The study on IoT launched by Tata Consultancy Services (TCS), surveyed 795 executives from large multi-nationals.
The study stated that company executives still see the IoT as a growing area for businesses, with 12% identifying a planned spend of $100 million in 2015 and 3% looking to invest a minimum of $1billion among the 795 companies surveyed.
The report also shows that companies predict their IoT budgets to continue increasing year-on-year, with spending expected to grow by 20% by 2018 to $103 million.
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“The age of IoT is well underway. The question is, whether businesses are ready to realize the full potential of this technology. Our latest global trend study found that leaders in using IoT technologies are using it to completely re-imagine their businesses by changing every aspect of them from business models and products to business processes and workplaces,” said Natarajan Chandrasekaran, CEO and MD of TCS.
Companies at the very forefront of this drive for innovation through IoT have seen the biggest benefits from their investments. The top eight% of respondents, based on ROI from IoT, report a staggering 64% average revenue gain in 2014 as a direct result of these investments.
Currently the biggest business impact is that companies can offer their customers more bespoke products and services, yet by 2020 this will convert from marketing functions to increased sales, through adding considerable value to the customer.
Despite the encouraging data on IoT investment and its impact on revenue growth, the report also revealed that major challenges remain in realising the promise of IoT for businesses across all sectors.
The Healthcare sector has been hailed as having the greatest potential to benefit from the IoT, but remains one of the most underdeveloped industries due to regulatory restrictions and data security concerns that currently hinder innovation.
The sector plans to spend just 0.3% of revenue in 2015, but will be increasing this investment by at least 30% by 2018. The healthcare market driven by the IoT is predicted to be worth $117 billion by 2020.
In contrast, executives in the Industrial Manufacturing sector are reporting the largest increase in revenue from IoT, with an average 28.5%, followed by financial services (17.7%) and media & entertainment (17.4%). The automotive industry has the lowest revenue gain with just a 9.9% increase.
The report, which looks at trends across 13 key industries, found that large-scale investment in IoT infrastructure and monitoring is not confined to those in Manufacturing, however, with the Travel, Transportation and Hospitality sectors planning to spend 0.6% of revenue this year.
Media and Entertainment companies will spend 0.57% of their revenue on IoT in this year – significantly more than the 0.4% average and the 0.44% spend in Banking and Financial Services.