IoT device generates a running cost for the service provider.
That fact is often overlooked by companies during PoC verification. In the long run, a connected device might cost more to operate than the income it generates for its provider.
At a minimum, every connected device requires:
- connectivity to send telemetry data to a backend system
- processing capabilities of a backed system to analyze the telemetry data
- storage capabilities of a backend system to store data
- personnel to support customers and maintain backend infrastructure
Depending on the specific service/product, the above cost factors may differ. What remains true is that IoT devices generate some cost every month they operate.
How can the service/product owner deal with that cost?
There are many strategies, for example:
- pay per event (the same way as we used to pay for mobile services)
- monthly/yearly subscription
- estimated device lifetime operational cost included in the price of a device
Which approach to choose depends on the specific product or service that you offer.
The bottom line is that you should include the running costs of your IoT devices when you design the business case.
