Cutting cost in Internet of Things (IoT) era

What if we took all the data coming out of our everyday devices and connect them? This means we can cook at home using our mobile phones while working at the office, turn on the heater before we get home, watch our children in playpens while we shop. We can have stock re-order levels for business programmed onto electronic shelves; we can have intelligent traffic lights that sync with ambulances on emergency response duty. Factories can run on autopilot and systems could replace fraught manual effort.

Everything, everywhere, can be ordered intelligently on the Internet. Wired describes this situation thus: In our houses, cars, and factories, were surrounded by tiny, intelligent devices that capture data about how we live and what we do. Now they are beginning to talk to one another. Soon well be able to choreograph them to respond to our needs, solve our problems, even save our lives.

In some ways, the IoT is already happening on a small scale, but the global integration of small and big data is yet to happen. Many intelligent embedded systems sit in manufacturing lines, production tables, homes and offices disconnected from a symphony of sorts that could emerge, where they are all hooked to intelligent robotic controls based on Artificial Intelligence (AI) over the cloud.

Every time technology attempts an advance by a new wave of learning, it is held back by some kind of fear, a fear with devastating consequences could befall mankind. That when the conscious web takes charge of lives, some ill-intentioned terrorists will crash a world wholly reliant on devices and the scare that devices will get a mind of their own and turn against man. Maybe, just maybe, it is the unpalatable concept of change, and the rigour that new thinking and ways of things will demand of humanity that irks.

Forecasts from International Data Corporation (IDC) indicate that billions of things will be connected worldwide by 2020, and companies are citing internal productivity and efficiency as the primary drivers for this momentum toward IoT investments.

However, there is a complex equation of factors to consider in a business plan, with unique challenges regarding Operations, Scale, Cost and Customer Service.

Where do the major business cost contributors lie in IoT?

Understanding the operational costs can help businessmen make smart decisions about the technology, processes and partners you need.

This will help businessmen ensure that their IoT initiatives run at the lowest cost, highest availability and provide the best customer experience.

Top operational costs

Connectivity: 19-43 per cent of the costs are associated with connecting devices to the Internet; most often via wireless networks in a combination of local networks (RFID, Wi-Fi, ZigBee and others) and the mobile network (private or public)
Administrative operations: 15-28 per cent of the ongoing costs are associated with the day-to-day management and operation of IoT assets and business processes; structured life cycle management
Support: 10-28 per cent of the costs are associated with identifying, troubleshooting and resolving field-reported issues with the IoT assets.
Time to market: not only for the first minimum viable product (MVP), but also ongoing updates/upgrades. Impacting these costs are implications associates with the time to provision devices with services and testing devices with services before deployment.

These costs summed together make a strong case to leverage the benefits of a dedicated IoT platform solution using software as a service (SaaS) or platform as a service (PaaS) model.

PaaS vs self-build

Infrastructure

A self-funded developed platform can cost upwards of R2-3 million taken over then first 12-18 months to reach a MVP.

Compare this to a value driven per device per month fee model, which could cost 10-15 per cent per annum less for a 1,000 device network over the same period; and can easily be operational in just a few weeks.

The opportunity costs lost in the self-build platform can never be caught up, says Andrew Groves of Trinity, who works with customers to develop intelligent, connected IoT solutions.

Similarly, starting business operations on either a savings or new revenue model in month one can easily realise your business case objectives while the platform capabilties keep evolving too.

As such, a PaaS system can amount to 33per cent direct savings over self-build infrastructure, while allowing you to choose from multiple local and international mobile network operators (MNOs) connectivity networks.

Companies of all sizes, across industries, can use an IoT service platform to capitalise on IoT and get the most out of their things by getting them connected, Andrew added.

Choosing IoT provider

To choose an IoT provider, look for real-time based monitoring and control; past history and deep experience cannot be substituted when considering an IoT partner; know your core competency, and leverage a platform for supporting elements; and having tools for full life-cycle management on all aspects will simplify operations massively.

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