Choosing The Right Connectivity Infrastructure for Your IoT Application

Transcription

1 Build vs. Choosing The Right Connectivity Infrastructure for Your IoT Application The People Powering IoT

2 INTRODUCTION Five years ago, the decision of whether to build or buy a connectivity infrastructure was relatively simple. Build. However, that assertion is a bit of a misnomer, because until recently, purchasing the solutions necessary to power Internet of Things (IoT) applications simply wasn t an available commodity. As a result, only the largest organizations - with the financial resources necessary create an infrastructure from scratch - enjoyed the benefits of machine-to-machine (M2M) connectivity. The learnings we ve gained partnering with businesses of all sizes throughout many industries are shared in this guide. It s our hope that it will equip readers with the insight necessary to make a connectivity decision that propels their business forward with cost savings and efficiency. As we now know, there are scalable connectivity options available to businesses of all sizes, which has accelerated IoT to near-ubiquity across enterprises. Now that a Build vs. decision exists, it s increasingly important for organizations to consider the merits of both options and choose the infrastructure that makes the most sense. Alex Brisbourne CEO, KORE Wireless Group Inc. 2

3 CHOOSING THE RIGHT CONNECTIVITY INFRASTRUCTURE FOR YOUR IOT APPLICATION Whether as broad as a healthcare system or as finite as a kiosk-based retailer, organizations understand their products and services inside and out, and they are increasingly developing Internet of Things (IoT) applications to make their offerings stronger. Organizations understand their products and services inside and out, and they are increasingly developing IoT applications to make their offerings stronger. As these applications move from a cool differentiator to another non-negotiable aspect of doing business, organizations are adopting IoT at a dizzying pace. Gartner estimated that by the end of 2016, 6.4 billion devices will be connected to the internet, with that number exploding to 20.8 billion by At the core of any new technology decision, organizations grapple with a simple question: Should we build the infrastructure to connect the application ourselves or buy it? 3

4 THE CONSIDERATION OF SCALE Both sides of the Build vs. ledger carry distinct benefits, which are magnified depending on the unique nature of each business. Understanding which decision best positions an IoT application for success is an important first step. A critically important consideration in the Build vs. debate is scale; the number of devices you need to connect has a significant impact on your decision. Very often, the economic sweet spot for building begins at around 2,000-5,000 connected assets. Below that threshold, the cost points associated with building are too high to be economically feasible. That said, there are outliers to this assertion. For example, consider a renewable energy project: While a utility company may have only 50 connected windmills, each one could be valued at millions of dollars each. In this scenario, it may make sense to build. At the other end of the spectrum, buying might make sense for a connected DVD rental machine company with tens of thousands of units. There aren t landlines for the machines to connect to at a mall or grocery store and connectivity isn t a part of their core competency. They simply need to connect machines, and rent DVDs. Ultimately, the issue of scale should be considered upon the backdrop of how the benefits of Build vs. interact with the specific nature of each business. 4

5 BENEFITS OF BUILDING Building connectivity infrastructure for an IoT application means starting with only a concept and building a wireless ecosystem, brick by brick. While the process is difficult, there are benefits related to building from the ground-up. Initial Cost: Upfront expenditures can be a critical factor in deciding whether or not to move forward with a project. The average cellular module, depending on whether it is 2G, 3G, or LTE capable, plus additional required components, is typically under $100 per unit. Having complete ownership allows the company to protect their innovation and prevent competitors from replicating it. Purchasing an off-the-shelf system can range from $200-$600 per unit. Ownership of Intellectual Property: Having complete ownership of a connectivity infrastructure can give organizations a competitive advantage, as it allows the company to protect their innovation and prevent competitors from replicating it. Organizations that start from scratch have the advantage of owning every aspect of the process and can use proprietary intellectual property to its own benefit. This is not a consideration when buying, as the purchasing organization has no part in the development of the connectivity innovation. Brand Fortification: More and more, organizations are branding themselves as tech or software companies instead of the actual product or service they offer. For many organizations, building a wireless environment that supports their connected devices is tied to their branding. Purchasing components that facilitate connectivity will not support such claims of internal innovation. 5

6 BENEFITS OF BUYING While purchasing an off-the-shelf solution does not offer the innovative recognition that building offers, there are a number of very real advantages to buying, all of which revolve around cost and efficiency. Speed of Implementation: The marketplace moves swiftly, and implementing an IoT application that keeps pace with the speed of business is critical. By purchasing connectivity assets, organizations can more efficiently put their game-changing application to use, as opposed to waiting for an infrastructure to be built. Creating a wireless environment takes time and comes with technical setbacks that can drastically delay the process. There are a number of very real advantages of buying, all of which revolve around cost and efficiency. Technical Support and Revisions: At some point, assistance from engineering experts will be required to quickly resolve any number of technical problems to avoid an interruption of business. And as is the case with any application, the first version is never the final version. Such revisions typically require a reworking of the original infrastructure. When purchasing routers or gateways, technical support is folded into the initial cost, which allows organizations to sidestep hiring additional staff. Application revisions can be easily and quickly accommodated. If looking to create a wireless solution from scratch, companies need to build an entire ecosystem. This includes wireless design, mechanical and software experts. Another option is hiring a third-party design company. Either option can cost hundreds of thousands of dollars. Certification: Most countries have their own in-country certification for wireless solutions (the FCC in the U.S., for example), which requires a wireless environment to be compliant or they run the risk of being shut down. Further, carriers themselves have certification requirements to have a device on their network Routers and gateways that are purchased arrive certified and no further action is necessary. It is necessary to either hire or seek out third-party certification experts, and certification itself comes with a series of fees. 6

7 CONCLUSION For some companies, owning intellectual property and maintaining a reputation for owning every aspect of its innovation is a non-negotiable, irreplaceable aspect of their brand. And because of the scale of the IoT application they are implementing, the costs associated with building a wireless infrastructure are often well worth the investment of additional staff or third-parties to to design and maintain it. For many other companies, those costs simply outweigh the benefits associated with building. Being able to quickly implement their application and having the support of a third-party to assist with technical issues and app revisions is a more profitable venture. Ultimately, the Build vs. debate comes down to what makes the most sense for the unique nuances of your organization. For companies looking to build, KORE can assist with certification, application testing and a wide array of custom design options to help get applications to market faster. And if buying makes more sense, KORE offers plug-and-play, bundled IoT solutions consisting of connectivity, hardware and professional services via distribution agreements with leading original equipment manufacturers. To learn more about your IoT wireless options, visit 7

8 Want to find out how KORE can help your business? Contact one of our connectivity experts today. (877) 710-KORE