Build or Buy an IoT Platform? What Enterprises Should Consider Before Diving In

Once your company has decided to use an IoT platform, the next question you usually face is: build or buy? This is a short overview of the strategic decisions to make prior to settling on an approach for your enterprise platform. Both building a custom platform from scratch and investing in new technology have their advantages. Ultimately, however, it is business goals, in-house expertise, and cost that will play a role in making that decision.

Typically, enterprises decide in favour of building an in-house platform that can be tailored to their specific situation and requirements. It is a common belief that building offers more flexibility and lessens the risk of losing assets or know-how once you decide to jump platforms. The question of interoperability is looming large too. Many enterprises are concerned about opting for a vendor that locks them into just one way of doing IoT. 

So why do so many enterprises turn to the IoT platform market? For one thing, while in-house teams may be able to build an IoT platform, many enterprises simply do not have the luxury of time to invest in such a large-scale project. Building a mature IoT platform can consume several years and while building, the existing IoT solution may become obsolete.

Keeping current with new IoT technology and remaining on top of user expectations is an additional effort. Then again, this is a significant investment in human resources that is better spent elsewhere. 

Build or Buy an IoT Platform: The Factors 

Ultimately, the decision to build a platform on your own or to turn to one of the many IoT platform vendors is a very individual one. It is tightly related to each company’s business ecosystem and current growth trajectory. Your enterprise may have unique challenges that cannot simply be addressed with a ready-made solution, no matter how customizable. So here are the major factors that play a role in the decision to build or buy:

Scoping up 

First, scope up the technical issues and the various unexpected dependencies that prop up when you build a complex IoT product. No technical challenge is entirely unique. It may be the case that what you struggle with is easily solved with standard IoT software. A standard IoT platform is how you handle complexity on a variety of levels. It may cover anything from security to regulatory concerns across different geographies, saving you a lot of time and hassle. 

But then again, you may encounter issues that have not been addressed with existing IoT platforms. And you may be confident that you can address data governance problems using your in-house resources. In such cases, you may want to build your own platform.

Level of control & customization

One of the greatest advantages of an in-house IoT platform is the unparalleled level of control that you get. You do not depend on external know-how and have access to the code at all times. You can tailor the platform to deal with your organization’s specific challenges right away.

This means, however, that you will also heavily rely on the support of your developer team. At times, losing your developer talent means being left with thousands of lines of unusable code. That may have to be rewritten or rebuilt from scratch if you lose your experts. 

With a commercial IoT platform, you may not have the same level of access. But you will be able to work closely with your vendor toward customization that meets your goals. 

What level of customization you need is another question to ask within the build or buy context: IoT platform vendors can adapt their offering to customer needs quicker than others, and if nothing else works, the remaining option will be to build. 

Cost considerations

Cost, together with an unclear implementation timeline, remains a top concern for organizations seeking IoT enablement. Purely depending on local know-how naturally seems cost-efficient. It gives companies the leverage to devise their processes from the ground up and decide where to spend. But in-house IoT development may turn out to cost much more than expected because of unforeseen dependencies, tackling regulatory issues, or technical complexities.

Using an external IoT product, on the other hand, is known to come with installation fees, annual subscriptions paid in advance, or other forms of upfront investment that may make a third-party IoT platform seem unattractive at first.

The bottom line: delays are the major reason for projects going way over their allocated budgets. After considering the costs associated with the initial setup and build, bug fixing, updates, support costs, and the cost of staying on top of the competition, most in-house IoT projects end up with significant spending and schedule overrun. 

Time to market

If you have a projected launch date for your IoT product, you will need to prioritize time to market over building a highly customized IoT offering. And this applies even more if you are looking at a tight roadmap and your organization is placing high importance on the speed of development. A third-party IoT platform will speak to your organization’s immediate needs and will allow you to progress fast. 

Hardware and connectivity 

The existing assets have to be compatible with the new solution. As different data packages come from different sources, you need to make sure you have a centralised place where the data is collected, consolidated, and transformed into something your teams can work with. 

Building your own IoT platform will guarantee that these requirements are met. But you will be put in the position of patching up together multiple disparate solutions to make things work.  

Most state-of-the-art IoT platforms today are equipped to work with any hardware. Vendor lock-in is becoming less of an issue. Now, a platform can consolidate and even serve as an extension of your ecosystem. You won’t have to perform deep structural changes to your existing architecture to accommodate the IoT platform. Rather, the platform will adapt to you.  

In-house know-how

Sounds quite intuitive. But you need to make sure that you are aware of the level of know-how you have in your organisation and the people you will need to make your platform work. Then you weigh in the time invested in building the platform vs. the time to be spent on other projects. And ultimately, there is a need to be clear on whether your team actually has the expertise to develop an IoT platform. 

Regulatory compliance & data governance

The build or buy an IoT platform decision depends on the regulatory and security requirements that you have to meet. And if you intend to run the platform in different geographies, see what kind of certifications you will require. If you decide to build, you will be fully responsible for certifying your product and meeting regulatory compliance demands that may extend all the way to the hardware. 

If you buy, you may have to work with your IoT platform provider and their regulatory teams to solve these compliance issues. You will have to consider ISO certification, security, and data privacy among others. And if you are in healthcare or military applications, the costs may go up even more. 

Maintenance & overall tech support

And then again, we get to the question of who is going to maintain the IoT platform. If you buy, you have the vendor’s support teams to deal with your technical issues or build additional features. Updates will be rolled out by the third-party vendor and you may have little influence on that. 

If you build, you need to have the people to maintain, release updates, and build new features as your IoT initiative evolves. This means a significant impact on internal resources. Especially if dealing with an enterprise-grade IoT platform deployed at multiple geographies worldwide. Plus you need to ensure the availability of expertise at all times. 

Start with the Record Evolution Platform

The Record Evolution Platform is your trusted ally in building and deploying market-ready connected products. Offering an accelerated timeline from PoC through implementation all the way to massive scale-out deployment, the platform consolidates your IoT assets to serve as a single source of truth for all your IoT operations. The shortened time-to-market allows you to build IoT solutions faster. Also, you offer new services to customers at a greater pace, all the while scaling comfortably as your needs increase.

The platform extends beyond the typical device management and connectivity solution. It offers a comprehensive all-in-one suite for IoT data extraction, IoT application development, IoT analytics, and various IoT services covering the entire ecosystem. Record Evolution offers a reliable infrastructure for IoT product development allowing different IoT experts to collaborate right on the platform. It gives enterprises a competitive advantage by making it possible to connect to any IoT device or piece of legacy equipment.

The platform serves as the solid foundation for the development of multiple use cases. These span asset tracking, predictive maintenance, smart cities applications, consumer IoT and beyond. Thanks to dedicated workbooks to build machine learning models and a cloud IDE for custom IoT app development, enterprises are poised to make the best out of their IoT investment.