For any enterprise or startup embarking on an IoT project, one of the most fundamental decisions you must make at the beginning of the journey is whether to build your own IoT platform or buy.
Most choose to buy a ready-to-deploy IoT platform rather than taking the DIY approach. However, while this is the obvious choice for many, you should carefully consider what’s right for you. That’s why we’ve written this guide to talk you through the decision making process.
What is an IoT Platform?
So first off, let’s quickly clarify exactly what it is we’re talking about. An IoT platform, sometimes referred to as an IoT Application Enablement Platform (AEP), is the middleware connecting embedded devices to end-user applications, usually via the cloud.
As well as providing data connectivity, IoT platforms also offer:
- Data storage
- Data processing
- Access control
- Event processing
- Device management
In other words, it’s what enables you to develop an end-to-end IoT product and take it to market. Most of these solutions store and process data in the cloud. The Nabto IoT platform, however, uses P2P IoT to store data at the device level, which can provide benefits, including lower latency and more security. Download our P2P IoT explainer ebook for more details.
The Difference Between Building Versus Buying
For those choosing to buy an IoT platform, this will usually be purchased using a SaaS model. The features and technical specifications on offer from platform providers are extensive. Meanwhile, the plans offered can suit all types of users, from small businesses with light usage demands to large enterprises requiring enormous bandwidth and capabilities.
Buying an IoT platform dramatically cuts down on development time, and therefore your time to market. It also reduces the demands on your technical team, as you remove all of the IoT middleware development from your build, leaving just the embedded device development and IoT app development to complete.
If, on the other hand, you choose to go down the self-build route, budget for plenty of time and money, as you could be looking at a build time of 12 to 24 months.
You will need to design, build, test, and maintain each part of the IoT stack, including:
- Server deployment and maintenance
- Database build and maintenance
- UX and UI build
- Developing 3rd party connections and APIs
- Security considerations
- Access control
- Front end build and maintenance
Which Type of Companies Build and Which Buy?
Companies that choose to build their own IoT platform are, unsurprisingly, usually large enterprises that possess highly experienced and talented IoT engineers and developers. These types of companies are typically looking to leverage their IoT platform as a core aspect of their business offering, often by making the IoT platform the product itself.
Some companies are also motivated to build their own IoT platform due to having extremely bespoke requirements that can only be fulfilled by a fully custom build.
Instead of choosing to pay to use an IoT Application Enablement Platform, companies are looking to get a product to market quickly and efficiently. The middleware needs to enable the end product or service, so there is no ROI in investing large amounts of time and money building their own IoT platform.
Buying is also often favored by startups and smaller businesses that are accustomed to using third-party software providers to support and enable their development. Larger legacy enterprises, on the other hand, can feel less comfortable giving away control to a third-party provider.
How to Assess What’s Right for You
Cost and return on investment will be front of mind for most businesses when deciding whether to build or buy their own IoT platform. Therefore, calculate the rough cost if you choose to develop in house versus the monthly subscription fees charged by IoT platform Providers.
But cost considerations aside, here are some other essential factors to consider:
- Time to Market: Do you have a target launch date, determined by variables such as market forecasts and product roadmaps? A quicker time to market will favor buy versus build.
- Customization: What levels of customization do you require? If you require extensive customization, have you checked compatibility with IoT platform providers to assess if these can provide a solution to your needs?
- In-house resources & ability: How much available resource do you have internally, and what’s the opportunity cost of deploying this to build an IoT platform versus other projects they would otherwise be working on? Do you have the ability and expertise within your current team to develop IoT middleware?
- Compliance: What are the regulatory and information security requirements in the jurisdictions where you’re launching your IoT product? Can an IoT platform provider comply with all these requirements, or will these add extra complexities to an in house build?
- Hardware: What hardware would you need to buy and maintain to run an in house IoT platform? What is the cost of this investment?
- Maintenance: What would be the impact on internal resources of the regular maintenance required on a self-build platform?
- Total cost or ownership (TCO)/running costs: What’s the total budget available for the project? An off the shelf IoT platform has all the costs built into the subscription, whereas building your platform comes with many ancillary costs, such as data storage and backup.
Build a Prototype Before Committing to a Platform
Before making your final decision on buy versus build, and before committing to an IoT platform, it’s important first to build a prototype if you choose to buy.
This will help you test functionality and implementation, which will help you determine if the path you’re considering is the right option for you. For example, suppose you’re building a prototype using an IoT platform provider. In that case, this will enable you to check the platform can deliver what you need in terms of core functionality, customizations, and tech support. Once you’re satisfied, you can then make the investment.
Or, if you’re prototyping a custom-build solution, this will enable you to test the core competencies of your team when it comes to developing IoT middleware. If the prototype build is a struggle, this could be a sign that buying an IoT platform could be a better option.
The Nabto Platform – P2P IoT Connectivity
Here at Nabto, we have our own IoT Application Enablement Platform, enabling developers to build and deploy IoT mobile apps quickly. Our AEP has three core features that make it unique within the IoT ecosystem.
- White Label IoT Mobile App: We’ve made building an IoT app as simple as possible by providing a white-label mobile app front end, which can be used for various deployments, including smart thermostats, HVAC controls, and smart security cameras.
- Peer-to-Peer Connection: Our IoT platform uses peer-to-peer connectivity instead of the cloud. This provides superior security and as well as reduced costs and latency compared to cloud-connected alternatives. Download our P2P IoT explainer ebook for more details.
- No Backend Development Required: Unlike some IoT platforms, there is no backend development required with Nabto. This means embedded device developers can easily connect to apps, while app developers can easily connect to embedded devices without worrying about complex backend development.

Building your prototype with Nabto is free; all you need to do is create an account within our cloud console, then test our system.
Read Our Other Resources
We’ve published a range of IoT resources for our community, including:
- How to Develop IoT Apps, which talks you through everything you need to consider when building a mobile app for your IoT product
- How to Choose the Best IoT WiFi Module and what to consider when making your choice.
- A complete Guide to Microcontrollers for IoT, which explains all your options when it comes to choosing an MCU for your project.
- How to choose the best RTOS for IoT devices, which explains what you need to consider when making your choice.
- RTOS versus OS when it comes to IoT, which explains the advantages and disadvantages of both options.