You might believe that a big pool of investment money is important to IoT success, and that a high-priced product or service also helps. The assumption might be that companies selling high-ticket items such as aircraft and truck engines can afford to ‘bake in’ extensive sensors and other digital devices for their high-ticket products.
So what did we find? First, industrial manufacturers had a much higher percentage of companies in their industry – 19% – with revenue increases from IoT of more than 30% last year. That is, the industrial manufacturing sector had the highest percentage of IoT Leaders among their ilk of any of the 13 sectors. Banking and financial services (13%) and telecommunications (11%) were next. At the bottom: media and entertainment (1%). Publishers, broadcasters, and the like as a whole are struggling to generate significant revenue from IoT. (See Exhibit IV-2.)
While heavy spending is no guarantee of success with the Internet of Things, we did find that Leaders plan to spend far more than Followers on IoT. In fact, Leaders’ 2015 IoT spend will be more than three times what the average Follower spends this year: $229 million vs. $68 million.
Interestingly though, our study found that the companies with the highest revenue from IoT initiatives were not all sellers of high-ticket products or services. In fact, 17 of the 65 Leaders said the average price of their offerings was less than $1,000, including five survey takers who said the average price of their offerings was less than $100. The average price of Leaders’ offerings was $2,559 – far less than what it costs to buy an aircraft engine from General Electric.