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Not only is the Internet of Things (IoT) market rife with opportunity but also risks.
A recent survey of 397 IT executives conducted by consulting firm Altman Vilandrie & Company found that nearly half of U.S. companies (48 percent) have been hit by an IoT security breach. And the effects of those breaches can be costly.
For businesses with annual sales of under $5 million, the cost of a breach can account for 13.4 percent of revenues. Meanwhile, larger firms can suffer losses in the tens of millions of dollars. Among companies that generate more than $2 billion in revenue each year, nearly half said the potential cost of a single IoT security breach can surpass $20 million.
Fortunately, there's a way to avoid such a fate but it may require an increase in IoT security.
Organizations that haven't experienced a breach spend 65 percent more on IoT security than their less fortunate peers, Altman Vilandrie & Company's survey discovered. Those investments are primarily guided by vendor reputation and the quality of a security product, presenting an opportunity for companies looking to stake a claim in the burgeoning IoT security market.
"We see it being critical for security providers to build a strong brand and reputation in the IoT security space," commented said Altman Vilandrie & Company principal Ryan Dean in prepared remarks.
"There are lots of providers developing innovative solutions, but when it comes to purchasing decisions, buyers are looking for a brand and product they trust. Price is a secondary concern that buyers tend to evaluate after they have narrowed their options down to a few strong security solutions," continued Dean.
The survey's results also indicate that enterprises are still struggling with their IoT security strategies.
Seventy-four percent of companies take a centralized approach to IoT security decision-making, despite the varying needs of their discrete business unites. Although most technology executives consider IoT security a distinct category (68 percent), less than half have a separate budget for it.
Security isn't the only IoT-related factor keeping IT and business leaders up at night.
A recent Cisco survey found that few IoT projects go smoothly, due to a lack of internal expertise and budget overruns. Other IoT challenges that stand in the way of successful deployments include runaway data storage requirements, privacy concerns and competing standards.
Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.