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Why Most IoT Initiatives Die as Great POCs

Updated: May 24, 2019


Today, it’s easier than ever for organizations to build an IoT proof of concept (POC). With most cloud service providers offering free or low cost first-year services, and a plethora of open source software libraries and low cost prototyping hardware platforms, getting an IoT idea from a product manager’s roadmap sketch to POC is relatively inexpensive and easy.

Despite this wealth of low-cost development resources, recent studies have found that more than 70% of IoT initiatives never make it beyond the POC stage. Why?


The IOT Chasm


For an IoT solution to be successfully adopted into the real-world ecosystem, it must allow an organization and its customers to consistently achieve enhanced business value. These include reduction in costs through improved quality, productivity, safety, compliance and minimized downtime. In addition, successful IoT projects can help organizations identify new revenue streams through services that enhance the customer experience.



Most IoT projects fail due to missing business goals and not machine failure.

Not surprisingly, a 2017 Cisco survey found that the top reasons why most IoT POCs failed were related to a failure to meet schedule, cost and business outcome expectations. Simply put, the same tools OEMs and system integrators use to build an IoT POC may not be sufficient to create a field-ready solution that can deliver the business outcomes and ROI that customers and stakeholders need. We call this gap the IoT Chasm.


Failure to Bridge the IoT Chasm Has Significant Consequences


High failure rates in bridging the IoT Chasm can have significant consequences throughout the ecosystem. Several man-years of precious time and millions of dollars in investment are lost. A system integrator or solution provider may have invested tens of thousands of dollars to build a proof-of-concept but never win the real project. A product leader may risk his or her career when projects of this scale do not deliver ROI or fail to meet customer performance expectations. Organizations can lose time to market advantage or lose the entire market opportunity to a competitor.


Success Requires Looking Before You Leap


Product development teams and system integrators must address key business issues that impact the real costs, complexity and ROI of IoT initiatives. This is especially relevant for industrial sectors where machines and devices typically have long lifecycles in the field (as opposed to consumer devices) and the cost to rip and replace is much higher. Some of these questions include:

  • Identifying and prioritizing stakeholders’ needs

  • What business outcomes (and for which stakeholders) must be achieved to justify project investment?

  • What applications must be developed or re-worked and what data will need to be extracted and integrated?

  • What data needs to reside in the cloud or locally? How will this impact software design and costs to the customer, technical support teams and your organization?

  • What machine network environments will the solution operate in? Does the solution need to work with existing deployments?

  • Will the solution need to be adaptable to future new products?

  • How can changes, re-certifications and workforce training be minimized?

  • If the POC is for productization on new products, will existing customers upgrade? When will they upgrade? How much does it cost and how long will it take to acquire new customers for the new products?

All these questions influence almost every design decision you will make in turning the POC into a production system and comes with time, cost and complexity tradeoffs during development.


Crossing the IoT Chasm


Finally, product managers and system integrators must take into account a customers’ deployment tolerance – the people, time and money resources they are able and willing to invest can directly impact how field-ready your IoT POC or solution must be before introducing it to the marketplace.


Crossing the IoT Chasm means understanding the gap between your business outcomes, your customers and stakeholders desired business outcomes and how much in technical, time and financial resources you will need to invest to deliver a real-world ready IoT solution.

In some cases, you can cross the IoT chasm step-by-step and in other situations, it may require a giant leap. Regardless of which option you choose, you must stay focussed on the expected business outcomes that you expect out of your IoT initiatives.


At Machinechat, our focus is on introducing the next-generation of ready-to-deploy IoT solutions that will enable OEMs, system integrators and IT administrators to narrow the IoT chasm. To learn more or stay tuned on our journey, click here.