Cloud Solutions for Manufacturers: Eliminating the Build vs Buy Question
Build versus buy. It’s a classic conundrum: the fundamental choice between purchasing an existing software solution or building custom software in-house to meet your specific needs. Almost every business has faced it at some point, and it always raises strategic, financial, operational, and human resources questions that are tough to answer. Questions like: Who knows our business better, us or a vendor? Who is better equipped to develop a specialty solution, our team or an external team?
In the cloud, it’s no different. When equipment and device manufacturers start considering a platform to cloudify, service, support, or commercialize their connected devices – the buy versus build question inevitably comes up.
There are arguments for both sides. But when you look more closely, it becomes clear that building really isn’t a viable alternative for manufacturers looking to have their own device cloud. Why? In this post, we’ll take a deep dive into the challenges of home-built versus buying a best-in-class platform to bridge the strategic gap between devices and the cloud.
Top Ten Challenges of Building
Building a strategic platform is a far cry from building an app. And a solution that enables manufacturers and their channel partners to remotely monitor and manage devices and shift to as-a-service business models via the cloud is a platform by any definition. What’s challenging about build-your-own platform? Here are ten things to consider when deciding:
- Time to market – The need is now, not years from now. A recent report from Microsoft and IoT Analytics, which interviewed 300 respondents representing a variety of industrial sectors, estimated that those who bought a solution amortized the investment four times faster than those who followed the custom-build approach. Time to market and ROI are crucial when building any platform, so consider whether you have the time to wait for what is arguably a key part of your innovation and competitive edge strategy.
- Dev team – Building an enterprise-class cloud platform requires a dedicated team, working over years. Consider whether you have the budget to hire, train, and retain dozens of engineers and fund hundreds of man years for this effort.
- Compliance – Each regulatory regime in each geography has its own unique demands. Examine your resources and ensure that you have the compliance expertise in-house to ensure that your platform not only meets the strict standards delineated in GDPR, AICPA, CCPA and others, but also stays compliant as these regulations evolve.
- Location of data – For compliance with regulations like GDPR, you need to know in what exact geography your data is stored, and where it travels. Make sure you have the infrastructure, staff, and resources to ensure compliance with this complex demand.
- Security certifications – Regulatory regimes demand you obtain security certifications for software used by your resellers, channel partners, or end users. Consider whether you have the time, expertise, and resources to devote to obtaining these certifications and ensuring their ongoing validity.
- IoT platform support – Selecting the right IoT platform when building a custom cloud platform is a strategic commitment. Before you start, ensure that you have the in-house expertise on your platform of choice, and (more crucially) that you’re prepared if you need to port to another platform (like Google IoT Core users had to do recently).
- Scalability – When dealing with IoT, devices and the cloud at the enterprise level, scalability can be extremely complex. Decide whether you have the knowledge and capacity to support thousands of users and millions of sensors simultaneously.
- Uptime – Downtime is no joking matter for your business, and even less so for your partners, resellers, and customers. Make extra sure you have the capability to maintain guaranteed uptime - your entire value chain depends on it.
- Ongoing overhead – Any strategic platform needs constant updating to keep it in-line with market demands and trends, UI standards, emerging technologies, and cybersecurity – as well as ongoing maintenance and support. Make sure you have the dedicated resources to support this.
- Integration – Integrating seamlessly with diverse and multiple internal systems is no simple task. And integration with reseller and channel partner ticketing and other systems is tricky and resource-intensive, too. It’s crucial to check whether you have the in-house knowledge to develop and support a large-scale integration project.
Buy Over Build: Win-Win for Everyone
Facing the above and many other challenges, both manufacturers and their dev teams frequently conclude that buying a best-in-class solution supported by a well-staffed professional services organization and an expert R&D team is a better way to cloudify, service, support, and commercialize their connected devices.
In fact, the Microsoft research noted a growing trend toward the buy approach, with 30% of projects that began in 2021 or 2022 using the buy approach, up from 9% of projects completed before that. Buying a field-proven platform is a compelling alternative for many reasons, notably:
- Cost savings – A best-in-class platform provides a ready-made cloud ecosystem that dramatically lowers the upfront human resources, technology, infrastructure, deployment, and administration costs associated with building your own solution.
- Security and compliance - A best-in-class platform takes care of security and compliance, ensuring that your data is protected and meets industry standards – saving you the headache of managing complex regulations.
- Rapid deployment - A best-in-class platform is ready-to-use, allowing you to deploy your cloud solution quickly and gain a competitive edge by getting your cloudified offering to market significantly faster.
- User-friendly - Companies that specialize in software development invest a lot of effort in UX and in creating a user-friendly interface. This simplifies the learning curve for your team and customers, ensuring a smoother transition and faster uptake.
- Ongoing innovation - A best-in-class platform is continually updated to incorporate the latest technologies and features – meaning you stay competitive without worrying about ongoing development and maintenance.
- Modularity - Using a ready-made solution typically allows you to choose the modules and functionalities you require, so you can use the infrastructure to develop services and applications or leverage the entire platform.
The Bottom Line
For manufacturers’ cloud adoption, the ‘build vs buy’ question is not really a question. The verdict is clear: by embracing a proven ecosystem like Xyte, you can shift your focus from building to reaping rewards. It's a choice that will fuel innovation, fortify your partnerships, and propel your business into a brighter, cloud-enabled future.
Xyte is a modular and open system, offering maximum flexibility and complete control over the data from your devices. Xyte’s extensive set of RESTful APIs allow you to retrieve device data that can be analyzed or utilized in either our out-of-the-box applications or your own. Third-party tools like ticketing, ERP, CRM, task management, messaging and others are easily integrated with the platform to streamline business operations.
“Xyte helped us deploy a world class solution in a matter of months. If we had done this ourselves, it would have taken years to get this off the ground. We needed something that we could rapidly deploy and get to the market quickly, but still provide the feature set that our customers were requiring - and that’s what Xyte enabled us to do.” Shane Roma, Legrand Middle Atlantic Products