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What are the factors slowing IoT adoption?

Excitement about the Internet of Things (IoT) and the potential it offers has seen a steady growth in IoT adoption. Statista reports that the number of connected devices has risen from 8.6 billion connected devices in 2019 up to 15.4 billion by 2023. Statista estimates that, by 2030, the world will have nearly 30 billion connected devices.

Indeed, McKinsey’s “The Internet of Things: Catching up to an accelerating opportunity” report estimates that the IoT could enable $5.5 trillion to $12.6 trillion in value globally by 2030. This is up from $1.6 trillion in 2020. 

However, the McKinsey estimates actually predict slower growth than the same author team estimated in an earlier research report in 2015. Why the slower growth? Is the vision of transforming our world into one of connected, intelligent devices still on track?

Where are we now in the IoT Hype Cycle?

The US-based research and advisory firm Gartner first introduced its Hype Cycle concept in 1995. According to Gartner, new technology goes through five phases in its lifecycle: Innovation Trigger, Peak of Inflated Expectations, Trough of Disillusionment, Slope of Enlightenment, and Plateau of Productivity.

It is fair to characterise that the period preceding the pandemic as one of inflated expectations. Subsequently, the IoT’s fall into the trough of disillusionment was probably exacerbated by the unusual conditions of lockdown: technology (with the exception of video conferencing tools) became less attractive as people sought out personal connections with people, old-fashioned but familiar activities and nature.

Now, as we slowly return to “business as usual”, it seems evident that IoT adoption is well on its way to ascending the slope of enlightenment. Our understanding of IoT and perception of its potential is more realistic. We have a better understanding of the challenges and how to address them.

What factors are slowing down IoT adoption?

Let’s consider some of the factors that slowed down the adoption of IoT solutions – and look at how businesses are overcoming these factors to ascend the slope of enlightenment.

Underperforming early projects spawned disillusionment

Early projects which didn’t deliver rapid return on investment (ROI) deter some organisations from pursuing other (more viable) opportunities. An IoT project involves more than connected a few extra devices to your Wi-Fi. There are data architecture, data governance, network infrastructure, cyber security and analytics capabilities to build too. 

Solution: Business cases and project plans for IoT projects need to reflect this reality. Identifying real-world use cases that have delivered convincing results and ROI and sharing these best-practice examples is key to continued adoption. There are now many successful applications. Benchmarking across industry to learn from the most successful help to ensure that project goals are both realistic and achievable.

Cyber security concerns make organisations wary

Unprotected peripherals, hardware with factory-setting passwords and operating systems that haven’t been updated all pose cyber-security risks. Adding anything to your network is adding a potential entry point. Too many organisations have learnt this the hard way, which adds to the trepidation felt about adding more devices to a network.

Solution: Cyber security needs to be thought about at the very start of an IoT project. The Biden administration’s new FCC Cyber Trust Mark will help to address this – making it easy for businesses and consumers to understand which IoT devices have cyber security built in. The mark will list essential information about each device, making it easier for everyone to understand and address any potential vulnerabilities. 

Additionally, organisations can deploy endpoint management solutions paired with regular network scans to identify and manage devices on their network. Cloud-based endpoint management solutions make this type of control accessible for every organisation.

Limited connectivity limits usefulness

Connectivity is everything when it comes to the IoT. In many of the use cases – especially in remote and industrial applications – a lack of coverage, limited bandwidth or inconsistent network coverage hamper attempts to successfully deploy IoT devices.

Solution: Connectivity continues to develop at pace. Fifth generation wireless (5G) has improved bandwidth, latency and coverage for many, making mobile communications a realistic solution in many use cases. Organisations can also explore different connectivity options, including radio, satellite communications and mesh networking.

In large-scale industrial sites where Wi-Fi coverage can be patchy, new mesh networking solutions are improving coverage. In this way, businesses can avoid blackspots in coverage. This opens up further possibilities for IoT deployment. 


A lack of data analytics expertise limits usefulness

The data produced by the IoT’s connected devices needs to be both used and useful. The UK has a huge skills gap when it comes to digital and data analytics expertise. Without the right people in place to make sense of the data generated, an IoT investment fails to deliver the value and returns expected of it. Recruiting these people can be difficult and expensive, making delivering value especially hard.

Solution: It remains important to invest in data analytics and digital skills. However, in the meantime, new AI solutions are being rolled out which can help to fill the shortfall. Microsoft Copilot, for example, can help users to use natural language queries to interrogate data in Excel – making the need to master tricky formulas a thing of the past.

Intuitive dashboards for data presentation, such as those enabled by Microsoft Power Platform and Power BI, also make reporting and data interrogation and presentation easier. With intuitive tools like these, businesses are able to leverage the value from the data they hold, including the data being generated by their IoT devices.


What can we do to improve IoT adoption rates?


We might, in 2024, be more realistic in our expectations of what a world of connected devices can deliver, but this new knowledge can be used to drive IoT adoption at a faster pace. 


To drive IoT adoption, we should:

  • Celebrate and promote successful use cases and ROI
  • Be realistic about the costs and complexity of IoT projects (especially when creating business cases and estimated ROI)
  • Raise awareness about the cyber security risks and invest in cyber security
  • Explore different connectivity options, including radio, satellite communications and mesh networking
  • Invest in digital, cyber security and data analytics skills


By proactively and intelligently investing in the IoT, we can ensure its adoption goes hand in hand with its usefulness and the value it delivers.

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