2012
04.13

This is the second in a two-part entry on user community investment plans for connected devices.

Investment in connected device markets will be up moderately this year, and likely up materially for the forward two years.

This is an overall market statement, but, we think many vertical and application market markets in North America and the European Union will loosely resemble this growth profile.

Full disclosure:  It is our opinion that growth with not be uniform or smooth across most market segments. We are sanguine on many dimensions of growth prospects, but, not on a rising tide that will lift all boats

Other markets – BRICs, Japan, Pacific Rim overall – are a little less clear at this point.

The Connected World/ INEX ADVISORS Survey: The Next 20 Billion Nodes remains open. We encourage you to invest 10 minutes in the survey


Source:  Connected World/ INEX ADVISORS.  The Next 20 Billion Nodes Survey.  2012.

High level take-aways:

We think it is important to repeat some of the statistics from the first entry on the topic of user investment plans for connected device solutions. Here is that replay.

  1. Nearly 70% of the respondents have a solution installed:
    1. 45% of the current user survey respondent sample have a connected device solution installed and are planning to invest in installation expansion or upgrades in the next 24 months.
    2. 23% have solutions installed, but, have no plans to expand or upgrade their solution in the forward 24-month period
  2. Approximately two out of three users that have evaluated connected solutions in pilot are planning to invest in a rollout
  3. Most –80% or more—of the companies that have not investigated connected device solutions are not planning any form of investment in the forward 24 months

So what is the point of today’s chart? Most of the respondents in this sample have a solution or a pilot installed and most of the respondents are expecting their budgets to remain flat or grow slightly. This data we are gleaning from conversations with user community decision makers indicate the following to us:

  1. The market is still learning to sort through the terms and definitions – what connectivity, connected devices, the cloud, the Internet of things, and machine-to-machine really mean.
  2. The market is still in the identification process with respect to what recently defined, or newly clarified technical concepts such as those cited above, might mean to their operations.
  3. The market is gaining confidence, cautiously, in the possibility of the value(s) that can be created or enabled by the intelligent deployment of these solutions.

And what does that mean? Well, for suppliers, we think it means:

  1. The hype that inhibited the market before, during, and after the recession appears to have settled.
  2. Real knowledge is being transferred in some markets, real value is being created, and some users are prepared to make real investments in solutions—of smaller, in stages, with challenging gates for would-be suppliers to navigate.
  3. These markets will require sustained pre-and post-sales support for the foreseeable future – hopeful solution providers best prepare themselves for material operating expense requirements to deliver these capabilities, or identify and manage partners who can.

Our advice: Continue to maintain dual focus on two strategic imperatives:

  1. Bulletproof solutions that deliver on every explicit and intimated promise of accuracy, resolution, reliability, and ultimately, value-add
  2. Authentic knowledge — and functional understanding – of your customers’ multi-faceted requirements and preferences as they relate to the adoption, rollout and operation of your solutions.

There are limited plug-and-play attributes to the highest value-adding solutions in the connected devices markets.  The market knows that. It is a significant driver of their conservative, staged investment and deployment strategies.  The sooner your teams internalize that, the sooner your customers will open up to you.

We need your help to make this survey as valuable as possible. If you are a user or evaluator, please invest 10 minutes to share your ideas. If you are a supplier, please share this with your customer and prospect community.

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