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Increasing appetite for IoT globally, so what's holding back market maturity in the US?

Written by Nick Earle, CEO, Eseye

COVID-19 delivered a sizeable blow in slowing commercial IoT investment and adoption in the US over the past twelve months, with over one third (36%) of USA organizations decreasing their investment plans in IoT and 33% cancelling their IoT initiative altogether.

In isolation, these figures might cast a shadow around future IoT success. But globally there continues to be considerable innovation and growth in IoT technologies, devices, applications and services.

In fact, COVID-19 accelerated many of the key IoT adoption trends that were already underway, driving IoT further into the global cultural and commercial mainstream. Many businesses continue to prioritize acceleration through digital transformation and to scope new pastures in business development through fresh IoT initiatives that deliver increased profitability and new markets. Both consumers and business are now increasingly moving towards connected, data-driven digital services and experiences, and, not surprisingly, 2020 saw a noticeable shift in the types of business adopting IoT to offer a more diverse choice of products and services.

Today, large enterprises have moved from experimenting to understanding how to deploy IoT across their operations, integrating it into their global product lines, in a way that delivers real value to their consumers and the bottom line. In line with these global IoT adoption patterns, the vast majority of US businesses continue to see IoT as a priority, with 86% planning to increase investment and 46% planning to boost spending by between 51 and 100%.

In a recent McKinsey Global Institute report, IoT is anticipated to have an economic effect of somewhere between $4 and $11 trillion on the worldwide economy by 2025, across healthcare, retail, and the smart home. According to the Consumer Technology Association (CTA) study, 83 million households and approximately 22 million homes today own more than one smart home product and the United States Home IoT devices market is predicted to grow with a double-digit CAGR of 19.83% from 2020 to 2026.

Therefore, with demand for all things ‘smart' now at an all-time high, what are the factors that might be holding back US IoT market maturity?

eSIM Connectivity for Future Growth

Historically, US deployments have tended to be domestic, rather than international and today US organizations remain cautious around initiating large-scale global IoT projects and deployments. Here, the adoption of eSIM will be critical to fueling future growth in the market, but cellular-connected IoT deployments have still not reached anywhere near critical mass.

In fact, most US businesses have today deployed fewer than 10,000 devices, calling into question whether projects are truly delivering against expectations and reaching their full potential.

The ongoing MNO connectivity restrictions around ‘permanent roaming' is a significant limiting factor that is continuing to impede progress. Uncertainty about both initial and lifetime device connectivity is a huge concern for US businesses rolling out large-scale IoT projects which are expensive to scope and maintain, and the level of investment needed is harder to justify in commercial terms when the connectivity environment is not assured.

Whilst the technology landscape continues to change, with the sunsetting of specific cellular bands such as 2G and 3G, and the emergence of 5G services, for example, maintaining connectivity across multiple geographies will remain a major challenge. This will pose unacceptable levels of uncertainty and risk around initial and lifetime device connectivity that many businesses utilizing IoT are not equipped to weather.

But as many US organizations are starting to pinpoint device management, certification and contracts, as key pain points in IoT projects, perhaps these concerns now signal that many are now ready to move towards embracing larger scale global IoT deployments?  

Technology Drivers and Challenges

In our recent research report looking at current global IoT adoption, challenges around security and device onboarding (i.e., device set up, configuration and design) testing and certification, were highlighted as key factors that are impeding progress for many US organizations. Security was noted as the main concern amongst the challenges cited, both now and in the future, which would point to the need to adopt more of an embedded approach to security in IoT device design, as well as more advanced connectivity services that utilize private networks, encryption and offer extended security monitoring and remediation features.

Some of the top cyber security challenges in IoT include device operating system patching, improper encryption mechanisms, device default factory settings, device shadow, device event logging, distributed denial of service (DDoS) attacks, among many others.

Looking to the Future

US respondents are choosing to harness IoT for innovation; to break into new geographies and conduct market research with new products. As US-based enterprise organizations deploy IoT globally, intelligent eSIM connectivity will become a vital to overcome permanent roaming, other multi-region cellular connectivity and technology to future proof against challenges.  

The future growth of the US IoT market now lies in guaranteeing global connectivity for commercial IoT devices without compromise and regardless of where they are deployed.

New technology platforms such as multi-IMSI eSIM (eUICC) are enabling advanced multiple profile (or network) management that is completely agnostic and can flexibly switch between multiple operators. This significantly improves device uptime and service quality.

This enables more comprehensive, reliable connectivity for the global IoT ecosystem, across a greater number of territories, than any other provider can deliver, as well as eliminating the cost and risk of devices being disconnected.

Uncertainty about both initial and lifetime device connectivity is a huge concern for US businesses rolling out large-scale IoT projects. It is now time for IoT vendors and the global MNO community to simplify the IoT ecosystem and work together to enable IoT to achieve its full potential.

If you are interested in reading more about the research, download the full State of IoT Adoption report here:  https://bit.ly/3fv3vfF.

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ABOUT THE AUTHOR

Nick Earle 

Nick Earle has over 30 years leadership experience spanning large corporations and dynamic start-ups. Previously, Nick led organizations and cross-company transformation programs for two $50B global corporations; Cisco where he ran the Cloud and Managed Services business as well as their Worldwide Field Services function, and Hewlett Packard where he ran the global Enterprise Marketing function and the internet transformation strategy.

Published Monday, August 09, 2021 7:35 AM by David Marshall
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