This article first appeared on the BNEF mobile app and the Bloomberg Terminal.
- One-third of projects fail at pilot scale, survey shows
- High cost of scaling and unclear value are to blame
While some in energy, manufacturing, healthcare and transport are adopting IoT and analytics, other companies are struggling to realize IoT’s value in short-term tests. According to a Microsoft survey, one-third of IoT proof-of-concept projects currently fail.
Respondents reported projects failing because the cost of scaling the project was too high, there was little value demonstrated, or the client did not have the necessary technology in place.
There are benefits of IoT and AI. BNEF calculates a digitalized oil refinery can reduce the cost of refining oil by 11%. And gas power plants could improve profit margins by 14%.
But payback can be slow, and software integration companies and consultants are some of the biggest beneficiaries of IoT projects to date. We expect increasing product standardization will help with IoT uptake.
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