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Summary

The execution aspect of enterprise Internet of Things (IoT) initiatives would be well served by taking a "start small, grow big" approach. Cloud-based IoT platforms can fit the bill for pilot projects while allowing a certain degree of experimentation without any major investment proposition. Successful pilot projects are "quick wins" that can be used by interested business and IT leaders to correlate outcomes with potential business benefits to develop a good business case for investment.

IoT pilot projects can help clear the uncertainty around potential benefits

Cloud-based IoT platforms vary greatly in terms of core features and capabilities, and no offering can currently be dubbed as a complete IoT solution. Although it is true that IoT has the potential to drive growth via new revenue/business and engagement models, it is not so easy to justify and secure funding for associated initiatives. There is not much data available for developing a solid business case that specifies direct and tangible business benefits of IoT initiatives. Moreover, business leaders are not conversant with associated revenue/business models, and have apprehensions about the practicalities involved in realizing value from IoT initiatives of reasonable scale/complexity.

A lot depends on an enterprise's appetite for experimentation and its inclination to drive revenue and positive business outcomes via the adoption of new technologies. However, enterprises conversant with digital business models are likely to be more open when it comes to understanding the potential benefits of IoT.

Cloud-based IoT platforms offer a good opportunity to experiment without any major investment proposition. Ovum analyzed the subscription charges for cloud-based IoT platforms and other investment propositions and found that the typical investment for an IoT pilot project would lie in the range of $200–$500k. This figure will vary depending on the type(s) of IoT devices involved, the need for mediation with legacy protocols and/or new adaptors for M2M integration, and the extent to which existing infrastructure can be reused.

Likewise, an IoT pilot project can take from few weeks to months to deliver substantial results, which can be used to justify investment in broader IoT initiatives. It is also worth noting that proof-of-concept (POC) evaluations proposed by IoT platform vendors do not necessarily provide good indications about the overall complexity of and investment proposition for an enterprise IoT initiative. Although some IoT platform vendors can complete POC in a week, with an investment of $30-$50k, others offer a more systematic approach involving architecture planning and risk analysis, which can take up to a couple of months to complete.

Interested IT and business leaders can use pilot projects to correlate outcomes with potential business benefits. Of course, good soft skills are required to internally sell IoT as a means to improve competitive positioning and/or realize significant business benefits. Cloud-based IoT platforms offer several pre-built tools and resources that reduce the time, effort, and skill required for the development of new applications. Successful pilot projects are "quick wins" that can pave the way for broader enterprise IoT initiatives.

Appendix

Author

Saurabh Sharma, Senior Analyst, Software – Infrastructure Solutions

saurabh.sharma@ovum.com

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