80% of IoT Projects Fail. Why and What to do

Why do most IoT projects fail? How can we ensure their success? Let’s figure it out in the article.

Nowadays it is a very popular and prospective technology. According to data and analytics company GlobalData, the global IoT market was worth $622 billion in 2020 and will grow to reach $1,077 billion by 2024. Moreover, by 2025 it will be equal to about 11 percent of the world economy, McKinsey says.

However, despite the soaring growth of IoT devices, most entrepreneurs aren’t in a hurry to implement them due to the high failure rates.

Sad, but true. A very little percentage of such projects survive. It claims in a Cisco report: only 26 percent of companies have had an IoT initiative that they considered a complete success.

That means at least 74 percent of IoT projects fail

Why does this happen and how can we ensure the success of IoT projects? Let’s figure it out in the article.

Basics on Why do IoT Projects fail


Here we list some of the most commonly observed reasons behind the failure of IoT projects.

No common standards

Like blockchain in its early days, the IoT world is full of various standards and protocols. But they do not interact with each other.

All leading corporations have made their own operating systems for IoT: Apple created HomeKit, Google — Brillo and Weave, Amazon — Echo

Lack of security

Huge amounts of data generated by connected devices and processed on IoT cloud platforms are a tasty dish for hackers who can infiltrate unsecured platforms and cause harm.

Some statistics to confirm: the number of cyberattacks on IoT systems in the first half of 2020 increased by 35%.

In 2016 happened the largest attack in the history of IoT, caused by the Mirai botnet. More than half a million devices around the world were blocked. Paypal, Twitter, Spotify, Reddit and Netflix there were among them.

Low performance

IoT systems are very sensitive to performance issues: any latency is reflected in the behaviour of the device. But it costs money — thousands of dollars per hour if we talk about industrial robots on assembly lines.

Your car takes 3 seconds instead of 0.000001 seconds to recognize that a car is cutting you off and the brakes need to be deployed

Most IoT performance issues can be traced back to insufficient testing, bad engineering, bad API design, or all of these.

Business issues

IoT projects are not unique and face the same challenges as other IT projects. Many issues are connected with business.

Unclear business objectives. Many companies don’t understand what the project needed to accomplish from a technical perspective and don’t recognize all the complexities involved in actually building and commercializing an IoT application. And after launch, many companies also had no clear roadmap for how to evolve, scale, or otherwise move the project forward over time.

No infrastructure. Business often fails to appreciate the complexity of the connectivity part of an IoT application. Let’s look at the survey conducted on 25,000 IoT buyers. Practically all respondents identified coverage, reliability, bandwidth, latency as significant technical challenges.

Customer and vendor problems. Some IoT solution providers have unrealistically raised IoT adopter expectations or over-hyped the capabilities of their products. In addition, many consumers aren’t ready to let smart devices penetrate into their lives. They consider such devices to be useless and expensive. There is also a fear that a person becomes a puppet of large corporations.

According to IoT Signals research made by Microsoft, сompanies who want to utilize IoT more find that complexity and technical challenges are their biggest barriers: 38% say these are the reasons they aren’t using IoT more

What business can do

To solve security issues

Consider security at all points, not just those surrounding your central control processes. This means that the APIs should be monitored for misuse, firmware-over-the-air be updated on time, and data be encrypted. All of these allow keeping your devices safe in case of bad actor attempts.

To improve performance

Use reliable coding practices, better software, or firmware and test it into a DevOps process ensuring consistency.

Most IoT devices are “software-defined” and thus they should be easy to update to correct the problem. Again, testing is critical here to be sure that the performance issues are addressed.

To make successful projects

Of course, you should also solve inside company’s problems and improve infrastructure. We have identified three components of success.

Analitycs Roadmap and documentation Team
●        Define your customer and market demand

●        Make it go in line with the company’s vision

●        Determine the company’s IoT benefits

●        Work out a strong project roadmap and ensure scalability

●        Predict and avoid budget overruns

●        Write user and developer documentation for IoT-based systems

●        Gather a team of IoT enthusiasts

●        Make sure that all business units agree on what the project will be (now and in the future)

●        Check whether your partner can work with multiple vendors

Things to consider when outsourcing IoT development

If you decide to outsource IoT development to a third-party organization, make sure the firm specializes in this technology and has enough experience. Visit their website or contact the managers and ask about their previous projects related to internet-connected devices. A rich portfolio of projects, from simple sensors to smartphones and wearables that collect data through wireless networks, is a good sign.

A capable electronics development team should be able to find compatible technology and create a complete system that satisfies the following requirements for quality:

  • Diverse connectivity
  • Management for a range of devices
  • Safe collection of data
  • High-performance data streaming
  • Effective data management
  • Powerful analytics
  • Robust security

Make sure to cover all these points when discussing your project to make sure it will succeed.

Additionally, check if the company has worked in different industries. If the team has cooperated with businesses in retail, healthcare, education, agriculture, and other spheres to support their IoT strategies with custom IoT solution development, it indicates vast experience and a high level of customer satisfaction.

If you want to create your own IoT project corresponding to all the necessary criteria, please visit