Ready-made vs. customized IoT solutions: What's the difference?

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More and more companies are turning to IoT solutions to optimize their processes. This is leading to increasing demand for solutions in a wide range of industries and use cases. The question of what the differences are between an IoT solution that is ready to use and an individual solution is addressed in this article. For this purpose, the advantages and disadvantages are considered in each case in order to be able to make the clearest possible decision at the end.

Advantages of ready-made IoT solutions

Out-of-the-box IoT solutions can usually be deployed directly in the field after a one-time payment or via a subscription. The application has been developed for the broad market or a specific line of business, which makes implementation very fast and easy. At the same time, the costs are lower. The goal of a company that develops software for IoT applications, for example, is to sell it multiple times. 

Customized IoT solutions

This can be very lucrative and at the same time reduces the costs for any company that wants to buy this software. At the same time, this allows a wide range of information to be collected, which means that the software can be constantly improved and becomes increasingly less risky due to the many different applications and corresponding adjustments. In addition, the buyer already knows before the purchase what he can expect and what not.

Disadvantages of ready-made IoT solutions

In addition to the numerous and quite valuable advantages of ready-to-use IoT solutions, disadvantages also arise. Sometimes it is enough to change the perspective to turn an advantage into a disadvantage. Especially the ease of implementation and the design of the IoT application that it could be intentionally suitable for many different companies ensures that flexibility in special use cases is missing. Customization could also prove difficult.

It is possible that providers do not even offer such a service. The individual customization could be subsequently added internally by the company if the provider of the IoT applications allows this. Even if such access is permitted, this would involve a great deal of effort, since the software, to stay with the same example, was written by a third-party company and thus lacks comments or understanding of the code. 

A lack of customization options can therefore impair compatibility, which in turn makes scalability more difficult compared to customized IoT applications. Another disadvantage of ready-made IoT products is vendor lock-in. Once one has decided on a provider, it would be difficult to change it for various reasons. 

Ready-made IoT solutions

If, for example, a smart home system has been purchased and one wants to change the provider, this is only possible by purchasing a new system, which represents a high cost barrier. This can also mean that another provider on the market offers new features for its smart home system. At this point, one does not have access to these, as one is tied to one's own provider. Again, the same cost blockade arises that one would have to overcome for these features. The lack of control through ready-made IoT solutions becomes apparent.

Advantages of individual IoT solutions

The benefits of customized IoT solutions are, as you can imagine, very extensive. Therefore, there will certainly be some advantages that are not listed in this section. Or the advantages relate to specific use cases and are therefore not generally understandable.

Individual IoT products, as the name suggests, are developed for a specific company or for a specific task of a business unit. This means that the product meets the requirements exactly and is therefore more effective than an already finished IoT application. This can ensure an optimal transition, for the integration of the product and the cooperation with existing systems in the company. In addition, the IoT application can be adapted as needed and optimized over time. The result is complete control over the hardware and software used. 

Particularly relevant for companies is the possibility of standing out from the competition. This can certainly be given by individual IoT solutions in order to gain a market advantage. In particular, if competitor companies are not technically up to date, the company can gain an advantage much more easily and quickly by implementing individually developed IoT solutions and their scalability.

Disadvantages of individual IoT solutions

The aforementioned advantages of individual IoT solutions are offset by a corresponding price. The purchase price in particular is significantly more expensive, as custom manufacturing can only be sold exactly once, resulting in immense costs for the company producing the IoT application, which must be paid by the buyer. 

In addition, such an individual development takes a lot of time, as the product conception often has to be started from scratch. This is particularly problematic if the desired product is to be available as soon as possible, which quickly creates a conflict between quality and time expenditure. Especially when the need for an individual IoT application arises and one would like to have it already implemented. In addition, it makes sense to work very closely together so that the end product meets the requirements as well as possible. 

Ready-made vs. customized IoT solutions

This means that not only the purchase price must be charged, but also the internal employee hours required. Particularly high risks arise with such individual products due to vendor lock-in, as it is almost impossible to change providers and this is associated with higher costs. The selection should therefore be made very carefully, bearing in mind that a low-cost provider can cost significantly more time and money if the end product does not meet the requirements.

Basically, it can be said that when deciding whether a ready-to-use application should be used directly or a customized IoT application should be developed, the time and cost factors in particular must be taken into account, as well as what the application should look like in the end.

Both models definitely have their raison d'être. Both individual and ready-made IoT products have advantages and disadvantages. Which is the appropriate choice should be assessed on a case-by-case basis. For simple issues and especially - if there are enough suitable products on the market - out-of-the-box IoT products can be a quick and easy solution. For highly complex topics and problems that require a lot of time and money, custom development may be the more suitable choice in the long run.

In general, it is important to know the advantages and disadvantages and to consider each situation individually in order to be able to make a differentiated decision as to which option is the better choice in each individual case. Let us find out in a joint demo which solution is best suited for you and your processes.

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Published April 27, 2023

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