Total cost of ownership, time to market, and level of control you need, are some questions that answer if you should build or buy IoT Platform.
We’ve landed right where everybody does at one point. The build vs buy debate. When you step into the world of interlinked systems or networks and decide to build something commercial with IoT, the most critical decision for engineers and teams is to decide whether to build it all from scratch or let an IoT platform handle the complexities.
Buying an IoT platform doesn't mean what it sounds like, you are not actually buying a full IoT platform priced at a couple grands. What you buy is a subscription to one of the most robust IoT platforms out there for a tens of dollars.
Keeping all this in mind, I put my research glasses on and went on to talk to a bunch of the people who could rightly guide us in this regard. (Ready to do all the work so you don’t have to.)
First and foremost here is the list of the most important questions we have to consider before we jump into the thought process of making the build vs buy decision.
After we’ve gone through these basic questions, the tech circle would like you to consider all these factors to help you make an informed build vs buy decision.
They say everything comes at a cost, so you have to be pretty clear about the TCO you’re going to incur. Total cost of ownership is a financial estimate used to calculate the direct and indirect costs of having a product or a system.
Build: Building your software surely has its own perks. It gives you complete control over your product and budget but respective aspects are of utmost importance, for example, the upfront costs of initial setup (building, electricity, and a steady internet connection), the functionality of the platform (research and developmental investments), maintenance (bug fixing and continuous support), OTA updates (Over-the-Air Support), purchasing a license of hardware and various security protocols to protect your application from malicious threats, mobile app user experience, and the cost of staying on top of the competition. These costs will be unpredictable and recurring, increasing your allocation of ROI because of unforeseen dependencies, tackling regulatory issues, or technical complexities which will delay your product’s time to market.
Buy: To buy an IoT platform, TCO will be less and your prime focus will be ROI. You will pay a monthly subscription for the services the platform provides and the subscription is usually quite flexible to suit emerging startups and students. The cost of ownership will be transferred to the platform maintainers. All the technical updates and management will be handled by them automatically freeing you from all the hassle and your time and efficiency will be deployed on marketing and promotions. Hence buying can surely save you from a bunch of stuff you do not want.
I can also suggest a few tools you can use to get this math right. MachNation has a TCO Calculator to help enterprises understand the total cost of building an enterprise-grade application enablement platform as well based on a five-year timeline. Azure also has a TCO Calculator that gives accurate reports by analyzing the specs of your data.
Unless you’ve already launched successful connected products, it’s unlikely that you have all the technical expertise in-house to create a high-quality IoT product, especially at scale. You might be a team of super geeky tech people (like we were) but putting that technical expertise into use in the right manner counts, and the first time is always tough.
Build: You’ll be writing and updating your custom code, as well as maintaining your infrastructure over time to achieve all this. You will need to hire temporary IT staff or you can reassign your current staff to perform all the functions needed for the building of the IoT, but then who will take care of the crucial functions that those engineers are performing today? Because building an IoT platform is not your initial goal, hosting your product is.
Buy: To buy an IoT platform, you don’t need to have a highly skilled team of engineers, developers, or DevOps in the first place. It will save you quite a lot of money and protocols.
When an idea is pitched forward, the target launch date and investment parameters are taken into consideration.
Build: It can take approximately from a few months to a couple of years considering the size and technical capabilities of your team, design, and complexities of the project. No matter how smart or skilled your team might be, unless they’ve already built an IoT platform together, it will take time to get it right.
Numerous projects die out before they reach the market and it is due to technical delays in the development of the product requiring a steady team and a budget.
Buy: Buying the solution can decrease TTM by 90%. It is an underlying fact that the world is dynamically progressing and technology waits for no man. Therefore, it’s utmost essential to minimize time-to-market. The time to implement might be at most a couple of months including the time it takes to evaluate the specifications of the platforms and to launch it internally. For example, Indeema has created a valuable IoT project calculator to give us an estimate of the amount of time it takes to build an IoT application.
If you are looking at a tight roadmap and your organization considers speed development essential, buy is indisputably the better option. Buy whatever you want and get, set, go!
Build: While building the original prototype you can opt for a customized edition. You can add unique features and tailor them according to your customer’s requirements and market trends. As you will be your own boss, you can build it in such a way that it works seamlessly with all other processes, tools, or software in your stack.
Buy: When buying the right IoT platform, the customization factor is limited. Everyone acquiring this platform from the service providers will have the same customization so your chances of gaining a competitive advantage are slightly lower. But this varies from platform to platform too. For example, while Grandeur gives you the tools to quickly prototype, when you are ready, you can build custom apps to suit your needs too.
In a nutshell, startups and students working on a small scale should buy the IoT platform as it's more feasible w.r.t. the time and cost complexity. And even companies working on a large scale, which can afford and consider all the differentiating parameters, still can build early prototypes with an IoT platform, until they are satisfied with their Proof of Concept.
If you are super sure about what you want to build and what wonders it can do, go for it. Build your IoT startup on the base of the long term vision you have for it. That is also what we did.
Grandeur essentially stemmed from a smart home technology project and developed into a platform as a service startup when we felt the need to make the same technology, which powered our hardware product, accessible to everyone else. We started on the hardware from the university dorm, iterating on its design, how it communicated over the internet, and continuously improving its latency. But by the time we reached a Minimum Viable Product (MVP) 16 months later, we had exhausted all our finances. Thus we realized that there is an urgent need to fulfill the gap in the IoT sector because even bootstrapping an IoT project meant investing a great deal of time, money, and energy.
Thus buying what you need will always be the easier, more go-to solution. The landscape of buying is not very restrictive and offers a wide range of customization you need. Buying also provides that flexibility for enterprises or individuals to decide whatever next decision they want to make, with less baggage and more time at hand.
It would not be wrong to say that buy what you can and build what you must, to succeed in the IoT market. There are hundreds of platforms you can choose from, here's a list of the best of the best.