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Major Factors That Affect Your IoT Development Cost

The Internet of Things (IoT) has come a long way in recent years. Various companies have shifted their focus towards IoT App Development for uncovering future business opportunities at the helm.

From setting up voice-controlled devices to installing automated video camera surveillance systems, IoT has and will continue to become a bigger thing. Through this consumers and high tech companies will be able to automate, remotely manage, and collect data for connecting the links and strengthening the target audience significantly.

However, in order to make business processes more actionable and interactive, IoT Application Development has contributed significantly in multiple industry verticals. It not only saves time and money but also provides 360o customer experience and helps in understanding consumer behaviour thoroughly.

So if you want to build a seamless and intuitive IoT Application but are not sure what to include in your IoT development budget, keep reading this article. Here we have shared insights over the major factors that you need to consider while calculating or comparing the IoT development cost.

NOTE: It is always important to understand your targeted demographics first and their potential ROI. If you excel here, IoT development would turn out to be a worthy investment for sure.

IoT Development – Cost Calculation Approach

“IoT Development cost = Total Development Time X Hourly Rate”

The Internet of Things has the potential to be boundless. From the healthcare and agricultural sector to the logistics and transportation sector, IoT has been brought to life through intuitive human-to-machine interactivity.

Here we have discussed the IoT Development costs in three different categories-

Development costs – These are mainly open costs incurred for developing the IoT solution. It includes- embedded firmware, custom front ends, custom backend business logic, and production testing software.

Production costs – These costs are incurred after the solution has been developed. Here new hardware is produced. It includes- Bill of Materials, manufacturing costs, and manufacturing testing costs.

Operational costs – Every IoT solution needs servers and software to run and perform. And these servers come with operational costs too.

After understanding the cost breakdown category, let’s explore each IoT cost factor in detail- 

1. IoT Back-End & Infrastructure

For processing the collected data from IoT devices, you must have a robust backend support system. In that case- you have two options available-

  • Either build a web server right from scratch
  • Or use a third party cloud server

However, using a ready made cloud platform is cost effective and more flexible than building a web server from starting. Various companies trust Google or Amazon for storing their data. You will have to pay the monthly subscription fees for using these servers. 

2. IoT Application development

Are you planning your app development with IoT? Consider these following points-

Features and Functions

While preparing the budget for IoT App development, prepare a list of must-have features and functions for your business. Specify your core requirement and discuss your purpose with the respective app developer. Imagine how a consumer will use your app and what features and functions will make it user friendly.

Secondly, if you are looking for a low budget IoT app development, cut all the unnecessary features. You can always add premium features once you start gaining good conversions.

Thirdly, it is always advisable to add a unique and distinctive feature to your app to make it look different from others. That feature should create a strong positioning of your business into the minds of consumers.

Add functionality that can make your app compatible with all devices. So, if you want to target desktop OS, web, or mobile app, you will have to count development costs for each platform too. 

3. IoT hardware cost

IoT hardware costs include devices for a remote dashboard, sensors and servers, devices for control, bridge devices, and more.

If you want to optimize your expenses, consult with the respective IoT partner in charge to discuss the hardware requirement. These devices contribute crucially in managing key tasks and functions like security activation, security, communication, and detection to support specific goals.

4. IoT development team size & time

IoT Development team generally includes-

  • hardware engineer
  • project manager;
  • back-end developer;
  • mobile app developer
  • system architect
  • firmware (embedded software) engineers;
  • front-end developer
  • UX & UI designer;
  • QA engineer;
  • DevOps.

No doubt hiring a team of professionals requires a great deal of investment. However, the optimal size of the team and time varies based on the requirement. For instance, it takes around $20k/month for handling and managing a team of 10 members.

Note: This rate varies as per localities, cities, and even countries.

5. Hidden & unpredicted costs

If you want to avoid hidden and unpredicted costs, then you should have a clear vision of your product. Because, any further redesigning, or changes into functioning will add more man hours to your invoice.

Therefore plan everything and discuss security practices to avoid any unpredicted costs in the later stage.


IoT Development is rightfully regarded as one of the most prominent digital technologies in today’s era. Businesses have adopted this technology to outperform their competitors and improve customer service and retention. So if you want to build a scalable and robust IoT application to upscale your business, hire us now!

Excellent Webworld is trusted by millions of brands and startup firms for IoT Development. Call us now to discuss your IoT development project cost today!


Author Bio: Mayur is the CTO of Excellent WebWorld ( Web & Mobile App development company). He is updated with all the latest trends in the mobile app technology field. He writes blogs that are helpful for businesses to implement technology in the operations. You will find him swimming whenever he is free.

Harshvardhan Mishra

Hi, I'm Harshvardhan Mishra. Tech enthusiast and IT professional with a B.Tech in IT, PG Diploma in IoT from CDAC, and 6 years of industry experience. Founder of HVM Smart Solutions, blending technology for real-world solutions. As a passionate technical author, I simplify complex concepts for diverse audiences. Let's connect and explore the tech world together! If you want to help support me on my journey, consider sharing my articles, or Buy me a Coffee! Thank you for reading my blog! Happy learning! Linkedin

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