What types of IoT solutions are being practically implemented and what are their advantages and disadvantages?

There are essentially two approaches in the industry for architecting IoT solutions.

1. the vertical buy approach

In this approach, customized hardware and software components are purchased for very specific applications in the industry, preferably from one supplier. For example, if the air quality in a hall is to be monitored, then there is a sensor, gateway hardware for Internet connectivity, a mobile app and a web dashboard for air quality monitoring. Such a solution is then either provided by a startup as a complete package and only requires minor configuration for the buyer.

2. the vertical build approach

This approach is often chosen when the desired solution is so special that there is simply no complete offering for it on the market. In this case, an individual solution is implemented in a project in collaboration with external IT service providers using various cloud services, hardware and software components.

3. the horizontal platform approach

In this approach, a basic technology is first introduced in the company, which initially does not provide an implementation for any specific problem. However, the aim is to be able to implement various IoT solutions very efficiently and homogeneously on the basis of this platform. The efficiency gain is achieved by the fact that edge hardware and sensors can be reused for different solutions and that basic functions for operating edge applications, such as over-the-air updates, authorization management, administration interfaces, etc., only have to be provided once.


Today, there is still a strong focus on the vertical buy approach. This is largely due to the fact that there is often too little IT expertise in industrial practice to operate complex IoT architectures and generic user interfaces. This approach very quickly delivers concrete solutions for a specific problem, but also means that in the medium term the company has to manage a whole zoo of vertical solutions that are not very compatible with each other.

If the vertical build approach is pursued, then one often starts with a proof-of-concept for an IoT project. The technical complexity is often underestimated by industrial clients and the consultants focus on the optimal selection of technical modules and often forget that the overall architecture must then later be operated internally by the client. There is also often too much focus on the implementation of the PoC and not enough consideration of the complexity involved in scaling and going live with such a solution.  This leads to many failed PoC projects in the field of IoT.

In the platform approach, too, there are mainly larger companies that want to build their own platform for internal purposes. Here, too, the initiating IT departments usually underestimate the complexity of such a software product, which leads to the platform not being able to keep up with the range of functions of platforms available on the market and to the user-friendliness of the implementation usually being skimped on.

In the long term, the most effective way to implement an IoT strategy is to use a sophisticated IoT platform and implement individual solutions for specific use cases on the basis of the platform. External consultants can then also be used here, who can then supplement solutions purely in the form of IoT applications with the help of the existing platform. All IoT applications can then be managed and expanded centrally.

Author: Dr. Marko Petzold, CEO of Record Evolution