Top 10 Reasons People Aren’t Embracing the IoT

Because there is so much hype surrounding the IoT, many enterprises are still waiting to see how the technology evolves before adopting the technologies themselves.

Brian Buntz

April 20, 2016

11 Min Read
Embracing the IoT is similar to hugging a cactus.
Businessman offering a cactusThinkstock

No mistake about it—the IoT is moving full steam ahead. Gartner predicts that 25 billion “things” will be connected to the IoT by 2020. Both Cisco and McKinsey Global Institute predict that the IoT will generate more than $10 trillion in the coming decade—with Cisco predicting the market could be worth $14.4 trillion by 2025. While the smartphone market was the quickest business to hit the trillion-dollar-mark in history, the IoT space is by definition much larger in scope and is growing at an almost unthinkable clip—a report released earlier this year predicts that the IoT market will have a 43% CAGR through 2019.

Still, the IoT poses unique difficulties for potential users as echoed in a recent Penton survey. Participants across a range of industries provided feedback on the biggest hurdles to IoT adoption within their organization. Respondents, who were allowed to vote for multiple topics noted that they were concerned about everything from data privacy to the simple lack of knowledge regarding the technology.

Below, we summarize the top ten concerns of the survey respondents:

1. Data privacy concerns: 40% of participants

In the post-Snowden era, data privacy remains a potential concern for the IoT. And because IoT devices can potentially harvest enormous amounts of data, security breaches can be especially dangerous.

Last year, an appeals court ruled that the FTC can sue companies found to have lax security.

More data privacy legislation could be coming as nations across the globe create new laws to keep up with connected technologies at large. According to Deloitte, there were only about 20 privacy laws globally in the 1990s. Now, there are more than 100.

The good news is that there are already a number of trusted vendors who can help mitigate the risk of security problems along with proven technologies like end-to-end encryption and token-based authentication that are suited for IoT applications.

2. Security concerns: 40% of participants

The Internet has always been chaotic, but the Internet of Things only increases the potential for havoc. Companies designing industrial IoT applications can face significant challenges because many industrial devices were historically designed to be secured by isolation. Making these systems talk to external networks—securely—can be a tricky proposition.

Because of the sheer scope of the IoT industry, there is a risk of a Wild West–like atmosphere for companies that rush products to market without thoroughly weighing security concerns. It is alarming that in the consumer space, there are cases of connected refrigerators and even the Hello Barbie doll being hacked. Perhaps more troubling was a report of two automotive hackers who took control over a jeep going down the highway at 70 miles per hour.

While software security gets a lot of attention, embedded security is also an important consideration for the IoT. “It is necessary to secure the Things themselves,” says Alan Grau, president and co-founder of Icon Labs (West Des Moines, IA). “Most of the people don’t realize that the actual device could be hijacked.” Grau points to a cyberattack that caused massive damage to a German steel mill in 2014 as a notable example.

Furthermore, the Stuxnet virus has already demonstrated the danger that software can pose to industrial equipment. The worm had succeeded in physically damaging computers controlling Iran's nuclear centrifuges.

On a brighter note, there are already a lot of security tools available that are suited for IoT applications, says Jason Shepherd, Director of IoT Strategy and Partnerships, Dell. “You can work with credible people who have been dealing with security for a long time,” he says.

Grau stresses the importance of being proactive about building security into the device itself. “The main point is for companies to realize that there is a solution out there. When they are ready to solve this problem, they don’t have to do everything from scratch. There are technologies out there that can protect the device itself. ”

3. High cost of implementation: 38% of participants

Implementing the IoT can be expensive. Many companies have relied on the approach of designing IoT devices with a centralized cloud-based business model. This method can lead to years or even decades of expense without revenue.

“Sometimes with the cloud, you are paying to ship data to yourself that you never use,” says Jason Shepherd, Director of IoT Strategy and Partnerships, Dell. “ We have seen some people that were talking all about the cloud a year ago realize how expensive it is.”

Dell believes that the philosophy of edge computing can help enterprises save money. “There are some interesting ways of distributing data where you can still protect it but where you aren’t paying to move it around until you need it,” Shepherd says. “Ultimately, companies have a choice of where they keep their data.”

4. Not enough knowledge about available solutions: 38% of participants

As is the case with any new technologies, many people interested in the technology tend to sit on the sidelines to observe how the new technology is used in the real world. One key reason for that is that many of the technologies are simply so new that implementing them can be challenging and time-consuming.

There is already tremendous competition in the IoT field, and the growing numbers of companies active in the space are already beginning to promote their IoT-related products and services. While the number of new technologies already available could make anyone’s head spin, the field will likely contract in the next few years, making it steadily easier to learn about technological options.

5. Inadequate infrastructure: 33% of participants

A growing number of companies are at work building out IoT infrastructure, including cloud providers like Amazon and Microsoft, mobile network providers like AT&T and Verizon, and the microprocessor company ARM, which has developed the ARM mbed end-to-end IoT solution.

The field is, however, is fragmented, and some companies are starting to advertise their ecosystem of partners. While companies like Google and Amazon continue to be rivals, companies like Dell, GE, Microsoft, OSlsoft, SAP, and Software AG are working together to help customers identify the mix of technologies they need in a less onerous way.. Also, ARM, through its ARM mbed IoT device initiative, has nearly 50 partners including IBM, Texas Instruments, and SalesForce.

6. Lack of standards: 29% of participants

The current state of interoperability standards is clearly a problem. And while part of the problem is that there are no universally agreed-upon standards, another hurdle is that there are so many IoT standards being developed that it will be difficult for a single standard to gain widespread acceptance. Examples of IoT-relevant standards include the Linux-backed AllJoyn, Intel’s Open Interconnect Consortium, IEEE P2413, and the ITU-T SG20 standard for smart cities.

UL recently debuted UL 2900 certification for IoT security. Recently, government officials in Japan and Germany announced that the two nations would establish an IoT standard for commercial and industrial applications. There is also the Thread IPv6-based standard that has details for networking, security, power use, and product compatibility.

WiFi pioneer CEO Cees Links, who is now the CEO of the fabless semiconductor company GreenPeak (Utrecht, the Netherlands), believes that until the industry has agreed-upon standards, a quick IoT roll out might be at risk. Good standards are already in place that govern wireless protocols like WiFi, Bluetooth, and ZigBee, he says. The fact that so many new standards are being developed can be its own challenge. “The sheer number of possible new standards initiatives can be confusing and is unnecessarily fragmenting the IoT industry,” he says.  

7. Interoperability concerns/legacy systems: 28% of participants

A related problem to the one described immediately above; it's hard to get devices to work together without common standards.

“There are a lot of siloes of connectivity,” says Jason Shepherd, Director of IoT Strategy and Partnerships, Dell. While progress is being made at standard bodies, companies in the industrial space don’t want to necessarily replace all of their equipment to accommodate the IoT. Shepherd says that a lot of enterprises are looking primarily for a stable and flexible connectivity stack that lets them “mix and match their sensors and backends depending on their preference.”

The sheer number of platforms available can be overwhelming, which can make it difficult for developers to find a foundational layer of baseline connectivity. A similar quandary exists when it comes to knowing which OS to pick. “We expect the playing field to consolidate over the next two to three years,” Shepherd says.

Shepherd says that interoperability in the IoT field is steadily getting better and adds that it is a good sign that there are so many new partnerships in the industry. “We are working on some efforts to further help customers like Open Fog, for example, which is all about stitching the fog layer together,” he says. “It is not like we are going to get to one standard any time soon, but we think there is a significant opportunity to drive consistency in how you aggregate standards and how you bridge different communication styles together with a single gateway.”

8. Uncertainty that the IoT will deliver the benefits promised: 27% of participants

For all of the promise of the IoT, big questions loom when it comes to actually making any money or achieving real benefits.. At present, a small number enterprises have deployed the technology. While understanding the benefits of things like predictive maintenance is simple to comprehend, engineering a way to accomplish that objective is not. That’s because an IoT system often is comprised of a plethora of tools, spanning security, a database management system, middleware, APIs, analytics, visualization tools, and so forth.

More than a decade ago, there was a buzz about how RFID technology would transform logistics. Fast-forward to the present, and while RFID has certainly evolved and found a growing number of applications, it has failed to live up to the past hype.

The IoT will likely follow a different trajectory as it has more widespread support than RFID did around the turn of the 21st century. And the potential implications of the IoT are much bigger in scope. While RFID technology won the support of Wal-Mart and the Pentagon, the IoT has much larger support, including companies ranging from Amazon to Cisco to SAAS.

Rather than just disrupting logistics, IoT developers envision that the technology is poised to reinvent products as services.

9. Current workflows not well defined: 26% of participants

Given the fact that the IoT market is relatively young, it is no wonder that it is difficult to establish clear workflows for product development. Most enterprises still don’t have much experience implementing IoT technologies, which can be challenging given the variability of the data that is often involved from sources ranging from an array of sensors.

Conversely, companies may be so experienced with current work processes that they experience difficulty in trying to document those processes for the IoT.

Implementing IoT devices can be particularly challenging in the industrial space, says Kristen Billhardt, Marketing Director – Internet of Things at Dell. “It is complex to connect things that have not been connected before and to do it in a way that is secure, at scale, and can keep up with the pace on the manufacturing floor.”

“The space is so fragmented right now—not only in terms of the types of protocols that are out there and general connectivity but also solution providers,” says Jason Shepherd, Director of IoT Strategy and Partnerships, Dell. “There are probably more than 300 end-to-end platforms available out there alone. The complexity can be paralyzing for end-users because they aren’t even sure where to start.”

While talking about workflows at large can be ambiguous, one of the biggest challenges appears to be understanding how data flows and how you integrate that data. We see data integration as being one of the most significant challenges with the IoT — being right up there with security,” Shepherd says. “Frankly, I think data integration is a bigger challenge than security because you need to get data flowing before you can even worry about securing it. And there are already a lot of security tools available that are suited for the IoT.”

Dell and other like-minded companies are working to help IoT developers cut through the complexity. For instance, Dell and its partners recently announced that they can develop use-case blueprints that reduce the amount of customization.

10. Technology is not mature: 24% of participants

Just under a quarter of survey participants believed that IoT technology is immature. Earlier this year, Gartner echoed that the immaturity of technologies and services was a “recurring theme in the IoT space” “Architecting for this immaturity and managing the risk it creates will be a key challenge for organizations exploiting the IoT,” Nick Jones, vice president and distinguished analyst at Gartner explained in a statement.

About the Author(s)

Brian Buntz

Brian is a veteran journalist with more than ten years’ experience covering an array of technologies including the Internet of Things, 3-D printing, and cybersecurity. Before coming to Penton and later Informa, he served as the editor-in-chief of UBM’s Qmed where he overhauled the brand’s news coverage and helped to grow the site’s traffic volume dramatically. He had previously held managing editor roles on the company’s medical device technology publications including European Medical Device Technology (EMDT) and Medical Device & Diagnostics Industry (MD+DI), and had served as editor-in-chief of Medical Product Manufacturing News (MPMN).

At UBM, Brian also worked closely with the company’s events group on speaker selection and direction and played an important role in cementing famed futurist Ray Kurzweil as a keynote speaker at the 2016 Medical Design & Manufacturing West event in Anaheim. An article of his was also prominently on, a website dedicated to Kurzweil’s ideas.

Multilingual, Brian has an M.A. degree in German from the University of Oklahoma.

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