IoT spending is a mixed picture in 2020
Budget constraints have long been one of the chief barriers to Internet of Things (IoT) technology adoption, along with staffing and security concerns.
But while more than half (52%) of the respondents to the 2020 IoT Adoption Survey cited either budget hurdles or high technology costs as challenges, other data suggests a more complicated picture.
Headwinds and Tailwinds
One silver lining to the COVID-19 crisis is IoT vendors’ willingness to give discounts or provide more features at the same price. Fifty-nine percent of respondents reported receiving such perks. Additionally, most IoT implementers are upbeat about the prospects of budgets dedicated to IoT technology in 2020 and 2021. Some 41% expect budgets to increase this year, while 51% anticipate they will next year. Only 14% and 8% believe IoT budgets will decline in 2020 and 2021, respectively.
In the negative column, however, two-thirds of respondents reported that the pandemic constrained or stalled funding for IoT projects. At the same time, COVID-19 drove budget increases. For organizations with IoT budget changes, 50% reported that COVID-19 heightened the need for digital initiatives, including IoT.
There was a surge in IoT interest as COVID-19 swept across the world, said Chander Damodaran, chief architect at Brillio, a consultancy. That trend was especially true for industries relatively insulated in sectors such as the consumer packaged goods, logistics, utilities, health care and technology industries, Damodaran said. IoT spending increases tend to be most concentrated in such sectors.
IoT spending increases are more rare in hard-hit sectors such as the hospitality, travel and oil-and-gas industries. Many oil-and-gas companies, for instance, would like to invest in technology as a service, according to Alex West, senior principal analyst at Omdia. “Ideally, they wouldn’t pay upfront for all of the control systems. They would outsource it to a vendor,” he said.
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