Over Half of Major New Business Processes will Adopt IoT by 2020, According to Gartner

Businesses processes will incorporate more Internet of Things (IoT) technologies and services over the next four years as development and production costs continue to drop, according to Gartner. IoT devices will become more practical and affordable, but will still lack security, performance and integration capabilities.

Consequently, 75 percent of IoT projects are estimated to double their planning lifecycles through 2018 or face recall or redeployment because of various weaknesses.

“Product-centered enterprises will be the worst affected,” said Alfonso Velosa, research vice president at Gartner. “They will seek to launch smarter, connected products, although this will often be a reactive, tactical approach that seeks to address their competition’s IoT product. However, even for enterprises conducting internally centered projects that may focus on cost reductions, there will be people issues. Most of these issues will center on the normal introduction of a new technology model. It will be complicated by emerging business models that will require process and cultural change. Addressing both of these will lead to projects going over schedule.”

Gartner predicts an IoT black market exceeding $5 billion and dealing with fake sensors will exist by 2020. It also estimates security costs will also increase to 20 percent of annual security budgets, from less than 1 percent in 2015. As IoT devices generate more data, organizations and companies will have to factor in privacy implications and start designing and implementing IoT architectures that respond to IoT growth and adoption.

“Major cybersecurity vendors and service providers are already delivering roadmaps and architecture of IoT security, in anticipation of market opportunity,” said Earl Perkins, research vice president at Gartner. “Small startups delivering niche IoT security in areas such as network segmentation, device-to-device authentication and simple data encryption are offering first-generation products and services, including cloud-based solutions where applicable. Large security vendors have already begun acquiring some of these IoT startups to support their early roadmaps and fill niches in their portfolios.”

Garner believes these implications will trigger new business opportunities while the IoT segment will mature and become integrated with business processes and systems.