Total Cost of Ownership in IoT

Total Cost of Ownership Contributing Factors

There are a number of factors in an IoT solution that contribute to the total cost of ownership; these costs typically fall into the following areas:

• Device Costs
  Device costs include the expense of purchasing IoT devices, sensors, and any additional hardware. Depending on the complexity and number of devices, this can make up a significant portion of the TCO, especially when factoring in device lifespan, replacement, or upgrades.

• Installation Costs
  Setting up IoT devices often requires specialised labour, physical installation, and possibly calibration or configuration in the field. These upfront costs can vary significantly based on the scale of deployment and the complexity of the environment.

• Connectivity Costs
  IoT devices need reliable network connectivity to transmit data, which may require cellular, Wi-Fi, or LPWAN services. The ongoing cost of maintaining this connectivity (such as data plans or bandwidth consumption) can significantly impact TCO, especially in deployments with a large number of devices or remote locations.

• Maintenance and Support
  Ongoing maintenance is critical to keeping the IoT system operational, from replacing faulty hardware to troubleshooting connectivity issues. Support services, such as software updates, repairs, and customer support, also add long-term costs, which can escalate with larger deployments.

• Data Management
  IoT solutions generate vast amounts of data that need to be stored, processed, and analysed. The cost of cloud storage, computing resources, and data processing infrastructure can be substantial, especially if advanced analytics or machine learning algorithms are applied.

• Security
  Protecting IoT devices, networks, and data from security threats requires investment in encryption, authentication protocols, monitoring tools, and compliance measures. Security breaches can lead to costly remediation and impact the overall reliability and reputation of the system, as well as increasing TCO.

• Software Development and Integration
  Developing custom software to manage IoT devices, analyse data, and integrate with existing enterprise systems is another key cost. This also includes ongoing updates, bug fixes, and integration with third-party services, all of which can drive up the TCO.

• Scaling
  As an IoT system grows in size, costs associated with scaling up infrastructure, bandwidth, and data processing increase. Scaling introduces new complexities that affect all aspects of the system (hardware, software, connectivity, and support), leading to higher long-term costs.

The Conference

The Things Conference is a single-track two-day conference that features keynotes, talks, podcast records, roundtable discussions, and workshops.

We flew into Amsterdam on Tuesday, to get ready for two days of intense back-to-back conference sessions. On Tuesday evening, we were able to meet up with Filip, one of our interns who is currently studying for his Masters in Amsterdam.

The first day of the conference started with an opening keynote that focused on the importance of understanding and controlling the Total Cost of Ownership within an IoT deployment. With the IoT sector growing 20% year-on-year, controlling and successfully managing TCO becomes critical for operating IoT solutions at scale.

The talks that followed delved even deeper into the IoT landscape, discussing topics such as:

• Zero Touch Provisioning
  Zero Touch Provisioning (ZTP) refers to the automated setup of devices on a network without the need for manual intervention. It allows new devices to be configured, updated, and deployed automatically when connected, streamlining the onboarding process, especially in large-scale deployments.

• IoT Device Implementation Strategies
  The cost of IoT devices can vary significantly depending on the design approach. Using a fully discrete design, where individual components like microcontrollers, sensors, and passives are separately assembled, tends to lower component costs but increases the complexity of design, manufacturing, and size, potentially leading to higher total costs in terms of development and assembly. In contrast, using a System-on-Chip (SoC) combined with Integrated Passive Devices (IPDs) or System-in-Package (SiP) modules simplifies the design and manufacturing process, reduces the device footprint, and lowers time to market, though the initial component costs may be higher due to the integration. Choosing the right approach depends on the scale, time-to-market priorities, and design complexity.

• The Role of IoT in Managing and Builds Estates
  IoT can revolutionise building and estate management by enabling real-time monitoring and automation of critical systems such as heating, ventilation, lighting, and security. Sensors and connected devices can collect data on energy usage, occupancy patterns, and environmental conditions, allowing for more efficient energy management, predictive maintenance, and enhanced security measures. Additionally, IoT can streamline operations by automating tasks like access control or facility booking, reducing operational costs while improving tenant comfort and overall building performance.

• Measuring Temperatures in Harsh Environments
  Measuring temperatures and sensor values in harsh environments presents challenges such as extreme temperatures, moisture, dust, and chemical exposure, which can degrade sensor performance or lead to inaccurate readings. Sensors can sometimes need specialised protective enclosures or materials to withstand these conditions, but even with protection, the harsh environment can cause drift or failure over time. Additionally, ensuring accurate calibration and maintaining stable communication in remote or inaccessible locations adds complexity to the design and maintenance of sensor networks in these environments.

• The Role of AI in IoT
  IoT solutions often require a more considered approach to AI technologies, given the low-power, resource-constrained nature of edge devices. Therefore, a combination of edge and cloud processing can often provide an optimal solution with more simple AI model inference occurring on the edge device, and using the cloud as a secondary step where models with more resource-intensive inference can be used. This hybrid approach balances performance, bandwidth, and efficiency, enabling responsive decision-making at the edge while leveraging the cloud for complex analytics.

• Maintainable Infrastructure for IoT
  The ability to monitor remotely, perform remote diagnostics, and ensure backup connectivity is crucial for the maintainability of IoT infrastructure, as it enables timely detection and resolution of issues without the need for on-site intervention. This reduces downtime, minimises operational costs and TCO, and ensures continuous connectivity, especially in critical or hard-to-reach environments.

With the theme of the conference focusing on Total Cost of Ownership, the second day featured similar topics in the talks, examples, and use cases that were covered on the second day. One notable talk looked at how a Museum was using IoT to monitor the location and condition of artefacts that were being kept in storage, as some environmental factors, such as humidity, can have adverse consequences on historic artefacts.

Conclusion

Attending The Things Conference was an amazing experience. It was great to be able to see the upcoming trends in the IoT space, and how IoT is having a growing impact on so many different industries and sectors.

A clear theme throughout the conference is that the connectivity, device provisioning, remote troubleshooting, and reliability of an IoT solution is a significant challenge for anyone looking to adopt IoT. Over the last few years, we’ve been helping customers across a number of different sectors overcome these challenges and deploy IoT solutions into the wild.

If you want to learn more about how we can help you on your IoT journey, get in touch!