Why Should You Build Your Own IoT Platform?
Off-the-shelf platforms are popular and have cool features, and big companies are behind them — but these are weak arguments!
Let us begin with this recent news about a nasty surprise of subscribed cloud compute platform…
Lyft has to pay Amazon’s cloud at least $8 million a month until the end of 2021
In its IPO filings, Lyft says that it’s on the hook to pay Amazon Web Services at least $300 million through the end of…
While revealing some uncomfortable truths about the cloud computing industry, the writer says, “While it’s often billed as being cheaper than maintaining your servers in your own data centre, that’s generally only true at small scales. At larger scales, like that of Lyft, the costs can quickly add up to be significant.”.
As the writer continues to warn, “Take Lyft’s cloud situation as a reality check on cloud computing — both its promise for smaller companies, as well as the potential for it to be more expensive than many might think.”.
While the focus of this news is on general cloud compute, the IoT platform being one such a variety would have no different issues.
An IoT platform, in general, brings together capabilities of IoT devices (aka things) and cloud computing; and delivers them as an end-to-end service.
The reason why you might need a canned solution
More often, businesses select to go with a canned solution either because someone else convinced them to do so, or — there is no time available to anything else.
However, firefighting while dealing with competitors is one thing; planning strategically for the long term is another.
Canned solutions are often rigid and not easy to adapt or customize, yet businesses prefer them when there is a paucity of time.
For all other occasions, proper cost-benefit-analysis would drive the decision. And this is where time-cost-scale myth seeps in.
The myth of time, cost, and scale
The typical arguments for making or buying decision are always around three factors…
- Time to build versus purchasing and learning to integrate the existing platform
- Investment required to build versus buying or subscription price
- Scalability nuances for own build versus managed platforms
Let’s have a quick rundown on each of them…
Time & cost
As both these factors are interlinked, let us discuss them together.
Most of the comparisons are made by considering extreme scenarios, ie, you are buying wholly managed, and well-known platform versus you are building everything on your own from scratch (i.e. starting with hiring, etc.). This is often not the case. There is also an option, where a company may run parallel streams of development, and some of them could be outsourced for cost arbitrage.
The hiring of development teams is not always necessary; it may be already there.
And, not every platform needs 8 to 12 months of development. These days, with all the available technology and knowledge resources, maximum of 3 months is all you might need. It is the same amount of time and resources you would need to learn about off-the-shelf platform integration.
Traditionally, vendors have inflated time to build factor and required resources. This causes imbalanced cost-benefit-analysis and often tilts the decision in favour of the buy choice. If you use realistic estimates, there is hardly any difference.
Remember, some people often leverage your ignorance to sell you something.
The fact about technology is, whether you do it or someone else does it for you, it will still have the same set of challenges. If you are building an interconnected product or service (IoT is all about that), those challenges would always affect several aspects of your business. Not all those would be managed by your vendor when you buy the platform. This adds to additional complexity when you have to scale. So scaling nuances are not going away, whether you buy or build.
Not to forget the cost factor associated with scaling. Unlike an in-house build option, where scaling doesn’t affect per device connection cost all the time, with the subscription platform, it remains mostly linear. This means every time you scale, costs are bound to skyrocket, and there is not much room to negotiate (as most of the times, contractual lock-in would prevent it).
The hidden simplicity
The real IoT platform at its core is not a spaceship. It is a relatively simple architecture. However, it is a smart architecture you must admit.
Every IoT platform has smartly integrated software service components viz. gateway (or rest API at the edge), message broker, authentication and authorisation mechanism, device registry, device twins (aka copies or shadows), and rule engine. Compare several off-the-shelf IoT platforms available in the market, and you will see that all of them have modules mentioned above. Any other additional modules are not must-have parts.
If you embrace the fact that at the core of the IoT platform lies simplicity, then you would see that it is relatively easy to build and maintain control on your product ecosystem, rather than sharing it with the third parties.
Think deeply and carefully
If you have decided to build your own IoT platform and some experts are trying to talk you out of this…
Let them ! — That is all I can say at the outset; however, think deeply about why others are trying to talk you out of building your own IoT platform. What is their argument? If you clearly understand the reasoning behind the suggestion to buy an off-the-shelf platform rather than build your own, then it will make better sense.
Off-the-shelf platforms are popular and have cool features, and big companies are behind them — but these are weak arguments.
The problem of legacy lock-in
One of the critical issues with freemium and off-the-shelf platforms is a lock-in. Even if it claims to be easy to detach and go elsewhere, in practice, it is far from easy to do this. You would be better off building your own than carrying the risk of being locked in.
There is also the threat of having a legacy lock-in; that is, you will find it extremely difficult and expensive to change the underlying technology in the middle. Once you are set, that is it: no changes until you upgrade. This is not the right choice, in my opinion. But, if you are not interested in the ongoing maintenance of your platform, no matter how small that may be, you may want to think twice.
You should factor in the threat of having a legacy lock-in. With off-the-shelf or third party platforms it is always higher as compared to your own build.
Level of control is the real deal
If your business needs a high level of control and high levels of security over the data and overall infrastructure, building your own is the best option. Let the experts know this.
The amount of money that you want to spend on building your platform versus the amount that you can save by buying off the shelf or by subscribing is a classic argument. Many experts do not account the total cost of ownership, ie TCO. This builds up over time, and at the outset, justifies the contrary decision. The argument that managing your platform consumes valuable time, while a managed platform gives you time to do other business is a fallacy. You end up managing managed platforms in one way or another without realising it. So, the proposition is not so different, after all. If you are having second thoughts, do the cost-benefit analysis over a longer term, like seven to ten years, and then see what makes sense. If the subscription or buying option is still lucrative, make a move.
See who these experts are, who are talking you out of building your own. Check where their vested interests lie. Seek independent opinions, do the objective evaluations, and then make the call.
Why the book?
I wrote this book as I saw many start-ups and SMEs struggling to understand the IoT platform landscape. State of the play has not been balanced, where many vendors have been convoluting the offering to make it look like the only greatest thing built ever.
For short-term gains, they have raised artificial constraints and showed superficial problems, which only their offering can solve. Interestingly, many of them also have white papers published that show how and why buying (from them) option is better than building option. Somehow conflict of interest hasn’t been particularly evident with those publications though.
Freedom and Learning
Freedom is a powerful notion and a word with deep meaning. Without freedom, we cannot reach our potential as individuals, as teams, or as a society.
This is why I wrote “Build Your Own IoT Platform”, which gives you the freedom to manage the complexity of IoT with ease. It gives you the freedom to choose your cloud, technology stack, and platform architecture. The liberty, to invent what’s next!
When you build your platform, you rise above the nuances of vendor dependencies & integration nightmares, shorten the learning curve significantly, and focus on what every business wants & needs — a thoughtful design, complete control, and predictable performance of IoT solution.
I believe that businesses should be empowered, then only progress can be expedited, and this book is a humble attempt to do it.
I invite your views and feedback, in support of my argument or otherwise. There are multiple angles to debate Make or Buy argument; let’s see them all.
Note: Part of the article includes an extract from my book “Build Your Own IoT Platform” and it has been edited to suit the context. The book is available on the Apress website here, Amazon here, and Knewron here.
Ref: Tamboli A. (2019) What We Built and the Takeaways. In: Build Your Own IoT Platform. Apress, Berkeley, CA, pp. 204–205.
About the Author: I am an entrepreneur, business & technology advisor, a published author, futurist, and emerging technology expert. I help companies to improve critical metrics by finding significant problems and then solving them in innovative ways. Sane and sensible adoption of technology continues to be my area of focus.