IoT Platforms: Pricing Models, Types, and How to Select

Introduction

Developers can create solutions tailored to IoT tasks by leveraging middleware, such as IoT platforms. These platforms enable developers to create, test, deploy, and scale IoT-specific software systems in a timely manner.

With so many options, deciding on the best IoT platform for your business can be difficult. In this article, we will look at key considerations and evaluation criteria to help you make an informed decision and select an IoT platform that fits your company's needs and goals.

1. Understanding the Role of IoT Platforms in the Internet of Things Architecture

To understand what is IoT platform and why they are crucial, let us first look at the general architecture of IoT systems, which usually have the following layers:

1. Device Layer: Devices such as sensors and actuators convert physical parameters to digital data.

2. Connectivity Layer (Gateway Layer): This layer handles communication between devices, networks, and cloud services using TCP/IP or gateways.

3. Edge Computing Layer: This layer pre-processes data from adjacent devices to increase response rates.

4. Platform Layer: This layer collects, processes, and stores data while also monitoring resources, updating device software, and ensuring security. Most modern IoT platforms run on the cloud.

5. Application Layer: This layer interacts with end-users. Some IoT platforms offer low-code development options, while others require highly skilled developers. Some cloud platforms also offer IoT-enabled application building services.

2. Harnessing the Power of IoT Platforms Across Industries

Determining when an IoT platform is necessary is not a straightforward answer since there is no one-size-fits-all solution. The decision ultimately relies on the specific business requirements. The applications of IoT platforms are numerous and can be used by a variety of industries, including smart device suppliers and manufacturers, automation and control of production in Industry 4.0, and eco-monitoring in the healthcare industry. It is useful to identify the key areas where Internet of Things platforms are utilized to determine whether a business should switch to an IoT platform, depending on its scale.

2.1 Consumer Electronics and Wearables

For consumer electronics and wearables, IoT platforms are necessary for remote control, real-time monitoring, message customization, and integration with other devices. For developers of smart home solutions and wearable gadgets, such as smartwatches and bands, the use of IoT platforms is essential.

2.2 Industrial IoT (IIoT)

Industrial IoT (IIoT) solutions offer a broad range of applications, including equipment maintenance optimization, real-time data collection and analysis from sensors, and cost reduction in industrial sector activities. An industrial IoT platform can be beneficial for production and warehouse hub owners looking to reduce costs in areas such as industrial security systems, predictive and remote maintenance, energy optimization for production, smart factory warehousing, asset tracking and smart logistics, and transportation monitoring.

2.3 Healthcare 

IoT platforms in healthcare can revolutionize patient care and treatment by enabling real-time monitoring, data collection, and analysis. These platforms can provide doctors and other medical professionals with critical insights into a patient's health and help them make informed decisions about treatment plans. Additionally, IoT platforms can automate many routine tasks, such as medication reminders and scheduling appointments, freeing up healthcare professionals to focus on more complex tasks.

2.4 Agriculture 

Internet of Things platforms in agriculture can help farmers optimize crop yields, reduce waste, and improve sustainability. These platforms can provide farmers with real-time insights into soil moisture, temperature, and other environmental factors, enabling them to make data-driven decisions about irrigation, fertilization, and pest control.

2.5 Governmental Organizations

IoT platforms in government can enable data-driven decision-making and improve the efficiency of public services. IoT platforms can help in ensuring safety on city streets and buildings, environmental monitoring, and intelligent monitoring of electricity and water networks to build new types of smart cities.

3. Types of IoT Platforms

The overall architecture of IoT systems comprises various components, including hardware, software, data warehouse (local or cloud), end-user applications, and resource monitoring. Depending on the aspects of development they cover, IoT platforms are classified into several types:

3.1 Hardware-specific platforms

Such types of platforms are designed for specific device manufacturers and tuned to particular boards with microcontrollers, microprocessors, SoC or SoM. They are optimized for hardware but are not universal, which limits the system's further development and scaling, as it depends on the hardware manufacturer. Some boards and SoC manufacturers create their proprietary software as a backend IoT platform. However, if they are closed to other developers, it is debatable whether to consider them full-fledged IoT platforms.

3.2 Connectivity or machine-to-machine interaction (M2M) platforms

M2M platforms provide communication between physical devices and data centers (local or cloud), and transfer information between data centers. They rarely focus on processing and collecting sensor datasets. Regular technologies like SIM cards, Wi-Fi, Bluetooth, and known protocols such as MQTT, DDS, AMQP, LoRaWAN are used to transmit data.

3.3 Analytics platforms

These platforms use intelligent algorithms to analyze the collected data and determine useful parameters for customers. They also enable the visualization of integral parameters for human evaluation. This type of platform can often be supplied as IaaS for customer convenience.

3.4 Application development platforms

App development platforms serve as an integrated development environment (IDE) with tools and functions for coding programs. They focus on interaction with the end-user, often offer ready-made templates and layouts to simplify the task.

3.5 End-to-end IoT platforms

These platforms cover all aspects of IoT product development, monitoring, data management, and support. They offer a wide range of services and their ecosystem, and can help clients with tasks on all layers of the IoT system architecture.

The variety of IoT platforms demonstrates the limitless potential of this rapidly evolving technology. With so many platforms available, organizations can select the one that best meets their needs and aligns with their strategic objectives. 

4. Comparing Pricing Models of IoT Platforms

Monetization is a key consideration when it comes to the interaction between the customer and the platform vendor in the realm of IoT. 

Due to the unique nature of IoT, this interaction can take on diverse forms. Today's market offers a range of pricing strategies, some of which include:

⚈ Traffic-based pricing: Large suppliers often use this model, where payment is calculated based on the number and size of messages sent to and from IoT devices. Optimizing traffic at the edge can be especially beneficial for creators of IoT systems. Typically, processing and storage of data in the cloud must be paid for separately.

⚈ Connection time-based pricing: This is a widely used approach where cost is calculated based on the overall duration of the connection session.

⚈ Device-based pricing: Payment for services in this model depends on the number of unique devices connected to the platform. This approach is advantageous for systems consisting of a limited number of expensive devices.

⚈ Token-based pricing: IoT platforms based on blockchain technology can be paid for by the number of tokens used. Such platforms are considered more secure as they allow for tamper-resistant records of shared transactions.

In some cases, platforms use complex pricing rules that combine multiple approaches, adding more variability to the cost calculation. While this may make the calculation process more complex, it allows for greater flexibility in pricing.

5. Key Points to Help You Choose the Right IoT Platform

There is no one-size-fits-all solution when it comes to selecting the best IoT platform. 

When choosing a platform, it is important to consider technical capabilities, partner ecosystem, industry characteristics, and project budget. Here are some key points to keep in mind during the selection process:

1. The platform should support the hardware planned for the system and allow for convenient device management, monitoring, segmentation, and remote firmware updates.

2. The platform must be compatible with the connectivity methods and data translation protocols used in the system, including network coverage in the regions of business.

3. The platform should provide the ability to prototype and start data processing quickly to achieve results as soon as possible.

4. The IoT platform must provide continuous data access, integration with the customer's servers and clouds, and API access while ensuring data security, confidentiality, and protection against unauthorized access.

5. The platform should enable easy transfer of data to other applications to maximize its value.

6. The platform should offer various options for data analytics architecture, including edge computing for increased flexibility, bandwidth, overall performance, and reduced latency.

7. When choosing an enterprise IoT platform, consider its experience and service longevity, as well as its ability to evolve with the market and support new industry standards, hardware, and security approaches.

Small businesses can find cost-efficient options that better meet their needs, even by combining multiple platforms from different vendors. Meanwhile, large enterprises may prefer established, scalable solutions from major vendors, but they should be prepared for the cost.

Conclusion

In recent years, there has been rapid development in IoT platforms and the Internet of Things in general, resulting in improvements and the elimination of key shortcomings. New players are entering the market, offering their own unique features and providing better or cheaper services. This indicates a significant demand for such products currently and even more so in the future.

From the perspective of clients, this is excellent news, as more players in the market lead to greater competition, improved service quality, and a wider range of choices. However, with the growing diversity of options available, it is crucial not to get lost in the multitude of choices.