Internet of Things: A Catalyst for Business Outcomes, Not a Standalone Market

“The world is the totality of facts, not of things.” —Ludwig Wittgenstein

In 1993, the promise of internet wealth seemed fanciful. Yet the mid‑1990s birthed Amazon, eBay, Google, Netflix, and PayPal—platforms that reshaped the global economy. Today, tech firms account for 26% of the S&P 500, a testament to the enduring power of digital platforms.

Where Are We Now?

Like the early Web hype, IoT’s excitement peaked around 2015, buoyed by vendors such as Ericsson and Cisco who projected 50 billion connected devices by 2020. Current data, however, shows adoption falling short of those numbers. A 2017 McKinsey survey revealed many pilots languish in “pilot purgatory,” a sentiment echoed by consultants, executives, and system integrators across industries.

Putting Outcomes First

IoT’s slow uptake stems from treating it as a market in its own right rather than a tool that unlocks business value. Customers care about measurable outcomes—efficiency gains, cost reductions, and improved service—rather than the sheer volume of deployed sensors or projects.

Take Enterprise Asset Management (EAM). Gartner calls this segment “very mature,” with a dedicated Magic Quadrant. Instead of building a new asset‑management app, the smart approach is to ingest sensor data into existing EAM platforms, creating context‑based insights that extend asset life cycles. Oracle’s IoT Asset Monitoring Cloud and Production Monitoring apps exemplify this integration.

Other core enterprise suites—Supply Chain, ERP, MES—can similarly be enriched with IoT data, driving tangible ROI.

Where Are We Headed?

We’re witnessing market consolidation. Leading enterprises are enhancing their own applications or partnering with a few ISVs. Recent moves include Software AG’s acquisition of Cumulocity, Munich Re’s purchase of Relayr, and Arm’s acquisition of Treasure Data. These deals signal a shift toward outcome‑driven IoT, even if the financial returns for early investors may be modest.

In the next 18–24 months, the IoT ecosystem will likely streamline. Success stories will focus on clear ROI, leveraging proven data infrastructures. Projects that become enablers of subscription or service‑based models—like Kaeser Compressors’ “compressed air as a service”—demonstrate how IoT can transform revenue streams.

Real‑World Successes

• Kaeser Compressors – Shifted from selling equipment to a consumption‑based model by continuously monitoring compressors via IoT, reducing outages and offering customers a dedicated app built on SAP HANA Cloud Platform.
• Thyssenkrupp Elevators – Integrated sensor data with Microsoft Azure’s machine‑learning platform to predict component lifetimes, cutting unplanned downtime by up to 50% and covering 40% of elevators worldwide.

These cases illustrate an integrated approach: adding IoT to an existing technology stack rather than building separate silos.

Pulling It All Together

IoT is a powerful enabler, but its value emerges when sensor data is merged with industrial and enterprise systems. As Zach Shelby of Arm noted, “IoT is successful when we stop talking about it as something special. It’s a technology, not a market.” The focus should be on applications that deliver measurable ROI, not on the hype around connected devices.