Developing IIoT Solutions: When to Buy and When to Build

Why Trust Techopedia
KEY TAKEAWAYS

Although more industrial companies are implementing Industrial Internet of Things (IIoT) technologies, many don't know whether to build custom IIoT solutions, buy IIoT solutions that are commercially available, or take the buy-and-integrate approach, allowing them to customize the solutions and integrate them with their existing systems.

Although more industrial companies are implementing Industrial Internet of Things (IIoT) technologies, many don’t know whether to build custom IIoT solutions, buy IIoT solutions that are commercially available, or take the “buy-and-integrate” approach, allowing them to customize the solutions and integrate them with their existing systems.

Determining which approach to take depends on several factors, including the specific needs and goals of the organizations as well as their available resources, budgets, timelines, and necessary customizations.

Let’s take a look at these three approaches to developing IIoT solutions.

Build Custom IIoT Solutions

Developing custom IIoT solutions is a viable option for some organizations, especially if they don’t need highly-configurable systems and have in-house resources to build these solutions.

“Building a complete IIoT solution gives organizations the greatest amount of control and the ability to customize every aspect of their solutions to align with their needs and use cases,” says Brandon Satrom, vice president of developer experience and engineering at IIoT provider Blues.

According to Jimmy Asher, managing director and Smart Factory chief technology officer at Deloitte Consulting LLP, the primary reason that some companies elect to internally develop/build custom solutions is data control.

Advertisements

“Assuming cybersecurity standards are adopted by the development team, data can be tightly controlled with internal hosting or abstraction from vendor reliance,” he says.

Although building custom IIoT solutions in-house requires ample time and significant upfront investment, they give industrial companies unmatched control.

They also offer flexibility and the opportunity to innovate their businesses, says Jason Hehman, client partner and vertical lead for industry 4.0 at TXI, a product innovation company.

“In-house teams have the best understanding of their companies, their customers, and their existing problems around equipment, inventory, and the supply chain,” Hehman says. “For example, a specialized company that works with hazardous materials might opt for a custom solution to prioritize worker health and safety.”

Risks of Building Custom Solutions

However, organizations that take the build approach must use caution as in-house solutions are unlikely to scale – in terms of cost and solution space – unless top management funds and champions the build approach, says Daniel Young, senior manager of product standards at Toshiba America.

“Therefore, the build approach should only be used for small-scale, short-term, or proof-of-concept projects,” he notes.

And while building custom solutions in-house might initially seem like a great idea, that’s not always the case, says Bill Rokos, chief technology officer at Parsec Automation, a provider of manufacturing management software.

“Custom solutions often fail to deliver the intended return on investment, and they can consume valuable time, resources, and money that manufacturers aren’t keen on sacrificing,” he says.

“And custom-built solutions don’t progress alongside other technologies in the market, meaning they quickly become legacy systems through stagnation.”

Additionally, customization can create information silos that prevent data from being cascaded across an operation or enterprise, says Asher.

“These deployments can sometimes be siloed, especially when it comes to adoption and governance, and – while laser-focused on the upfront defined requirements – often have gaps in scaling across different needs and usage,” he explains.

Buy Commercially Available IIoT Solutions

According to Asher, there are several pros when looking at commercially available IIoT solutions.

“Commercially available IIoT platforms provide both pre-built functionality (and components) that can reduce the time and effort it takes to deploy the solutions,” he says.

“And since this is a rapidly changing space, commercially available solutions help reduce the risk and uncertainty in investment, as they are supported by the vendors’ development and support teams.”

This approach is most applicable for small or midsize industrial companies, says Khondoker Huq, global head of market strategy for IoT at AI and analytics provider SAS.

“They can benefit from buying commercially available (aka canned) IIoT solutions, especially when they often lack the industry and technology expertise as well as the IT and operational resources to do the integration work themselves,” he says.

Risks of Purchasing Commercial Products

Buying off-the-shelf solutions can offer quick implementation and reduced development risk, says Peter Swaniker, chief technology officer at Sand Technologies, an IT services and consulting company.

“However, organizations’ abilities to customize these solutions is limited,” he says. “And companies also have to depend on the vendors for support.”

While these commercial off-the-shelf solutions strive to provide some level of customization at each stage, they are specially built to be generic and applicable to the broadest set of use cases, says Satrom.

“As such, they can never be adapted completely to fit the unique device or cloud app requirements of most IIoT use cases,” he says.

Moreover, purchasing a complete IIoT solution comes with the inherent risk that the platform itself may not be around as long as your solution needs to be, Satrom adds.

“One needs only to look at the shifting of investment away from IIoT platforms inside of cloud hyperscalers to see the end-of-life risk inherent in purchasing a single solution,” he says.

Another major drawback is vendor lock-in, says Asher.

“Once a manufacturer has invested in a commercial IIoT platform, it can be difficult/expensive to switch to a different platform or potentially integrate into other platforms if necessary.”

According to Asher, cost can also be a consideration depending upon the platform, with both up-front licensing and scaling costs.

“Additionally, ongoing consumption costs may lead to barriers in scaling and [prevent] wider usage/adoption,” he says.

Off-the-shelf solutions also lack the capabilities required for complex challenges in specialized industries, says Hehman.

“For example, a smaller equipment distributor might buy remote monitoring equipment off the shelf, but an offshore oil rig operator would not,” he says.

In addition, vendor changes to their products, such as firmware updates and functionality changes, may break the functionality the customers originally purchased the solutions for, says Benson Chan, chief operating officer at innovation consultancy Strategy of Things.

“And organizations that purchase solutions from smaller or startup vendors run the risk that those vendors may go out of business,” Chan adds.

Buy-and-Integrate Approach to IIoT Solutions

According to Chan, organizations purchase commercially available solutions with the buy-and-integrate approach, customize the solutions (not configure), and integrate them into their existing operational processes and systems to create IIoT-enabled operations.

He says:

“Companies opt for this approach when they don’t want to reinvent the wheel of the basic functionality offered by commercial solutions.

 

“Rather, they want to focus their limited resources and time on building out the key or strategic capabilities and functionalities missing from those commercial solutions.”

The buy-and-integrate approach sits at the midpoint of the spectrum, says Satrom. And although this approach doesn’t have the benefit of speed afforded to a complete buy solution or the control of a complete build, it does offer several advantages over both.

“The majority of successful IIoT deployments take the buy-and-integrate approach as this approach allows organizations to build the parts of their solutions that are core to their domains,” he says. “And they can rely on providers to deliver the parts that are non-core, such as wireless connectivity.”

Taking the buy-and-integrate approach really does give manufacturers the best of both worlds, says Rokos. They can leverage industry best practices through standardization while benefiting from highly adaptable solutions that evolve with their business needs and technology advancements.

“A key component of a system integrator’s process is getting to know the ins and outs of a business and its manufacturing operations,” he says. “From there, they tailor a given solution only to the extent necessary and ensure its proper use.”

Risks of the Buy-and-Integrate Approach

However, this approach can be very costly, take longer than initially envisioned, and require a long-term relationship with a system integrator, says Young.

“When buying and integrating, it’s best to pair the integration effort with a long-term maintenance contract to keep the integrator involved with the company’s solution long term.”

In theory, a buy-and-integrate approach gives you the best of both worlds: the control of custom hardware and reduced cost (and risk) when compared to custom solutions, according to Hehman.

“But it’s not that simple as buying and integrating a series of point solutions comes with its own set of problems, including increased dependence on vendors and uncertain costs,” he says.

The Bottom Line

Whether organizations opt to build custom IIoT solutions, buy IIoT solutions that are commercially available, or take the buy-and-integrate approach, they must be aware of their advantages and disadvantages, Swaniker says.

“In short, it all depends on various factors such as the specific needs of the company and the company’s goals, available resources, budget, expertise, timeline, implementation and execution readiness, scalability, long-term support, and the level of customization required.”

Advertisements

Related Reading

Related Terms

Advertisements
Linda Rosencrance
Technology journalist
Linda Rosencrance
Technology journalist

Linda Rosencrance is a freelance writer and editor based in the Boston area, with expertise ranging from AI and machine learning to cybersecurity and DevOps. She has been covering IT topics since 1999 as an investigative reporter working for several newspapers in the Boston metro area. Before joining Techopedia in 2022, her articles have appeared in TechTarget, MSDynamicsworld.com, TechBeacon, IoT World Today, Computerworld, CIO magazine, and many other publications. She also writes white papers, case studies, ebooks, and blog posts for many corporate clients, interviewing key players, including CIOs, CISOs, and other C-suite execs.