The crucial IoT question: Make or Buy?

The Internet of Things has long since ceased to be a niche topic and is now considered an integral part of the digitization strategy within many companies. The key question that decision makers face when planning an IoT project is: rely on renowned specialists for IoT development, or do it yourself? In short: Make or Buy?
Make or Buy

The assumption is obvious that acting on your own initiative means saving money, since external costs for a third-party provider are eliminated. That’s an argument for DIY instead of buy. In addition to a lack of know-how, companies often lack sufficient budget, especially when it comes to security and scaling of their IoT platform, because whether it is operated on public clouds, private clouds, hybrid clouds or on premises, it is always a question of cost. Experience shows that the maintenance effort is significantly higher when IoT applications are operated in company-owned data centers.

Get off to a faster start with standards

These days, it is not a question of whether a company enters IoT, but how quickly. Anyone who can build on an existing IoT platform is definitely in the plus in terms of speed. Relying on existing standards and ready-to-use functions considerably shortens the time from product development to successful market placement. It is important that a standardized platform must also be expandable with new features and, above all, scalable in order to generate added value in the long term. We therefore recommend starting with existing products that can be adapted to the specific needs of the company and are able to grow with their requirements.

There is no “One Size Fits All” solution

The more sophisticated and specialized an IoT product or IoT service needs to be, the more advantageous it is to develop and implement an IoT platform independently.  In contrast to this, true modernizations or additions to existing business models can also be found in IoT. In these cases, it is advisable to rely on experienced IoT service providers in combination with an open IoT platform.

Buy or DIY
According to the Computerwoche study “Internet of Things 2020”, two thirds of companies surveyed work with external IoT partners.

Technical expertise and practical experience

However, what clearly speaks against development of a “home-made brand” is the lack of technical expertise in many companies. IT experts and even more IoT specialists are rare and hotly contested in times of the “War for Talents”. One possibility is to train your own employees with further education programs – but that takes time. Conversely, it also means that personnel may be lacking elsewhere in the company.

In fact, when it comes to “IoT – Make or Buy?”, only very few companies see themselves in the sole role of innovator. According to the Crisp Research Study 2019, most prefer a mix. Depending on the phase of the IoT project – from planning to implementation and operation – the combination of in-house services and support from IoT service providers may be different. The recommendation is therefore to bring an experienced IoT partner on board with the necessary industry knowledge and who can bring real implementation experience in IoT projects.

To conclude: The truth lies in the middle

Back to our original question: Buy or DIY? There is no clear answer to this question, both approaches may be correct. What matters is the initial situation and the company’s objectives. If the Internet of Things is still completely new territory, it is advisable to work with an experienced IoT expert. They can bring decisive know-how and can help to build long-term IoT competence in the company.

Anyone aiming for faster speed and time-to-market should also rely on existing open platforms. These, however, should be supplemented by company-specific features and applications in order to ensure long-term added value such as scalability. For most companies, a mix of in-house development and a partnership with an IoT service provider is probably the most effective way.

IoT-Studie 2020 Mockup - IoT-Trends


Read more about current IoT trends in the study “Internet of Things 2020”.

IDG Studie Internet of Things 2020
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