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One of the most common questions we get (and rightfully so) is – How much is adopting Internet of Things (IoT) technology going to cost us? A quick online search for IoT cost estimation will yield anything from a few thousand to millions of dollars.
In a nutshell, IoT cost estimates vary wildly depending on the use case, industry, and deployment size. Additionally, depending on your service provider, you may have to consider different elements including hardware, software, connectivity requirements, manpower, and much more.
But what should you factor into your IoT budget? And how can you avoid costly mistakes that quickly add up? Let’s take a look at the answers to these questions.
Understanding IoT
IoT technology essentially refers to cyber-physical systems made up of both electronic and non-electronic objects. These objects are often wireless and collect environmental data. This data extends to temperature, humidity, location, movement, and more, using sensors installed at various points.
The installed sensors then transmit data over a network via various connectivity types. For example, cellular, Ether, Wi-Fi, Bluetooth, Satellite, or a hybrid of all these technologies. Data and information collected can be further relayed to the cloud for analysis. This allows you to visualize insights via a user interface such as a dashboard, portal, or mobile application.
With artificial intelligence (AI) or machine learning (ML) integration, insights can also be used to predict future patterns. In turn, this can support the optimization of current operations and resource management.
Unpacking the Layers
The brief description above shows that IoT systems consist of various components operating at different layers. It might sound complex but don’t let that deter you. Let’s take a closer look at each major component to better understand how to accurately budget for your IoT.
IoT Devices
Even though IoT devices have hit a record low, their prices still range depending on their complexity. Naturally, a monitoring sensor attached to a delivery package is going to be more affordable than an AI-powered, facial recognition security camera.
Despite different price tags, all smart devices can collect and transmit data. To perform these tasks, devices must also be equipped with appropriate systems such as firmware. Allowing them to seamlessly interface with each other and a central hub.
Network
The networking layer comprises all the wireless protocols. These protocols allow devices to communicate with each other, transfer sensor data to the cloud, and encrypt all communications.
For connectivity providers that own their core network, it immediately eliminates layers of complexity and management. Most IoT architecture includes elements of connectivity, portal access, and more for seamless communication.
Service & Application Support
Back-end infrastructure is usually composed of cloud or on-premises servers and services. Again, depending on your service provider, you can expect monthly or annual cloud storage and server costs to be accounted for in your budget.
Furthermore, IoT applications refer to all kinds of applications that allow you to interact with connected devices, management devices, and more. If you include any additional services to your solution like QoS or remote troubleshooting, these elements should be part of your cost estimate.
Accounting for Hidden Costs
In addition to the above, many IoT solutions also require an ongoing support system and additional manpower. Often, these costs are rolled into general IoT infrastructure.
For example, a company launching smart recycling bins will have to equip them with smart sensors. A mobile app can also be incorporated to allow citizens to alert if sensors register that bins are almost full or damaged.
You may also want to integrate applications for added services which can include field technician management, ordering equipment parts, or even real-time route management. Naturally, this expansion of services may require more expertise, which might also translate into higher operating expenditures that should be planned for.
Avoiding Costly Mistakes
While implementing an IoT solution might not be as prohibitive as before, there are still ways to prevent costly errors.
Planning & Discovery
Start your project with proper planning to establish a business case for your IoT solution. Most IoT deployments grind to a halt because this part of planning is overlooked. With companies failing to establish a proper business case and goals for the IoT investment.
Moreover, the planning and discovery phase will allow you to validate that there are no technical limitations in your way. While this stage requires some capital, costs are not as significant as the losses you may suffer if an entire project is scrapped halfway through.
Take an Interactive Approach
You can develop a prototype within a fairly short time frame and iterate quickly to accelerate going to market. Launch a minimal viable product as fast as you can, test the IoT solution with real users and on real-world tasks, and gradually expand its feature set to support new use cases. This will also help you avoid feature creep and scale your system flexibly along with your business.
Ideally, look for a solutions provider that gives you full flexibility and feature control over the entire life cycle of your IoT, while delivering a secure, end-to-end, seamless solution. This way, you can avoid overstuffing your IoT with features from the get-go and continue updating and adapting them as your IoT needs evolve.
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