IoT growth set to come from managed data analytics

Caution among IT buyers has resulted in CompTIA’s (Computing Technology Industry Association) latest projection for growth in the global IT industry varying between 1.9% and 5.4%.

It forecast internet of things (IoT) and artificial intelligence (AI) as the biggest areas of growth for the IT industry, as IT decision-makers in organisations expand the use of these emerging technologies deeper into their businesses.

“This is a narrower forecast range than we’ve seen in past years, suggesting industry executives are exercising a relatively high degree of caution in an unpredictable environment,” said Seth Robinson, senior director, industry analysis at CompTIA.

According to CompTIA’s end-user data, there is a very slow technology adoption curve across various new trends, with only IoT and AI reaching critical mass. “Even amid all the hype, companies in the business of technology are starting to pull back on adopting new technology as part of their portfolio,” CompTIA noted in its IT industry outlook 2020 report.

“This slight tap on the brakes suggests that classic situation where companies move too quickly into a new technology discipline or business model, only to have a reality check in year two or three.”

CompTIA’s research also found that small and medium-sized businesses are struggling to integrate the various platforms, applications and data they need. While large businesses are able to use internal resources for integration, CompTIA noted that companies of all sizes may outsource to third parties for integration activities, especially where deep knowledge is needed for a particular platform or application.

“Whether integration is outsourced or being done in-house, the next step for many businesses will be automation,” the report noted. “Automation has always been one goal of enterprise technology, but today’s capabilities open new doors.”

CompTIA believes AI and automation will be used in IoT applications to help organisations drive actions based on inputs from internet-connected sensors. It predicted that future automation will be highly complex, and the nature of AI will necessitate some degree of monitoring, which will make such projects expensive.

“As with all strategic IT, businesses will need to see clear return on investment calculations and long-term improvement plans before venturing deeper into automation,” said the report.

CompTIA’s research also found that tech firms that are selling and supporting IoT products and services are showing positive returns, with half of these firms reporting either major or minor levels of IoT-related sales in the past year. The report expected revenue for these firms to shift from managed IoT services towards data services as customers look to derive value from IoT data.

“Today, IoT as a managed services play is driving the most revenue in this category, but looking ahead to the next two years, companies are predicting that analytics on data captured by IoT sensors, then shared with customers, holds the most financial promise,” said the report.

Rather than considering IoT installations as separate projects, CompTIA suggested that organisations will have to recognise that they are dealing with an expanded architecture that will dictate networking structures, storage options, data policies and security decisions.