Smaller Firms Lag in A.I., IoT Adoption. That’s an Opportunity.

Smaller companies aren’t adopting cutting-edge technologies such as artificial intelligence (A.I.), blockchain, and virtual reality (VR) at the same rate as larger ones—and that’s an opportunity for tech companies exploring those arenas.

According to a new study by Spiceworks, only four percent of companies with fewer than 99 employees are using artificial intelligence, and a mere 8 percent plan to do so within the next 1-2 years. It’s similarly low for blockchain (5 percent currently using, with another 5 percent planning to use in that 1-2 year timeframe). Nor do the percentages for those technologies increase much higher among larger firms with 100-499 employees.

Among companies with more than 1,000 employees, though, the adoption rates for every kind of cutting-edge technology—from A.I. to 3D printing to the Internet of Things (IoT)—are huge, and often outpace smaller companies by five to 10 percentage points (depending on category). The reason for this gap is straightforward: larger companies have more money and people to invest in the newest technologies, and they’re going to explore anything that gives them a competitive advantage in a hyper-aggressive marketplace.

One big exception: IT automation, which both large and small firms seem equally committed to exploring. For example, some 34 percent of firms with less than 99 people currently employ some kind of automation (with another 6 percent planning to adopt within 1-2 years), closely aligned with 38 percent of firms with over 5,000 employees doing the same. Some 13 percent of those largest companies plan to adopt some kind of automation platform within the next 1-2 years.

“Among emerging tech trends, more than 40 percent of IT decision makers foresee IT automation technology having the biggest impact on their business, while about 30 percent believe IoT technology and gigabit Wi-Fi networking will make the biggest mark,” mentioned the Spiceworks study. “At the same time, less than 15 percent of IT decision makers are sold on VR, blockchain, or 3D printing technology having the biggest impact on their business.”

For many companies, the cost of adopting relatively untested technologies can prove prohibitive. For example, if you run a firm devoted to education technology, do you make an expensive bet that 3D printing is indeed the future of learning, or do you give that budget to initiatives that have a track record of success? If you’re running a startup without much venture funding, can you afford to hire 10 new machine-learning experts?

(These technologies are also expensive for the companies that build them. For instance, Business Insider just reported that DeepMind, Google’s artificial intelligence initiative, faces escalating expenses related to new hires. The world’s best experts in things like machine learning do notwork for free. Good thing Google has a plan to turn A.I. into a major revenue center.)

For tech startups (and tech pros who are building things on their own), this lack of adoption among smaller companies is actually a really good thing. First: Whether you’re working in A.I., IoT, or another cutting-edge, acronym-friendly field, there’s a lot of market-share still to be seized. Second, cost is obviously a significant factor in adoption, and whoever can make these potential clients the best deal will likely take their business.

The rise of these technologies could mirror what happened with the cloud. For decades, companies large and small needed to buy lots of expensive on-premises infrastructure from a handful of tech titans. Then a host of smaller companies came along, offering cloud services that delivered all the right IT goodies for a fraction of the cost. Whole industries were disrupted; money was saved; and some of those smaller cloud firms grew into the next generation of tech giants.

Will the same thing happen with A.I., VR, or another tech? That’s hard to say; and certainly, the cost of developing these new technologies is high enough to dissuade many startups and tech pros from jumping in. But to a few brave souls might go the spoils.

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