How to minimize the costs of launching an IoT product

Posted by Iryna Liashchuk

Many businesses are already taking advantage of IoT solutions to improve their efficiency and create new revenue streams. However, if you're considering launching a connected business, one of the most important factors to contemplate is the cost of IoT software implementation. This article will give you an overview of what goes into IoT software development and maintenance. 

Different factors feed into the cost, but the two most common concerns for companies getting into IoT are the cost of initial software development (or “integration”) and ongoing expenses after devices have been deployed. Unfortunately, as key stakeholders ponder over the ever-present build vs buy dilemma, the ones who lean towards building often tend to underestimate both significantly.

Let's take a look at a minimum set of software products you would need today to run a connected product, business, or service. First of all, firmware - software that is uploaded and then runs on the hardware. It provides a low-level control for the device's specific logic. Networks and connectivity – it's a part of firmware development, but I would move it into a separate domain, crucial for any IoT implementation.

Cloud is any service made available to users on demand via the Internet from a cloud computing provider's servers. The IoT servers have different purposes, like administration, monitoring, data gathering and analysis. Applications - once the device is connected, in today's reality you would need a user interface to interact with the device or service, configure it, control and monitor remotely, visualize processes, etc. It can be a touch control, a mobile app, a web app, a voice app (e.g. Amazon Alexa skill), etc.

Working with deployed connected products also usually requires two different types of apps: customer-facing applications (remote control, automation settings, maintenance alerts) and applications for internal company use (fleet management, analytics, device health tracking, performance tracking and maintenance alerts). And one thing is to offer an app, and a totally different thing is to build an app people will actually love to use. The latter requires a particularly strong UI/UX expertise in addition to the expected front-end, back-end and QA resources. 

As part of an IoT solution, you'll need additional storage capacity and processing power to perform analytics, run reports, and house the vast amounts of data that will be generated. Invoicing for these capabilities can vary—from a fixed monthly cost to metered billing—so make sure you understand the pricing model to anticipate cash flow better.

Various IoT platforms offer parts of the solutions for the software needs mentioned above. However, it often takes at least 3-5 different vendors to get everything an IoT powered business needs. Not only is it challenging to manage so many vendors, but also the costs really start adding up, making IoT implementation and maintenance pricing prohibitive for many companies, especially the smaller ones.

Fortunately, there are now options like Blynk IoT platform that have launched solutions tailored specifically at small businesses and startups. As a result, engineers and entrepreneurs worldwide can build and commercialize connected products without the heavy investment typically required to start an IoT-enabled business. Anyone with an MCU, some coding skills, and a great product idea can create an IoT business. And their monthly software costs will be less than what they pay for a typical TV subscription in the US.

Out-of-the-box, Blynk is supposed to cover 90-100% of software needs a business typically faces in the first 2-3 years of IoT operations. The platform functionality includes device provisioning and management, data hosting in the cloud, mobile and web apps for customers and staff, firmware over-the-air updates, user and organization management, data analytics, all kinds of automations and much more.

IoT software - build or buy?

As you can see, building your own IoT software from scratch is not a cheap endeavor, especially with a team based in the USA. If you have all of the right people on board and have a bulletproof ROI model for your IoT investment - go for it, build in-house. But if you are an OEM whose main focus remains on their core products and you care about optimizing costs and your time to market - then you are probably better off leveraging a solid IoT platform. Those folks have already spent those years (and in most cases, millions) building out the software you need and testing it out with real clients, in real world conditions, with all of the priceless learnings that come with that.