TORONTO, ONTARIO--(Marketwired - Jul 15, 2014) - The "Internet of Things" (IoT) presents a massive opportunity that Canadian businesses have yet to capitalize upon, according to a TELUS-commissioned IDC survey released today. The survey, which examined the current state of IoT deployments in Canada, found that only 6 per cent of Canadian businesses have implemented an IoT solution, and that another 7 per cent are preparing to deploy in 2014. The technology is on the cusp of rapid growth however, with an additional 30 per cent of businesses intending to deploy in the next 24 months and annual IoT spending in Canada predicted to grow from $5.6 billion in 2013 to $21 billion in 2018 - a 375 per cent increase.
IoT - the evolution of machine-to-machine (M2M) technology - is a network of uniquely identifiable end points (or things) that communicate without human interaction, most commonly over a wireless network. The systems collect, analyze and act on information in real time and are being deployed to create "smart" connected businesses, homes, cars and cities.
"The Internet of Things can fundamentally alter the way Canadian companies do business and we expect a sharp spike in growth as business leaders embrace the technology," said Jim Senko, senior vice-president of Small Business and Emerging Markets. "We're currently working with companies of all sizes to help them understand the potential of IoT and developing solutions that transform how they operate; making them more productive and profitable."
First-generation IoT technology is more common in the utilities and transportation sectors, where companies have operated basic applications like remote monitoring and fleet tracking for more than a decade. However, recent advancements in the reach and speed of wireless networks and technologies like cloud computing are fueling the growth of IoT and opening up its potential in other industries like manufacturing, oil and gas, healthcare, retail, financial services and insurance.
"We have customers across a wide range of industries using IoT. We are implementing applications in the financial services industry with wireless connectivity for ATMs, in the oil and gas industry with lone-worker safety solutions and remote monitoring of field equipment, and in retail with wireless point-of-sale devices and smart interactive digital displays," added Senko. "There's tremendous innovation in this area and I believe that the opportunities that IoT technology can offer businesses is limited only by the imagination."
IoT offers many benefits, but Canadian businesses have yet to tap into its full potential
An IoT solution can help a business quickly achieve greater productivity, reliability and quality of service, while reducing costs. The data collected can help automate processes and enable improved decision making; leading to outcomes like higher quality manufacturing, faster delivery times, reduced waste, shorter wait times and better patient care.
In the transportation industry for example, IoT technology can enable real-time monitoring of vehicle speed, idling time, routes and driver behaviour to optimize fuel usage, improve scheduling and ensure safety - with potential savings of thousands of dollars a year per vehicle.
Arrow Transportation Systems, a Vancouver-based trucking and distribution company, implemented an IoT solution that connected every truck to the TELUS wireless network and allows Arrow to monitor location, mechanical and driver safety data.
"Transportation is a business with high variable costs; when TELUS connected our fleet with an IoT solution, we immediately realized a savings of 8 per cent on fuel costs alone," said Mitchell Zulinick, COO, Arrow Transportation. "By collecting and acting on data in real-time, we're able to provide better service to our customers and realize enough direct savings for the solution to completely pay for itself."
Despite its massive potential, only 13 per cent of current IoT projects are considered to be "transformational" - meaning they fundamentally change business processes or become a launch pad for new businesses. IDC predicts that the number of transformational projects will rise over time as business leaders recognize the possibilities of IoT and learn from pilot projects.
"IoT can not only increase productivity, it can enable entirely new business models. However, despite its transformative nature, only one out of every eight IoT projects taps into the technology's full potential," said Tony Olvet, Group Vice President, Research at IDC Canada. "CXOs looking to gain a competitive advantage need to examine how IoT can reshape what is possible in their business. The alternative is to fall behind global innovators that are already utilizing new applications to creatively reinvent their industries."
Guidance for businesses considering an IoT solution
IoT solutions are built with three key components: hardware, software and connectivity. As 75 per cent of current IoT deployments require some degree of customization, companies are best to work with external providers that have a network of partners and experience deploying tailored IoT solutions.
Businesses should consider four key enabling technologies - wireless connectivity, cloud computing, Big Data analysis and IT security - when evaluating an IoT solution.
"We are still very much in the early stages of IoT maturity in Canada and organizations without internal experience should learn from early adopters and work with external providers that understand the challenges of deploying IoT solutions," said Olvet. "Businesses should select partners that can show leadership around IoT both in terms of innovation as well as practical guidance in key areas like wireless networks and IT security."
Additional research findings
- Wireless network technologies are currently used in 82 per cent of IoT deployments; this figure is expected grow going forward due to the pervasiveness of wireless connectivity.
- While 74 per cent of businesses are storing data generated from IoT internally, IDC expects the amount of "Big Data" generated by millions of connected devices to become a constraint that will require hosted or cloud solutions.
- Where external providers are employed to manage the IoT platform or application, cloud solutions are used in 61 per cent of the time. Due to the inherent flexibility and scalability offered by cloud, IDC predicts this number will grow.
- Ensuring the security of IoT solutions was considered a major challenge by 31 per cent of respondents; IDC recommends that organizations be proactive about security and select the right partner to fortify networks, devices, applications, data and other physical assets.
The TELUS/IDC Internet of Things Study 2014: The Connected Canadian Business surveyed 209 medium and large (i.e., with more than 100 employees) Canadian organizations by phone and web between March and April 2014. This included 122 IT decision-makers as well as 87 business leaders across a variety of departments. To read the study in its entirety, please visit telus.com/IoT.
TELUS (TSX:T)(TU) is Canada's fastest-growing national telecommunications company, with $11.5 billion of annual revenue and 13.3 million customer connections, including 7.8 million wireless subscribers, 3.2 million wireline network access lines, 1.4 million Internet subscribers and 842,000 TELUS TV customers. TELUS provides a wide range of communications products and services, including wireless, data, Internet protocol (IP), voice, television, entertainment and video, and is Canada's largest healthcare IT provider.
In support of our philosophy to give where we live, TELUS, our team members and retirees have contributed more than $350 million to charitable and not-for-profit organizations and volunteered 5.4 million hours of service to local communities since 2000. TELUS was honoured to be named the most outstanding philanthropic corporation globally for 2010 by the Association of Fundraising Professionals, becoming the first Canadian company to receive this prestigious international recognition.
For more information about TELUS, please visit www.telus.com.
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives and the investment community to make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research and events company. You can learn more about IDC by visiting www.idc.com.