Over the past two years, major vendors have braced for the oncoming wave of the internet of things. As recently as 2015, Salesforce launched its IoT Cloud -- its application for managing IoT data -- to much buzz and fanfare. Other major vendors have thrown their hats in the IoT ring, from Cisco and IBM to Intel and Hewlett Packard Enterprise. Technology providers know they need to accommodate this technology, but their software remains immature and unable to anticipate all the issues.
With the internet of things (IoT), companies can collect data transmitted from small internet-connected sensors or devices. This data may provide information about how products are functioning or how customers are using them, such as IoT-connected cars. IoT data, thus, gives vendors opportunities to connect data about products and customers to other important variables, such as customer accounts, browsing behavior online, purchase data or location information.
But since the launch of technologies like IoT Cloud, these technologies have suffered from caveats, such as "it's still early days." But despite the buzz that accompanied Salesforce IoT Cloud and its debut, it's hard to deny that technology played only a peripheral part at Dreamforce 2016. The shift reflects a combination of factors that have forced Salesforce to reconsider how it has positioned its IoT strategy and what it needs to do to deliver on its promises.
The first issue Salesforce has faced is market reality, in which corporate executives and consumers alike remain apprehensive and unclear about the true meaning and potential benefits associated with IoT.
Although corporate executives are intrigued with the transformational opportunities that could be created by IoT, they are concerned about the technical challenges, regulatory issues and organizational obstacles that stand in the way of capitalizing on the new market opportunities. Despite plenty of bullish forecasts regarding explosive growth of IoT technologies, a recent Bain & Co. survey of more than 170 executives at IoT and analytics tools vendors and more than 500 executives found about 90% of respondents are in only the planning and proof-of-concept stage, and about 20% expect to implement IoT technologies at scale by 2020.
Cybersecurity fears hampering adoption
At the other end of the spectrum, a recent survey of 1,527 respondents by ESET and the National Cyber Security Alliance found 40% of respondents were not confident in the safety, security and privacy of connected devices, and half of the survey respondents were "discouraged" from buying IoT devices because of worries about cybersecurity.
These fears became a reality when many online service companies, including Spotify and Netflix, were disrupted by a distributed denial-of-service attack. What made this cyberattack unique and particularly newsworthy was culprits usurped an array of unprotected connected devices, from webcams to web-enabled appliances, to execute the attack.
The cybersecurity fears surrounding IoT are the most obvious and visceral issues standing in the way of widespread adoption of connected products and services. Corporate executives are also perplexed about how to assemble, deploy and manage IoT networks so they can properly capture critical data and act on the information in an automated way. The truth is, there is an infinite assortment of IoT piece-parts and an overwhelming array of IoT platforms. Users aren't sure what to choose or how to get various piece-parts to work together. The integration of hardware, software and data from numerous applications with different nomenclature and fields has yet to be solved.
Salesforce hasn't helped simplify these technical issues. Instead, it unveiled its own Thunder development platform a year ago as a part of the IoT Cloud, which added only another layer of complexity to its expanding set of platforms.
Although the Salesforce IoT Cloud and Thunder development framework generated attention, Salesforce executives have acknowledged it will take time to convert the IoT vision into sellable products. The IoT team conceded a large portion of their time during that period would be dedicated to better understanding real customer requirements and common use cases for IoT.
The discovery process revealed Salesforce customers weren't ready for the bold vision of Salesforce IoT Cloud. Rather than seeking to transform their businesses via IoT, they were more interested in incrementally linking to their products in such a way that they could systematically reduce potential downtime, reduce support costs and increase customer satisfaction. While this might sound like a modest set of objectives, these practical expectations shifted the focus of the IoT Cloud effort away from "massively scalable, real-time event processing" to more targeted application development challenges.
As a result, the head of Salesforce IoT Cloud, Adam Bosworth, left Salesforce for Amazon Web Services, and Woodson Martin was named the new executive vice president and general manager of Thunder and IoT Cloud. Martin informed me that the narrower, near-term customer needs have driven Salesforce to refocus its IoT Cloud efforts and explore how to tie them together with Salesforce's Service Cloud. Given this reassessment process, Salesforce refrained from making IoT Cloud announcements at Dreamforce 2016 and will likely wait to unveil new IoT offerings in mid- to late-2017.
Salesforce's re-evaluation of its IoT Cloud strategy and services isn't stopping it from expanding its partner ecosystem. In September, Salesforce and Cisco announced a global, strategic alliance in which they will jointly develop and market services to combine Cisco's collaboration, IoT and contact-center platforms with Salesforce's Sales Cloud, IoT Cloud and Service Cloud.
Despite these issues, you can expect Salesforce to be vocal about its IoT vision and aggressively add partners to its IoT ecosystem as it attempts to craft the right set of cloud services to flesh out its IoT strategy and services in 2017.
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