Aussie SMBs set to take advantage of IoT boom

The Internet of Things (IoT) is exploding, and Australian SMBs believe they are in a good position to capitalise on this trend.

Gartner projects that next year there will be 4.9 billion connected devices in use worldwide, and this figure will surge to 25 billion by 2020.

The IoT will support total services spending of around US$69.5 billion in 2015 and US$263 billion by 2020, Gartner said.

The consumer sector is expected to drive IoT adoption, with an expected 2.87 billion devices in operation in 2015 and 13.17 billion by 2020. But enterprises should account for the majority of revenue.

Gartner expects manufacturing, utilities and transportation to be the top three verticals using IoT in 2015, with a combined 736 million connected things in use. But the utilities sector is expected to take the top spot by 2020, followed by manufacturing and government.

“The digital shift instigated by the Nexus of Forces (cloud, mobile, social and information), and boosted by IoT, threatens many existing businesses. They have no choice but to pursue IoT, like they’ve done with the consumerisation of IT,” Gartner VP Jim Tully said.

The ability to add digital sensing, computing and communications capabilities to any device has allowed for the reinvention of ordinary objects, changing their value proposition, Gartner said. It is likely that in the next few years, some level of intelligence or connectivity will be regarded as standard for many categories of mainstream products and services.

“However, CIOs must understand that the most disruptive impact and competitive threats - and, equally, the greatest competitive opportunities - arise not from simply digitalising a product or service, but from creating a new business model and value proposition,” Gartner VP Steve Prentice said.

“Organisations must straddle the tension of all the information available from smart things by balancing their desire to collect and analyse it with the risk of its loss or misuse.”

A survey from AVG meanwhile shows that Australian small and medium businesses are eager to take advantage of the new opportunities afforded by IoT.

The survey shows that 59% of Australian SMBs think the IoT will help them improve revenues, and 62% have at least some budget specifically assigned to the development of IoT solutions over the next 12 months.

Around 84% of SMBs have purchased mobile devices within the last year, spending an average of $6800. These respondents also reported spending an average of $6000 in hidden costs such as security and data recovery per year.

Despite the pent-up demand, just 18% of SMBs believe their partners are ahead of the curve regarding IoT management. Further, 68% of SMBs with an IT provider feel their partner can improve their service.

On the provider side, 70% of managed service providers (MSPs) agree that they must adapt their services to meet customer expectations, and more than half (55%) state that their customers are demanding IoT-related services.

But only 29% of Australian MSPs had already reviewed their service or product portfolios due to the rise of the IoT, below the average of 53% across the five markets covered - Australia, the US, Canada, the UK and Germany.

“The study clearly shows that as businesses grow to rely more and more on IoT and cloud-based services to help generate revenue, most MSPs are still some way short of being ready to help customers manage this,” AVG Technologies Australia Security Advisor Michael McKinnon said.

In an indication of the challenges posed by the technology, more than seven in 10 respondents expect the rise of the IoT to require their organisations to take extra steps to secure their data.

This aligns with a Gartner prediction that by the end of 2017, over 20% of organisations worldwide will have digital security services devoted to protecting business initiatives using IoT devices and services.

Image courtesy of Marcus Brown under CC