Since its inception, the Internet of Things (IoT) industry has created dramatic changes in the way businesses operate and how consumers approach products and services. However, despite its rapid growth which shows a skyrocketing demand for IoT applications in most fields, the effort to develop IoT applications is still a challenge. In particular, IoT development cost is a great concern for many business owners as it is perceived as costly. This article does not aim to give a specific figure on IoT pricing, but focuses on analyzing the factors affecting the formation of costs and proposing some solutions to minimize the investment when considering implementing an IoT platform or application project.
Overview of IoT and the Benefits of Applying IoT for Businesses
The Internet of Things is known as a network connecting devices and machines on a global scale through sensors, software, and many other technologies, allowing the collection and exchange of data among them without requiring direct human-computer interaction. It is predicted that, by 2025, human life will be surrounded by more than 21 billion connected devices in an IoT network. A complete IoT system needs to satisfy 4 operations: Data collection, data sharing, data processing, and decision-making.
With the ability to provide vast data sources and extensive connectivity features, the application potential of IoT spans many fields, especially for production and sales. The Internet of Things is an outstanding tool that promotes the creation of more valuable products based on a deeper understanding of collectible consumer behavior and at a high level of competition.
On the macro side, the Internet of Things allows businesses to move to remote operations, expand employee and customer engagement, and potentially new business models.
For businesses in particular, the advantages that the Internet of Things can bring are remarkable, including:
1. Cost-effective: As mentioned above, IoT connectivity enables the automatic collection, sharing, and processing of tremendous amounts of data, so miniature daily tasks can be reduced, lightening the burden on the operating system in terms of both resources and costs, as well as making work processes more manageable.
2. Improve operational productivity: Automating crucial processes applying IoT has improved operational efficiency, especially in the manufacturing sector. Equipment management, fault alerts, and ensuring uninterrupted operation cycles become automatic and straightforward. Real-time data collection also allows businesses to identify problems that need to be resolved and take timely action.
3. Improve customer service: IoT solutions allow businesses to collect information about customer data and behavior on interactive channels automatically and regularly. This data source grants enterprises the possibility to capture the factors affecting customer satisfaction, and demand trends, thereby adjusting services accordingly and devising strategies to navigate customer behavior.
4. Improve customer experience: The fact that devices are connected to each other on a network makes customer support activities faster and smoother, resulting in an enhanced user experience.
The benefits mentioned above are the factors that make many businesses not hesitate to invest in IoT solutions because of the long-term benefits and potential they create.
The main factors that constitute the cost of developing an IoT system
Back to the question of how much it takes to develop an enterprise IoT system. The honest answer is that “it depends”. Leaving aside the consideration of hardware factors, this article focuses only on development costs. In some recent studies, the price of developing an IoT system can range from $10K to hundreds of thousands of dollars – the gap can be seen as colossal. A few variables that directly affect the cost of developing end-user IoT applications will be considered in detail and separately below. These variables may be related to the IoT feature or developer.
1. Required IoT application features.
It is an application in nature, so typically, IoT is developed with a feature set that includes core features and enhanced features. The cost of a solution that includes only primary factors will be much cheaper than a complex feature set that includes many additional elements. Enterprises should consider the goals of the application and the requirements to save the initial investment cost.
2. Complexity of UX/UI.
An IoT solution, like any end-user application, has to take care of the user interface and experience. Of course, a beautiful and smooth interface and convenient interaction is what any solution owner wants, and makes the application appear more dynamic. However, that also means that it requires more complex design techniques and operations, and takes more time, which leads to higher costs.
3. Types of connected devices.
Building an IoT solution that connects a wide range of devices is demanding, so it wouldn’t be surprising if it costs more than developing a standard app specifically for mobile, web, or desktop.
4. Operating Systems and 3rd party integrations
IoT developed for any platform needs to be compatible with its operating system and middleware to ensure it can work properly and smoothly.
In addition, other factors have little impact on the initial investment cost for IoT development but influence your long-term goals of IoT applications that also require some attention. A separate section is described below on these hidden costs.
IoT Application Development Costs: Hiding figures
One of the requirements for the success of an IoT application is the ability to scale and scale. Providing that IoT solutions can bring the high and long-term economic potential for businesses, accounting for these capabilities at the beginning can help you avoid a large investment for upgrading and developing individual additions in the future. Take a close look at these two factors and some tips to sidestep these inflated costs below.
During development, at one stage, your system inevitably needs to handle the increase in the number of users, connected devices, and even features while still ensuring accessibility and performance. Therefore, it is necessary to calculate the scalability of the system. If your business omitted to calculate a ratio of the initial cost and the extra amount for the expansion, you may face an unexpectedly high additional cost. Not to mention the potential damage you’ll incur if there’s an upgrade interruption.
Changing requirements during solution development can lead to prolonged project implementation time as well as costs paid to implementation specialists, not to mention wasted resources for unfinished development.
Euristiq – a global leader in IoT – offers a way to avoid these unplanned costs by providing a Discovery phase at the start of a partnership and a Change Management Process that allows Enterprises to be flexible with controllable changes during system development.
At the Discovery stage, Euristiq experts will accompany the business, conducting a workshop between two parties to define specific requirements, project scope, and technical limitations. A detailed software requirements specification and roadmap, estimated implementation time, and cost estimates will be provided and agreed upon with the customer. Euristiq aims for a committed, transparent partnership with measurable results where both developers and customers understand specific feature expectations and implementation steps, avoiding potential pitfalls that cause the project to protract or interrupt midway. Customers can also participate directly in the change management process where they can propose and approve after receiving the cost and time recalculations from Euristiq.