The Opportunity in the Internet of Things

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1 The Opportunity in the Internet of Things In a new survey of senior business leaders commissioned by Flextronics, there is clear interest in and excitement around the potential of the Internet of Things. Many hold a strong belief that a well-thought-out and implemented IoT strategy will be crucial in order for companies to thrive in the coming years. However, while senior business leaders recognize the importance of investing in IoT development and making IoT a strategic priority, their companies are not adequately preparing to take advantage of these new developments. Respondents argue that businesses who prioritize IoT are more likely to succeed, be perceived as innovative, and be positioned to take advantage of new markets. Most business leaders have heard of the IoT... but less than 1/3 (29%) are experts have heard term: IoT have expert knowledge of term: IoT have no knowledge of term: IoT Today, more than three in four (76%) are familiar with the term Internet of Things. However, the depth of awareness is shallow. Among those familiar with IoT, just 29% consider themselves an expert on the topic but 8 in 10 (80%) report that they want to learn more about it. 1

2 Proportion of IoT Products Made By Companies Importance of IoT Compared to Other Technology Innovations Expect more products to include IoT technology. Business leaders nearly universally consider IoT to be particularly important. Business leaders surveyed estimate 42% of the products their respective companies produce contain IoT embedded technology. In just two years, these leaders predict that half (50%) of all their products will contain IoT technology. And, in five years, they expect even larger growth with an average estimate of 66% of their company s products containing IoT technology. Just 5% consider IoT not to be important compared to other tech innovations, while 59% consider it very important compared to other technological innovations. Furthermore, 7% consider IoT to be the most important innovation in technology. 2

3 Importance of IoT to a Company s Success Company High Prioritization of IoT Almost nine in 10 (86% * ) of business leaders view IoT as key to a company s success. Despite myriad factors that can influence growth, 39% say IoT will be very important to a company s success in the future, and another 48% state that IoT will be somewhat important to success. Just 13% describe IoT as unimportant to future success (7% somewhat unimportant, 6% very unimportant). Despite labeling IoT as vital to success, the majority report that an IoT strategy is not a high priority in their company today. Two thirds (66%) of business leaders believe an IoT strategy should be a high priority, but just 44% report that is the case at their company, a significant gap between what they recommend and what is happening. *Due to rounding, the total is 86% 3

4 Importance of IoT by Industry HEALTH CARE NETWORKING & COMMUNICATIONS CONSUMER TRANSPORTATION About nine in 10 say that IoT will be important for success in Health Care (91%), Networking and Communications (90%), Consumer Products (89%), Transportation (89%), and Energy (86%). Importantly, Health Care stands out as an industry where applications show great potential and where IoT integration is critical. More than nine in 10 (91%) say IoT will be important to future success within the health care industry, with 62% giving it the highest level of importance. And further, 34% argue that Health Care is the industry with the most to gain from the Internet of Things, followed by Consumer Products at 22%, Energy at 11%, and Industrial at 10%. ENERGY Four Industries That Have the Most to Gain from IoT HEALTH CARE CONSUMER ENERGY INDUSTRIAL 4

5 Traits of Companies Leading the IoT When asked in an open-ended question which company first comes to mind as a leader in IoT, these were the consumer brands that business leaders most frequently cited. 16% Constantly innovating and pushing the envelope Simple, clean solutions Seamless integration between products Customer focus versus focus on tech More results of this survey, including the top barriers and solutions to adoption of IoT, attributes of companies successfully engaging with IoT, and more industry-specific data will be released in the next issue of INTELLIGENCE and on theintelligenceofthings.com. About the Research The survey was commissioned by Flextronics and conducted online by Edelman Berland, an independent global market research firm, between December 18, 2014, and January 7, The survey included 348 Senior Business Leaders who had heard of the term Internet of Things and has a margin of error of ±5.3%. Respondents represent a wide range of industries and products and serve as leaders at companies that are Flextronics customers or associates. Always innovating 14% Diverse product array They re at the forefront, doing the R&D and trying things 14% Networking and security expertise Advertising and ubiquity Their position in Internet solutions and being able to provide hardware, software, service, and turnkey solutions 12% Market awareness Demystifying the technology for end consumers; making IoT tech appealing First to market with a very usable product for a broad spectrum of consumers Took a technology that hasn t changed for decades and significantly increased the utility by adding smarts and Internet connectivity into it 2015 Flextronics International LTD Flextronics and the Flextronics logo are trademarks of Flextronics International Ltd. 5