Key Takeaways
- Initial costs of IoT projects are misleading; total ownership costs often outweigh upfront expenses.
- Only 0.4% of IoT deployments achieve the necessary connectivity levels, impacting business efficiency and profitability.
- Prioritizing connectivity and comprehensive planning can significantly reduce long-term costs and enhance scalability.
The Real Costs of IoT Implementation
Many businesses are realizing that the costs of implementing an Internet of Things (IoT) project extend well beyond the initial connectivity quotes. In the excitement to connect everything—from electric vehicle (EV) chargers to office vending machines—ensuring the best long-term value often takes a backseat.
This scenario mirrors purchasing a car: the sticker price is merely the starting point; ongoing expenses like fuel, insurance, and repairs quickly add up. Similarly, in IoT projects, the initial design, hardware, software, and partnerships with network providers should be considered comprehensively. Focusing solely on upfront costs can lead to significant issues down the line.
David Langton, CMO at Eseye, emphasizes that many IoT projects falter due to this short-sighted focus. A staggering 99.6% of IoT deployments fail to meet the required connectivity levels according to a survey of senior IoT decision-makers conducted by Eseye.
There exists a significant disconnect between businesses’ connectivity needs and what they receive. While 79% of businesses require their devices to be virtually 100% connected for their projects to be viable, the reality is stark—less than 0.4% achieve that level of reliability. Consequently, many organizations are beginning to feel that opting for a low-cost IoT connectivity provider may not be a worthwhile decision.
When devices go offline, businesses incur financial losses, and reputational damage occurs. For instance, if an EV charger fails to process a payment due to a connectivity issue, it not only inconveniences the driver but also undermines customer trust. In contrast, robust connectivity can facilitate entry into new markets.
Smart organizations are now prioritizing connectivity design even before creating a product. The asset tracking firm T42 provides a prime example; they have developed their devices to connect across various networks, accommodating options from 2G to satellite, ensuring functionality in diverse locations—from urban centers to remote areas.
Battery life also plays a key role in devices located in hard-to-reach places. For instance, water meters designed for 15-year lifespans can benefit from power-saving technology, which extends battery life by up to a third, reducing costly maintenance trips.
Evaluating IoT connectivity cost savings in practical scenarios reveals compelling impacts. A global advertising company partnering with Eseye discovered it was on course to spend over £20 million on digital signage over five years. By consolidating hardware and improving connectivity efficiency, the company reduced this expenditure to £11.6 million.
Langton explains that enterprises are often lured by the lowest initial connectivity offers, but these rarely yield the best long-term returns on investment. To counter this, the Total Cost of Ownership (TCO) framework developed by Eseye provides clarity to executives, enabling them to make informed decisions. It transforms IoT from merely a cost center into a significant source of profitability and new revenue avenues.
In essence, understanding the total costs associated with IoT is not just a fundamental business strategy; it is crucial for building a lasting, scalable solution that genuinely fulfills its promise.
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