“Networking and communications are a crucial part of the overall IoT business solution, even if they are likely to represent only a fraction of the cost of IoT projects. Machine-to-machine (M2M) communication services are mature and have been around for years; however, not all providers are equipped to deal with the complexities introduced by IoT. Elements that influence the cost and choice of service providers include:
- The number of endpoints covered by the communication services
- The volume of data transmitted
- The networking technology adopted — standards are evolving, and new and cheaper options are becoming available
- The geographical spread — add-on services to coordinate initiatives that span across multiple geographies are starting to emerge
- The disaster recovery capabilities
- Communication gateways for initiatives involving multiple, nonhomogeneous endpoints
- Billing requirements
- Reliability and SLAs on latency or other characteristics on the service
Service providers are increasingly broadening their offerings to include adjacent services, such as device and system management, application management, security management, analytics and reporting, and program and financial management. Some of these activities overlap with other opex in our budgetary list.
As complex as this may be, organizations should think what the cost of downtime for their IoT projects would be to determine the risk of investing in the initiative.
Incremental Value of IoT Initiatives
At times, the full potential of your IoT project will be realized incrementally over several implementation phases, beginning with the benefits that result from the more-localized capabilities that are subsequently expanded via ever-tighter integration with back-end systems and data. This needs to be considered, as organizations try to determine the cost and ROI of their initiatives.”
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