ease concerns about integration with existing information technology and operational systems.
Along with analytics and infrastructure software vendors, cloud service providers (CSPs), particularly Amazon Web Services (AWS) and Microsoft Azure, have emerged as more prominent and influential vendors in the space.
CSPs are lowering barriers to IoT adoption. They are allowing for simpler implementations and making it easier to adopt selected use cases and scale up quickly. They are also leveraging their deep expertise in analytics to expand across IoT battlegrounds and to fortify their positions in the analytics and cloud battleground for enterprise and industrial customers.
However, their broad horizontal services provide little optimization for industry-specific applications. This is leaving a significant opportunity for industry solutions from systems integrators, application developers, industry IoT platform specialists, device makers and telcos. This pent-up demand represents a huge opportunity for technology providers that can meet customer needs.
“Our survey found that vendors are aligned with customers’ concerns about some barriers, such as security, returns on investment, but less so on others – notably integration, interoperability and data portability,” according to Ann Bosche, a partner in Bain & Company’s global Technology Practice and an IoT expert.“Based on our experience with previous technology cycles, the key to addressing these concerns lies in focusing on fewer industries in order to learn what customers really want and need to ease adoption.”
Barriers to IoT Adoption
Since Bain & Company’s last extensive survey in 2016 on IoT and analytics, customers believe that vendors have made little progress on lowering the three most significant barriers to IoT adoption:
• Security. Recent Bain & Company research finds that enterprise customers would buy more IoT devices and pay more (about +22% on average) for them if their security concerns were addressed.
• Integration with existing technology. Vendors have not made it easy for customers to integrate their IoT solutions into business processes or information technology and operational systems. They may thus be underestimating their customers’ concerns. Vendors will be able to offer more complete end-to-end solutions if they invest in learning more about typical implementation challenges in their customers’ industries.
• Uncertain returns on investment rounds out the top three concerns among survey respondents. This is primarily due to the heavy investment required to stand up each solution given the amount of customization currently required.
Three Universal Themes for IoT Vendors
Bain & Company has identified three universal themes necessary for IoT leaders to continue to make gains:
• 1. Focus on getting a few industries and use cases right. Industry pre-customization and better “out of the box” packaging are emerging as keys for success. More than 80% of vendors still target four to six industries—too many to build depth in any particular use case rapidly.
Leading vendors are targeting their solutions to fewer industries than before, focusing on two or three domains. This allows vendors to incorporate significant industry expertise, providing a competitive edge against more generic offers.
• 2. Offer end-to-end solutions to ease adoption. Many IoT deployments require customization, usually based on industry application. More than 60 percent of customers say the solutions they buy are more than 25 percent customized.
As vendors develop cost-effective, well integrated, end-to-end packages with their own producers and partners they gain experience implementing IoT solutions for specific use cases. This is something for which buyers have been clamoring.
• 3. Prepare to scale by removing barriers to adoption. Leading IoT vendors address their customers’ concerns – security, integration and returns on investment – by baking them into well integrated and use-case specific solutions. This enables them to deliver cost-effective IoT solutions that can scale.
“The next few years will be critical to the development of IoT markets as leaders continue to make gains and expand their industry-specific offers,” said Michael Schallehn, a partner in Bain & Company’s global Technology Practice and an IoT expert.
“Incumbents that fail to move quickly enough to address customers’ needs are likely to get leapfrogged by more nimble competitors. We think device makers, in particular, run the risk of seeing software and analytics competitors capture the value of solutions, leaving them to deliver lower-profitability hardware components.”
Internet of Things was first coined by Kevin Ashton, a British technology pioneer. Ashton cofounded the Auto-ID Center at the Massachusetts Institute of Technology (MIT), which created a global standard system for RFID and other sensors He first used the term IoT to describe a system where the Internet is connected to the physical world via ubiquitous sensors.