Whether we host the application or you do, there is an operating cost which includes computer equipment, services, connectivity, support, updates, security patches, maintenance, backups, etc. After all, servers require care and feeding. That cost is part of it, and this is one of the benefits of, and why most of our customers prefer, that we host the application—so that the costs of that can be very well understood and the economy of scale comes into play because we’re not just doing this for you, but we’re doing it for all of our customers. This is why hosted services and Software as a Service (SaaS) is as popular as it is—there’s a real advantage to doing it this way. We didn’t invent this idea, but it’s usually the best solution. But, if you choose to do it yourself, you have to be realistic about what those costs are. There are both recurring technical costs and there are manpower costs to hosting and managing an application. Especially something that needs to be online 24/7. So that’s obvious.
The other part is support for the end-users of the application and maybe (depending on the nature of the app) dealing with sourcing or manufacturing, provisioning, and shipping of devices, dealing with customer service issues, returns, replacements—just all the normal logistics. That’s going to vary based on the nature of the application, but that is definitely an ongoing cost. Some companies choose to do this themselves, while others prefer to let us handle the whole thing for them—this is what we call IoT as a Service.
The last category is that there are almost always additional enhancements and normal maintenance of the software that went into the solution. It’s very rare, if ever, that you have an IoT solution that is never updated or has a feature added or some other sort of enhancement that goes into it. So you should always budget for future features, enhancements, and maintenance of your application. This is a case where most of our customers will have some combination of a fixed monthly budget of development hours that we have and we just chip away at a list of features and enhancements they want over time, and/or they’ll have new milestones where they say, “okay, we’re going to add these 20 features,” and then it’s just a new development project with an estimated cost like the original development project.
So, in summary: