U.S. organizations have scaled back their IoT investment due to the COVID-19 pandemic, citing cybersecurity and onboarding challenges.

That’s according to a new State of IoT Adoption Study commissioned by global IoT connectivity provider Eseye. The study was conducted by Opinion Matters among 250 U.K.- and 250 U.S.-based senior decision makers and implementers of IoT strategy within five vertical markets.

More than one-third of U.S. organizations have decreased their investment plans in IoT and canceled their IoT initiative altogether as a result of COVID-19. That’s considerably higher than their U.K. counterparts at 19%.

U.S. respondents had fewer large IoT projects underway, with only 13% having deployed more than 10,000 devices. That indicates the market may not have matured as quickly as parts of Europe. This lack of maturity may be why some U.S. respondents decreased investment plans and are cautious about IoT success.

Harnessing IoT for Innovation

Nick Earle is Eseye‘s CEO.

Eseye’s Nick Earle

“These findings suggest that U.S. respondents are choosing to harness IoT for innovation, to break into new geographies and conduct market research with new products,” Earle said. “However, security of device and device onboarding was more of a significant challenge for U.S. respondents than the U.K. This device onboarding issue may point to more stringent device certification programs in the U.S. compared with the U.K. However, the need for intelligent connectivity was not such an issue in the U.S. as it was in the U.K. This could be because historically, U.S. deployments tend to be domestic, rather than international. However, as enterprise organizations based in the U.S. deploy IoT globally, this becomes a much bigger issue due to permanent roaming and other cellular connectivity restrictions.”

Forty-one percent of U.S. respondents cited security as a top challenge when implementing IoT. That compares to 36% in the U.K. Likewise, 41% of U.S. respondents said device onboarding – device setup, configuration and design – testing and certification was also a key issue. That compares to 29% of U.K. respondents. As a result, IoT projects have failed to reach their full potential, according to three-quarters of U.S. enterprises that have embarked upon an IoT initiative in the last year.

Tipping Point in IoT Projects

The study found the larger the project, the faster the acceleration as organizations embrace IoT. The more devices respondents have in the field, the more they are planning to deploy in the coming year. This indicates a tipping point in IoT projects in terms of scale. However, of 250 U.S. respondents, only 13% had deployed between 10,001 devices and 100,000 in the field, and only 2% had deployed more than 100,000 devices.

innovative organizations take on IoT projects to disrupt traditional business models and deliver tangible business benefits, Eseye said. When asked about the benefits their IoT initiative has or is predicted to deliver, U.S. respondents scored higher on entering new markets versus the U.K. They also scored higher on delivering new lines of business.

Forty-five percent of U.S. respondents cited cloud and remote access as the top technology drivers as many businesses look to accelerate their digital transformation plans with IoT initiatives. U.S. respondents rated low-power wide-area network (LPWAN) technologies and intelligent edge hardware higher than 5G. However, 5G was the second-highest technology driver for U.K. respondents.

“When looking to the future, 88% of U.S. respondents said that IoT is a priority, which was higher than the U,K,, with 85%,” Earle said. “Likewise, we found that U.S. organizations were more concerned about management of the device and contracts, which could mean that they are starting to think about bigger, more global deployments, which mirrors what we are starting to see in the market.”