Technology analyst firm Telsyte forecasts that the 5G revenues will consist of next-generation application development, IT services, platforms and connectivity.

The Telsyte Australian Enterprise IoT & 5G Study 2019 shows more than two thirds (68%) of IT and business leaders already see 5G as crucial for their business strategy going forward – with half of these respondents indicating 5G was critical for future application development, as well as supporting existing applications.

Future applications are expected to make use of the huge data transfer capability, according to Telsyte, which says that more reliable connectivity and lower latency will have the ability to change software architectures, allowing for real-time services and cloud based AI architectures.

And the research reveals that lack of skills is also an issue, with more than 25% of respondents indicating they would be looking for an outsourced partner for developing 5G applications.

In addition nearly half of businesses surveyed expect five times or greater connected devices as today within their organisations within five years’ time, with Telsyte saying this explosion in devices is fuelling innovation and experimentation with “The Internet of Things”.

Telsyte’s latest Australian enterprise IoT maturity model shows that 32% of organisations now have a strategic approach to IoT, of which around half have pilot programs running or already have IoT in operations.

Among companies that currently do not have a formal IoT strategy, almost 1 in 3 large organisations (200+ employee) plan to adopt an IoT strategy within 12 months.

The research reveals that the biggest barriers are lack of a business case (26%), IoT seen as too expensive (25%) and a lack of skills and expertise (20%).

Among those that have overcome the barriers, early signs show that IoT is having a big impact on their businesses, Telsyte says.

Enterprise IoT has a diverse range of applications, according to the research, with the main areas businesses believe IoT will be used in being maintenance (32%), manufacturing (31%) and sales (30%) – while nearly a third (32%) of large firms are also reporting IoT to be suitable for customer service applications.

Of the third of existing businesses that have measured the Return on Investment (ROI) of IoT, 65% claim it increased revenues, half saw an increase in productivity and, similarly, half realised "better customer satisfaction or advocacy".

Telsyte notes that this closely aligns to the early adopters of IoT which have been in the transport, logistics or asset heavy industries.

Operational cost savings was reported by 39% of organisations, of which around 80% saw nearly a one-third reduction in costs, either through efficiency gains or better management of assets.

The research also found, one in four companies have IoT capable devices, but no formal strategy around them, which Telsyte says shows that while this approach is growing it does not come without challenges.

A high 81% of companies with shadow IoT are experiencing "stalled" projects, and other issues such as inconsistent technology selection, poor fit for purpose and higher costs are also experienced by organisations experiencing shadow IoT.

Telsyte managing director Foad Fadaghi says businesses that are just tinkering with IoT devices are hitting a wall.

"Critical to the success of implementing IoT strategies seems to be taking a scalable and holistic approach, with security considered upfront."

The study found more than half of the survey respondents believed that around a quarter of their IoT devices might be connected via cellular technology within 3 years’ time, while around a quarter of organisations believe up to 50% could be connected via mobile networks.