Jasper study breaks down opex cost for industrial IoT - Mobile World Live

Jasper study breaks down opex cost for industrial IoT

26 APR 2016

Up to half the operational expense for industrial firms running an Internet of Things (IoT) network comes from communications costs, according to a study by vendor Jasper.

The study is based on data gathered from more than 3,500 enterprise customers using IoT platforms, which has been used to determine the Total Cost of Ownership (TCO) of Industrial IoT (IIOT).

Between 35 per cent and 50 per cent of total opex comes from network communications.

“Today, many companies are moving to mobile networks (or cellular) to give them better control over the IIoT experience,” said the study. Given this development, the report concentrated on mobile networks as the primary channel.

It calculates that average annual spend across 100,000 devices used in industrial monitoring is $1.25 per device each month. Average data consumption is 2Mb and average SMS usage is 19Kb per device each month.

Among the expenses for enterprises are monthly access fees, which are often independent of charges incurred for data usage. Data plans are typically either pay-per-use (pay per kilobyte, megabyte, gigabyte), or pay per-device, and firms typically subscribe to a fixed amount of data per month.

Depending on use case, some IIoT applications might only consume 25Kb per month, while others could go as high as 1GB per month.

Typically, industrial IoT applications eat up “significantly” less data per month than the average consumer smartphone or tablet.

Paying per megabyte may be the smartest move, particularly if an enterprise sees usage fluctuate on a monthly basis. For those with higher data usage, per-device plans with pooling “could be the most cost effective”, especially if data usage is consistent, the study argued.

One risk to cost structure is overages, generated because it is difficult to calculate the amount of data required to run a service.

Some operators offer flexible rate plans that allow firms to shift packages in the middle of a billing cycle. Some plans make it possible for firms to pool data across a large number of devices, which gives more options for cost control.

In addition, there is typically a cost if an enterprise’s devices roam outside their primary coverage area, as well as rounding charges which “may not seem that significant, but over time, rounding can add up if you’re deploying thousands or tens of thousands of devices”.

Finally, there are always taxes, as well as other regulatory surcharges, to absorb.

As well as network communications, other costs are administrative labour (20 per cent to 50 per cent), and technical support which accounts for between 10 per cent and 33 per cent.

Author

Richard Handford

Richard is the editor of Mobile World Live’s money channel and a contributor to the daily news service. He is an experienced technology and business journalist who previously worked as a freelancer for many publications over the last decade including...

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