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Ron Callari

Ron Callari

Ron is part of the marketing team at Telzio, covering everything from tips and tech for growing businesses to customer success stories for the Telzio blog.

The Internet of Things’ Value Proposition Sought by SMBs

April 14, 2016

The Internet of Things (IoT) is omnipresent and ubiquitous. While, small-to-midsize (SMBs) are going to be a major driver of many of these devices, if these products are going to make their way to market, the price-to-value component needs to be in line. With small budgets, SMBs are frugal when shopping for new technology, so devices that automate, monitor and/or control other devices are going to be scrutinized closely.


So, there are a certain number of attributes SMB owners will factor into their buying decisions. MediaPost’s correspondent Chuck Martin feels that since a lot of these individuals are already pre-disposed to home automation products, buyers should be looking for the following twelve attributes:

  1. Reliability
  2. Cost of equipment
  3. Cost of ongoing use
  4. Cost of installation
  5. Overall value
  6. Ease of use
  7. Security or privacy concerns
  8. Overall experience
  9. Ease of installation
  10. Need more information
  11. Better interoperability of multiple devices
  12. More uses for home (and smart office) control

Survey Says

SMB operators who also own a home network system, which allowed them to view TV programming and movies were much more likely to adopt the concept of IoT (in general) and subsequently its product line much quicker than those that did not.

This fact was proven out in a most recent survey conducted by International Data Corporation and released on April 11, 2016, which reached 1,500 U.S. adults who subscribed to broadband Internet service at home.

Their findings indicated that approximately 28% of people who had purchased a home network to stream online videos to their television sets were more likely to adopt IoT applications than those without.

“The long-run impact of the Internet of Things will be broader and deeper than we imagine right now, but the industry is still in the early stages of developing the vision and conveying it to consumers,” said Jonathan Gaw, research manager for IDC.

Second Mover Benefit

Those small business owners who are also homeowners will test their new IoT devices in their homes before moving them to the office. This behavior has been termed: ‘second mover benefit.’

The consumers that fell into this category were keen to assess if these devices will garner the greater ROI for their companies.

The top two types of devices that could be tested at home before going to the office were energy and security products. The survey noted that ten percent of US households with broadband currently have at least one smart device with energy-related functions, including eight percent with a smart thermostat and six percent with smart lighting.

Other devices considered were smart light bulbs, smart smoke detectors, smart energy management devices, smart alarms, surveillance IP cameras, and smart hubs. {Note: my previous blog titled: SMBs Making Work Lives Smarter in 2016will provide you with detail on some of these products.)

With all of these devices, once installed in an SMB’s office, the next steps would include evaluating their potential ROI and assessing any security risks, particularly if the company’s data is connected to the Cloud.

SMBs still hesitant

Separate from the early adopters, there are those SMBs who will rather wait until others vet these IoT devices. Those in the survey that fell into that camp and displayed relatively low desire to acquire any home or office automation indicated their preferences were predicated on the following:

  • 46% — Too expensive
  • 40% — Have no use for them
  • 30% — Don’t see the value in them
  • 18% — Too complicated
  • 12% — Doubt they will live up to the promise
  • 11% — Don’t know enough about them

Whether a consumer is on the fence or holding back on office automation devices, the cost of devices was at the top of both lists which reinforces the how critical the value proposition is for SMBs.

Size of Budget

When comparing big brands to SMBs, Rose Schooler, VP of the IoT Group and GM of the IoT Strategy and Technology Office at Intel she noted that the main difference was financial as well.

“I think because of the mass, and opportunity and capex budgets of larger enterprises, you’ll see some adoption there – maybe more quickly — but I don’t think there are any different challenges between a small business and a large enterprise. It’s just the size of the budget that they have to experiment with.”

What works for you?

Should SMBs consider some IoT adoption today or at a future date? It all comes down to individual preferences. Despite a significant rise in business spending, there’s no common blueprint for businesses large or small. While there are more IoT devices emerging with more of an SMB focus, there really is no one-size-fits-all solution.

As always, the best way to proceed when it comes to new technologies is to match the value proposition of each device with the return it provides you from both a financial and efficiency standpoint. And then prioritize which devices make more sense for your business today, and those you set aside for the future consideration.