International Datacasting Corp. estimates the Internet of Things market will be worth $7 trillion by 2020, with tens of billions of formerly unconnected devices coming online during that time.
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But while Internet of Things, or IoT, technologies are already well under way, a new survey byAccentureshows many companies are still having a hard time getting on board.
"Our survey among 1,400 C-suite decision makers, half of whom are CEOs, found that while they might see and believe in the Internet of Things, this is not necessarily translating into effective moves to exploit it," Bruno Berthon, managing director of Accenture Strategy, said in the report.
So, what is holding these companies back? Let's take a look.
Minimal telecommunications infrastructure
One of the biggest problems executives cited (44% to be exact) indeploying Internet of Things technologies is the lack of telecommunications infrastructure. That is understandable considering this nascent stage of the IoT means that telecoms and tech companies are still deciding who will take the lead in connectivity.
A few months ago, Daniel Thomas wrote in the Financial Times that, "an intense battle is developing between technology and telecoms groups over who will provide the software and services to enable the Internet of things." Thomas mentions that ARM Holdings, Google, and Vodafone are positioning themselves to lead in IoT infrastructure connections.
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The problem now is that there are not many Internet of Thing standards for connecting devices. But as companies realize the massive potential in connecting billions of things via the Internet, you can bet more telecoms will focus on building out infrastructure to match the need.
Poor access to capital
Despite Accenture finding that the Internet of Things could contribute $14.2 trillion to world output by 2030, many executives (another 44%) say their company does not have the capital to invest in the new technology.
This may be a chicken or the egg problem. The report said 73% of companies have not made any concrete plans for the Internet of Things, which may be why they cannot raise the capital to invest in it. And perhaps they do not have any IoT plans, because they do not have any capital to invest.
"When asked about concrete investments or strategies for capitalizing on the IoT, most companies are sitting on the fence," the report said.
Lack of customer demand
About 43% of executives cited lack of customer demand as the reason for holding back IoT plans.It may seem like a cop-out to blame consumers that demand is not there, but in some cases, it is at least partly true.
For starters, an Acquity Group report said that about 87% of U.S. consumers do not know what the term "Internet of Things" means. Of those who know about wearables and other connected devices, 53% do not want wearable devices, and more than half of Americans do not even know they can buy a smart refrigerator or smart smoke detector if they wanted one.
Some of these trends are changing, though, and by the end of next year, the percentage of U.S. consumers who want a wearable device is expected to jump to 28%, up from 7% right now. Maybe that is why Appledoes not care that most wearable tech ends up as junk.
Little government support
A larger percentage (42%) of the survey respondents said the lack of government support is inhibiting their Internet of Things progress. While some companies may be looking for an extra hand in building out IoT innovations, this answer sounds a bit like an excuse.
The Federal Trade Commission said justlast month that there needs to be oversight about Internet of Things security and privacy, and last week, the U.S. Senate had its first-ever meeting about the Internet of Things. So, if tech companies are looking for more support, so be it, but they certainly are not inhibited by the U.S. government in making Internet of Things technologies.
One company that is refusing to make excuses about the IoT opportunity is Intel . After missing much of the mobile technology wave, the company has hit the ground running in the Internet of Things over the past year. Since late 2013, Intel has purchased wearable tech company Basis Science, released its own Internet of Things platform, just purchased the home networking company Lantiq, and logged $2 billion in Internet of Things revenue last year.
With the potential for the IoT to grow to 50 billion connected things by 2020, it is time for companies to start pushing for any solution available to these obstacles and to seize the opportunities in this space.
The article The 4 Biggest Hurdles Facing the Internet of Things originally appeared on Fool.com.
Chris Neiger has no position in any stocks mentioned. And while he doesn't want to give companies a free pass for not jumping on the Internet of Things opportunity, he knows what it's like to get the "does not work up to full potential" comment on a report card. He thinks he's getting the last laugh now, though.The Motley Fool recommends Accenture, Apple, Google (A shares), Google (C shares), Intel, and Vodafone. The Motley Fool owns shares of Apple, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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