Ninety percent of decision makers believe IoT is critical to their company’s success, according to Microsoft’s latest IoT Signals Report.

In the face of the COVID-19 pandemic, IoT adoption surged in the last year from 85% to 91%, the report found. That growth is expected to continue in the next two years as 95% of organizations anticipate using IoT just as much or more than they do today.

Microsoft’s report is published annually to provide partners, customers, and business leaders with insights for their IoT strategies. The vendor commissioned Hypothesis Group to conduct the research along with several more reports in the IoT Signals series. The report included responses from more than 3,000 IT leaders around the world collected during the second quarter of the year.

“COVID-19 is having an undeniable impact on the world around us, and IoT is no exception,” wrote Sam George, corporate VP of Azure IoT at Microsoft, in a blog post. “While the pandemic has slowed business across the globe, IoT is an area with upward trajectory in the wake of the virus.”

At a time where businesses are continuing to address the immediate challenges of remote work and constrained budgets by investing in digital transformation, the research findings suggest that IoT initiatives are making a case for themselves in their ability to improve efficiencies, quality, and productivity.

Just over half of companies surveyed said that IoT helped increase operational efficiency, while 47% cited IoT as a reason for imposed productivity. Similarly, 46% respondents also tied IoT to increased yields. Other reported top IoT benefits include quality (77%) and safety (41%).

Despite worldwide IoT spending taking a significant hit from the economic effects of the pandemic, IDC expects the market to see a double-digit growth rebound both in the mid- and long-term. Andrea Siviero, associate research director with IDC’s Customer Insights & Analysis group, said IoT will be a key “return to growth” accelerator.

The report also found that while 31% of enterprises are increasing their investment in IoT due to Covid-19, twice as many will be decreasing their spend. According to the report, IoT projects are evaluated by return on investment (ROI), and often measured first by how much they move the needle against automation and efficiency goals.

While ROI isn’t always a measure of IoT’s success, it can be the reason a project fails. Those that plan to maintain or grow their IoT investment have fewer projects in the “learn” phase “indicating it is easier to increase investment after seeing its successes,” the report states.

Companies who anticipate the same or more IoT investment have 27% of projects in the learn phase, compared to those who anticipate less investment or said it’s too early to tell, who have 35% of projects in the learn phase.

Another potential hurdle on the road to a “double-digit growth rebound” is security. Though it is a low hinderance to adoption, the report found that it is a universal consideration during IoT implementation. Nearly all of the companies that participated in the study cited security concerns with implementing IoT.

“Apart from data privacy, ensuring network-level security and securing endpoints are critical, while security management and managing default passwords is a lower priority,” George writes.

Microsoft’s report came a month after Gartner released its latest Hype Cycle for Supply Chain Strategy0 report showing that IoT applications have reached the trough of disillusionment. This highlights technologies and markets in which interest has waned as experiments and implementations have failed to deliver.

“IoT is in the trough because we see that many companies are implementing the technology, but they struggle to define the best opportunities for using its measurement and tracking capabilities,” said Mike Burkett, VP and distinguished analyst with the Gartner Supply Chain Practice, in a statement.

Gartner added that the market will begin to climb out of this trough as the technology advances and practitioners succeed in defining the best opportunities for the unique measurement and tracking capabilities of IoT.