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Concurrent Engineering Blog

IoT Technology Stack: Should You Outsource It?

Posted by Emma Rudeck on 06-Aug-2015 14:30:00

IoT_Technology_StackWhen you step back and look at everything you need, for your product to become a smart, connected product, there are some tough business decisions to be made. Developing, maintaining and supporting the required IoT technology stack are not small feats. They require significant investment and also a different skill set to the one traditionally found in successful manufacturing firms.

What is the typical technology stack required?

There are many layers to the technology stack required to support smart, connected products. These include:

  • The product or device. This could be a product or device that your company has been making for many years. But now it’s going to also include connectivity and the ability to gain more functionality through the cloud
  • Database to manage all the information
  • Application development platforms, so we can build multiple applications that share a common infrastructure.
  • Analytics to measure what’s happening with the product
  • Role-specific applications for service technicians and also for our sales team and end users.
  • Security and data privacy
  • System integrations, including how it fits together with other business systems.

How can manufacturers adapt to these requirement?

For those manufacturing companies that start to pull together the necessary skills, it can be a real challenge to get access to the right skills. Essentially, they’re entering the war for talent that already exists in Silicon Valley and with other establish software and tech brands.

Rather than having to bring it all in-house, there is another approach that software companies can take. As with previous waves, there is a pattern to how new technology roles out across the marketplace. To begin with, we see vertically integrated solutions, where a single vendor is providing an entire technology stack. Then, over time, specialisation starts to emerge. Another company comes along that produces a better database. A different company introduces a technology that improves communications or for security. This happened in the mainframe industry. This happened in the PC industry. This happened in the mobile phone industry. There isn’t any reason it won’t happen in the IoT space.

So, early movers who are vertically integrated can gain an advantage for a period of time. But they need to be careful not to overestimate their ability to sustain all the layers against all the companies that choose to specialise in a specific section. If they do overestimate their capabilities, the short term advantage will turn into a longer term liability.

So what does this mean in practice?

Start by asking yourself the tough question, where can we really add value. Where is it that our knowledge of the product, the process and/or the customer will create a competitive advantage, which no specialised company is going to be able to replicate? Likelihood is, this is the space where you should invest most of your energy and resource.

Then, turn to a reasonably short list of outside parties, who can help you to assemble the rest of the solution, without introducing too many moving parts.

This should then give you the best possible balance between proprietary intellectual property combines with off the shelf technology and expertise, enabling you to bring a really smart solution to market as quickly as possible.

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