IoT's Dark Side: What CXOs Should Know

by CXOtoday News Desk    Feb 28, 2017


By now, most business leaders are aware of the potential and promise of the Internet of Things (IoT) and they are coming to terms with the fact that IoT is underway and is an unavoidable force. However, the dark side of IoT is also unescapable, and businesses that understand earlier in their IoT deployment can overcome the barriers and thrive in a connected world.

A recent study by enterprise networking solutions firm Aruba [an HPE company] titled: The Internet of Things: Today and Tomorrow’ researchers warns CXOs that connecting thousands of things to existing business networks will open up new security challenges, which has resulted in security breaches for a large majority of organizations in the region. [Read the full report here]

The research also found that although 97% of the 1,150 respondents from Asia Pacific (Australia, China, India, Japan, Singapore, and South Korea) have an understanding of IoT, many are still unclear of the exact definition of IoT and what value it brings to their organizations. 

In his eBook titled, ‘Making Sense of IoT’, technology visionary Kevin Ashton—who coined the term ‘Internet of Things’—presents the following definition: “The ‘Internet of Things’ means sensors connected to the Internet and behaving in an Internet-like way by making open, ad hoc connections, sharing data freely and allowing unexpected applications, so computers can understand the world around them and become humanity’s nervous system.”

The study uncovers a number of obstacles that IT leaders feel are preventing IoT from delivering greater business impact. Organizations in this region cited the cost of implementation (53%), cost of maintenance (52%), and difficulty integrating with legacy technologies (47%) as key issues, a sentiment echoed across the world.

Most notably, security flaws were found across many IoT deployments. The study found that 88% of organizations in Asia Pacific have experienced at least one IoT-related security breach, the highest in the world. More than half of respondents declared that external attacks are a key barrier to embracing and adopting an IoT strategy. This confirms that a holistic IoT security strategy, built on a strong network access control and policy management, will not only protect enterprises but also simplify the security approach for IT.

Ashton describes IoT as the ability to capture and effectively use data, but this appears to be another clear challenge for Asia Pacific’s organizations. While nearly all (98%) of organizations that have adopted IoT claim to be able to analyze data, the same majority admitted to challenges in creating value from this data. More than a third (35%) of organizations in Asia Pacific are not extracting or analyzing data within corporate networks, missing on insights that could improve business decisions.

When examining the business benefits of IoT, Ashton discovered that actual gains from IoT exceeded initial expectations on all fronts. In Asia Pacific, this ‘expectations dividend’ is most evident in two key performance areas: profitability and business efficiency.

For instance, 35% of business leaders cited significant profit increases after deploying IoT, a 20% increase from those who projected a large profit gain from their IoT investment (15%). Similarly, while 39% of executives expected their IoT strategies to yield huge business efficiency improvements, actual results show that more than half of those who implemented IoT (51%) has experienced great business efficiency gains.

Chris Kozup, Vice President of Marketing at Aruba, said, “With the business benefits of IoT surpassing expectations, it’s no surprise that the business world will move towards mass adoption by 2019. But with many executives unsure of how to apply IoT to their business, those who succeed in implementing IoT are well positioned to gain a competitive advantage.”


Nonetheless, the study shows that 78% said that the introduction of IoT in the workplace has improved the effectiveness of their IT team, and 75% find it has increased profitability, business efficiency and visibility. The key verticals that gained so far from IoT deployment are healthcare, retail and government. While nearly half (49%) of government IT departments are struggling with legacy technology, seven in ten IoT adopters in the public sector report cost savings and improved organisational visibility as the major benefits.

Kozup comments, “While IoT grows in deployment, scale and complexity, proper security methodologies to protect the network and devices, and more importantly, the data and insights they extract, must also keep pace. If businesses do not take immediate steps to gain visibility and profile the IoT activities within their offices, they run the risk of exposure to potentially malicious activities. ”

Ashton concludes: “Since its inception in 1999, the Internet of Things has been ridiculed, criticized, and misunderstood. And yet here we are, less than two decades later, in a world where tens of thousands of organizations are saving and making hundreds of millions of dollars from the Internet of Things, using cars that drive themselves, subway stations that sense passengers, algorithms that diagnose deadly diseases using phones, and many other once apparently-impossible technologies. The future promises far more amazing things. The most important decision you can make now is how to be a part of it.”