Calculating the Cost of IoT Solutions: Estimates from Expanice Soft

TL;DR

• How much does it cost? A custom IoT solution typically costs $50,000, with no upper limit. Here, we talk about a minimum viable product (MVP) version of your cyber-physical system, which includes basic hardware and software to cover essential functionality.
• In terms of IoT app development costs, a reasonable budget for a cross-platform, Flutter-based application paired with a physical device is between $10,000 and $15,000. IoT costs may rise if your app uses artificial intelligence, requires real-time data visualization, or must adhere to industry-specific standards and regulations.
• The cost of developing back-end infrastructure for IoT solutions can exceed $100,000–$1M, with ongoing cloud storage and data processing requirements. To reduce infrastructure costs, you should focus on IoT architecture design and use a balanced mix of proprietary and open-source IoT-enabling technologies.

IoT solution development is not an easy task, and the associated costs can be elusive—much like the Internet of Things term itself.

After all, a storage facility with BLE tags is an IoT solution—and so is a custom fitness tracker working in sync with a smart scale and connected workout equipment.

To help you plan your budget wisely, we’ll provide ballpark IoT cost estimates for some projects from our portfolio, weigh in on the Internet of Things challenges we faced in the development process, and give tips to reduce the Internet of Things cost.

Table of Contents

IoT Cost Estimates from the Expanice Portfolio
     Project 1: An iOS App for a Custom ECG Device
     Project 2: A Comprehensive Smart Curtains Control System
     Project 3: A Complete Cryo Chamber Management Suite
     Project 4: iOS and Android Apps for a Connected Exercise Bike
     Project 5: Mobile Apps for Smart Radiation Monitoring Devices
     Project 6: Smart Home MVP with Video Recognition and Personalized Automation
     Project 7: Android App for Connected HVAC Systems
How Can Your Startup Reduce an IoT Project Cost?
FAQ: Understanding the Opportunities and Cost of IoT Development

How Much Does IoT Cost? Estimates from the Expanice Portfolio

The IoT cost figures in this article are approximate ranges based on typical Eastern and Central European developer rates of $30–$60 per hour.

Our portfolio includes IoT projects ranging from $10,000 to $15,000 for a simple companion app to $40,000 to $55,000 for feature-rich mobile apps and $1,000,000 or more for complex, long-running platforms such as our cryotherapy management suite.

The scope and complexity of the project, necessary integrations, security and compliance requirements, and ongoing maintenance determine the actual budgets. You can use our software development cost calculator to get an idea of how much your IoT solution will cost—or you can start with a lean IoT MVP with a smaller feature set and, where applicable, low-code or no-code tools.

Project 1: An iOS App for a Custom ECG Device

An IoT cost estimate for medical solutions will most likely include a discovery phase, which might take two to six weeks to conduct

Project Background

A US-based digital health startup was developing a custom wearable ECG monitor designed to support both hospital-based and at-home cardiac care. Equipped with Bluetooth-enabled smart sensors, the device captured the electrical signals of a human body and streamed them to a companion iOS application in real time, helping patients and caregivers diagnose heart conditions and observe their progression.

Challenge

The customer turned to Expanice to create an iOS mobile app for visualizing ECG sensor data in real time, listing Bluetooth as the primary IoT connectivity protocol for the project. Additionally, the client selected the Core Plot graphic library framework for sensor data visualization.

When we got down to building the mobile application, we realized that the amount of sensor data produced by the ECG tracker exceeded our expectations. Instead of rendering medical graphs at a speed of 300 dots per second (i.e., in real time), Core Plot averaged just 50 dots per second, introducing a significant delay. This was unacceptable for a healthcare mobile application, so we had to investigate other options while sticking within the initial IoT app development cost estimation provided to the client.

Solution

To hit the 300 dots per second benchmark, our team chose Metal, Apple’s low-level, GPU-accelerated graphics API, as a replacement for the off-the-shelf plotting library. We processed raw BLE data streams and converted them into Metal-ready drawing primitives, offloaded rendering tasks to the GPU to achieve 60 frames per second, and introduced a double-buffering system to ensure smooth scrolling and avoid dropped frames. As a result, the application could produce graphs in real time with only a 1/60 second delay at a speed of 60 frames per second.

IoT Cost Estimate

The project’s lifespan was 16 weeks, totaling approximately 500 man-hours. In a similar project, IoT app development cost could range between $10,000 and $15,000.

Key cost drivers: real-time ECG data visualization at 300+ data points per second, GPU-accelerated rendering with Metal, and Bluetooth Low Energy connectivity for medical-grade sensor data.

Lesson Learned

Our client, like many startups, was working on a tight budget and wanted to lower the cost of developing IoT software. They presented us with a fairly thorough technical vision for the project, and we were overconfident in choosing the Fixed Price cooperation model over a discovery phase in the initial IoT cost estimate.

Even though we fulfilled our obligations and completed the project within the agreed fixed budget and timeline, from then on, we’ve been recommending that our customers always kick IoT projects off with a discovery phase and, if the budget permits, sign a Time and Materials (T&M) contract for performance-critical IoT applications. This helps us assess project requirements and IoT costs more accurately.

Project 2: A Comprehensive Smart Curtains Control System

In smart home projects, IoT development cost will largely depend on the complexity of your hardware solution

Project Background

A European home automation startup has created a retrofit IoT kit suitable for most home curtain rails. The solution features a sleek gadget equipped with light sensors. The device automatically opens and closes curtains based on a customized schedule or when detecting sunlight.

Challenge

Initially, the customer asked Expanice to create a back-end system for orchestrating smart curtain control devices and the accompanying mobile applications. We selected PHP, Vue.js, Golang, and AWS as the primary tech stack for the project. To optimize the deployment, management, and scaling of the smart curtain control solution, as well as the IoT software development cost, we implemented Kubernetes while hosting the solution on AWS EKS.

We went on to create Android and iOS apps that simplified the smart curtains’ setup and usage. Configuring the sunrise/sunset mechanism, which uses light sensors and a personalized schedule, proved to be the most challenging part of this project.

The Expanice team also developed firmware for the IoT devices and integrated the system with popular voice assistants and other smart home products via APIs.

Some unforeseen problems emerged on the horizon when the smart curtain system started to gain popularity and more devices were added to the network. The back-end infrastructure, which supported a few thousand devices, became prohibitively expensive to maintain, significantly increasing the cost of the IoT solution (and its total cost of ownership).

Solution

To optimize the cost of IoT solution implementation, we programmed the system to use spot instances (AWS EC2) rather than ordinary ones. We further set up an automatic deployment mechanism, transferring the infrastructure to vacant AWS instances in mere minutes.

Extra IoT cost savings come from device status data caching. By configuring the smart curtain control system to send status data to the cloud every two hours, we helped our client reduce AWS infrastructure expenses by 66%. Check out the full smart home case study to learn how the development process unfolded.

IoT Cost Estimate

The project is still active. The initial IoT app development cost topped $30,000, with 1,000 man-hours spent on back-end and web application engineering.

Now that we have taken over the remaining parts of the project, including the mobile app and firmware for the curtain controllers, the hour count is nearing 3,000, which exceeds $120,000 in IoT software development costs.

Key cost drivers: scaling AWS/Kubernetes infrastructure for thousands of devices, caching strategies to reduce cloud usage, and multi-platform integrations (voice assistants, smart home APIs).

Lesson Learned

When developing IoT solutions, it's important to start small and keep a larger vision in mind.

Sure, when you’re a startup running a Kickstarter campaign, it might be hard to believe thousands of users around the globe will one day purchase your gadget and make it part of their IT ecosystem.

But if you cannot analyze functional and non-functional requirements early on and devise an IoT architecture that is built for scale, your IoT project cost might increase in later stages because of cloud vendor fees and additional system configurations.

Project 3: A Complete Cryo Chamber Management Suite

The more features you incorporate into the pilot version of your connected solution, the higher the IoT development cost will be

Project Background

A US-based company created smart cryotherapy chambers for gyms, spa salons, and healthcare facilities. According to the client’s initial plan, the IoT solution would feature an Android app enabling users to register and pay for cryotherapy sessions.

Challenge

The Expanice mobile team created the Android app in mere weeks, bringing IoT app development costs to a minimum. Simultaneously, the customer attracted investors and tapped into our IoT development expertise to create an entire cryo chamber management suite, including programmable logic controllers (PLCs) and embedded software, a custom CRM system with POS capabilities, and cloud infrastructure.

Solution

We developed an end-to-end SaaS solution for cryo unit management featuring:

• A cryo chamber management system that detects when a patient enters a cryo chamber and monitors their body temperature and heart rate. The system also scavenges data from the oxygen and liquid nitrogen pressure sensors installed in the cryo units.
• A secure Android tablet app based on fingerprint recognition technology, which provides on-the-go access to patient health records
• A web-based console for centralized cryotherapy unit management
• A white-label cryo chamber management solution with built-in POS and CRM features

For more information on the project, see the full IoT healthcare case study.

IoT Cost Estimate

The project’s lifespan has long exceeded 40 months, breaking the mark of 3,000 man-hours in 2021. Although the cryotherapy chamber system is up and running, we keep scaling the solution and extending its feature set.

We could estimate the cost of an IoT solution like this at $40,000–45,000 in its first iteration, which spanned 1,000 man-hours. The IoT development cost for the current version of the cryo unit management system has topped $1,000,000.

Key cost drivers: multi-layer architecture (PLCs, embedded firmware, Android tablet, CRM/POS, web console), continuous feature growth over 40+ months, and strict safety/monitoring requirements.

Lesson Learned

Due to logistics and legal challenges (in Belarus, where our R&D center was previously located, the laws forbid using liquid nitrogen in most types of residential and commercial buildings), we could not lay our hands on a real cryo unit. Instead, we had to make do with a simulator.

Using a simulator is not one of the best IoT development practices, but it’s a good workaround for startups that outsource custom IoT product development to several vendors scattered around the globe.

The only drawback of this approach is that you’ll have to conduct thorough testing to validate that the software components of your IoT product work seamlessly with the hardware. But you need to do that regardless of where your developers reside and whether they have access to the physical hardware.

Scope creep was a problem, too. Having raised substantial funding, the customer was eager to incorporate far too many features into the pilot version of the cryo unit management system, which would’ve delayed the release indefinitely and increased IoT software development cost.

We navigated this problem by adopting an incremental, result-based approach to software engineering, releasing a few features at a time, and ensuring their stable performance.

Project 4: iOS and Android Apps for a Connected Exercise Bike

The cost of an IoT fitness app usually starts from $15,000 (per platform)

Project Background

A California-based fitness equipment company was preparing to launch a new line of smart stationary bikes for home and gym use. Each bike came equipped with speed and cadence sensors, as well as a BLE-enabled console, helping users monitor their physical activity and maximize workout efficiency. To boost customer engagement and gain a competitive advantage, the client commissioned Expanice to develop minimum viable product versions of iOS and Android apps that would connect to the bike console, display historical workout data, and enhance the training experience with social features.

Challenge

The client partnered with Expanice to develop iOS and Android applications that would seamlessly connect to the exercise bike management console and visualize historical workout data. They made specific provisions regarding the IoT app development cost, so we had to deal with another Fixed Price project.

Being on another continent, the customer did not provide a physical bike, so we implemented a real-time simulator of the bike console to enable remote integration and testing instead.

Solution

We created iOS and Android versions of the fitness app featuring three essential modules:

• A BLE-powered device integration module, which automatically finds, connects to, and remembers exercise bikes within a specified range
• A workout module, which helps users view training data by applying day/week/month filters
• A social module, which allows athletes to log into the application using their Facebook or X (Twitter) accounts and share their progress on social media, bringing gamification elements to their workout routine

IoT Cost Estimate

The project took 14 weeks and 1,000 man-hours to complete. The cost of a similar Internet of Things solution can reach $40,000–$55,000.

Key cost drivers: dual-platform mobile development (iOS + Android), BLE integration and testing with hardware simulators, and social features that require user accounts and data storage.

Lesson Learned

Once again, we did not have access to physical equipment and performed testing remotely using a fully functional bike simulator that mimicked the real console’s BLE communication.

Although we elaborated on this issue in the previous project description, we somehow forgot to mention that working with a simulator or high-fidelity prototype can improve your time to market and reduce IoT development cost, too.

While you’re still in talks with a device manufacturing company, your embedded and mobile software engineering teams can start building firmware, middleware, and mobile applications for the IoT solution. Once the hardware is ready, you’ll only need to perform firmware flashing and validate that the whole thing works as expected. This strategy helps control costs and reinforces a best practice that we now recommend to other clients.

Project 5: Mobile Apps for Smart Radiation Monitoring Devices

Ensuring top-notch security and compliance with industry-specific standards may increase your IoT cost estimate

Project Background

A US federal law enforcement agency was looking to equip employees working at crime scenes with custom devices monitoring radiation levels in real time.

Challenge

The client approached Expanice to develop iOS and Android mobile applications integrated with different radiation monitoring devices. As a governmental entity, they listed IoT security and advanced reporting as their top priorities for the project.

Solution

We built the applications with elaborate business logic and intuitive interfaces, empowering law enforcement officers to freely use the IoT solution regardless of their technology background. The apps can:

• Connect to radiation monitoring devices via Bluetooth or Wi-Fi
• Produce reports specifying the types of radioactive isotopes detected at a crime scene, a radiation detection device taking the measurements, GPS data, and the date and time of monitoring
• Send the reports to the cloud server for further analysis and secure storage
• Exchange text files, images, and videos

IoT Cost Estimate

The mobile IoT solution cost $80,000 and took approximately 2,000 man-hours to develop, test, and deploy.

Key cost drivers: advanced security and compliance for a federal agency, two-factor authentication, and extensive testing of device integrations and reporting flows.

Lesson Learned

It was our first experience working with a government agency. To win the opportunity, we went through a rigorous evaluation process.

On the tech side, the client expected us to suggest a powerful yet simple user authorization mechanism that would suit non-technical employees. That’s why we opted for two-factor user authentication based on strong credentials and a PIN code generator. The security features and extensive testing were both considerable IoT cost factors.

Project 6: Smart Home MVP with Video Recognition and Personalized Automation

The cost of a computer-vision-powered smart home MVP with multi-device automation typically starts at around $60,000 (with virtually no upper limit

Project Background

A UK-based smart home startup envisioned a premium intelligent lighting fixture that would double as a high-performance user recognition and automation hub. Using video-based object recognition, the system was expected to track residents as they moved between rooms, learn their routines, and automatically trigger personalized scenarios: from lighting and climate control to media playback and voice call handling.

To secure funding and validate product–market fit, the client collaborated with Expanice to build a working smart home MVP demonstrating the most complex technical aspects—user recognition, motion tracking, and orchestration of multiple connected devices.

Challenge

The core challenge was to prove that a single ceiling-mounted device could reliably:

• Track a moving person across a 12-meter range
• Maintain smooth camera motion without jitter or lag
• Identify users with high confidence based on video
• Trigger personalized automations across lights, TV, and smart speakers

All of this had to run on embedded hardware (Arduino and Raspberry Pi) with strict performance constraints and be packaged into an investor-ready demo, delivered under a Fixed Price engagement in just 16 weeks.

Solution

We delivered a full-stack smart home MVP that combined embedded hardware, a custom image-processing pipeline, and mobile demo apps to simulate the target user experience. Its key components included:

• Camera motion control system. We used custom Arduino boards, servo motors, and drivers to enable 360-degree pan and tilt for Sony HD cameras embedded in the light fixture. To keep the user in frame, the motion controller tracked their position at all times.
• Custom image-processing stack. To meet performance requirements for embedded CPUs, we developed a lightweight image acquisition library that captured and preprocessed video frames before sending them to a proprietary recognition engine. The engine generated confidence scores for user identification, supporting personalized usage scenarios.
• Precision motion sensing. After evaluating Doppler radar and PIR sensors, we opted for a video sensor + Raspberry Pi setup that provided faster response times, better noise suppression, and accurate directional sensing.
• BLE and smart device integrations. Bluetooth Low Energy supported low-power communication between the user’s smartphone, smart lights, and other connected devices within the system. We integrated Milight lighting and a TV set via COM port to demonstrate personalized media and lighting scenes.
• Smart speaker and audio roaming. Because some smart speaker systems did not support Bluetooth audio handoff, we designed an Ethernet/PoE-based audio routing system that allowed voice calls and audio streams to “follow” the user from room to room as their presence was tracked via video.
• Mobile demo applications. Companion mobile apps allowed the team to configure demo scenarios, trigger routines, and showcase the system’s capabilities during investor presentations.

IoT Cost Estimate

The project took 16 weeks and approximately 1,600 man-hours to complete. At typical Eastern European IoT engineering rates, the cost of a similar smart home MVP—with embedded hardware integration, computer vision, and multi-device automation—would generally fall in the $60,000–$90,000 range.

Key cost drivers: custom embedded hardware and motion control, bespoke image processing and video-based user recognition, multi-device automation (lighting, TV, smart speakers), and Ethernet/PoE-based audio routing across rooms.

Lesson Learned

This project demonstrated the importance of building an MVP around the most difficult technical risks first. By focusing on camera motion, real-time tracking, and reliable recognition on constrained hardware, the team proved the core concept without investing in full-scale industrial design or a production-ready ecosystem.

Another key takeaway was the value of off-the-shelf boards and modules (Arduino, Raspberry Pi) for early-stage smart home projects: they enabled rapid iteration while keeping costs predictable under a Fixed Price model. The resulting MVP not only showcased technical feasibility but also positioned the client for their next funding round and clarified the roadmap toward multi-user behavior profiling, ecosystem integrations, and future edge AI optimization.

Project 7: Android App for Connected HVAC Systems

The cost of a first-version mobile app for a connected HVAC solution typically starts from $40,000

Project Background

A US-based HVAC manufacturer was developing a smart climate control solution and needed a mobile layer to connect their custom hardware with end users in the field. The company wanted technicians and facility operators to be able to monitor system performance in real time, adjust key parameters remotely, and streamline device onboarding during installation.

To support the initial rollout, the client partnered with Expanice to build the first version of an Android application tightly integrated with their MQTT-based gateway.

Challenge

The main challenge was to turn a hardware-centric product into a usable, secure software experience for operators working across multiple sites. The application had to:

• Discover and connect to HVAC devices via an MQTT gateway
• Provide real-time visibility into critical parameters like temperature, humidity, and airflow
• Allow remote configuration changes without compromising security
• Simplify device onboarding and installation workflows for technicians in the field

This all had to be delivered as a practical, technician-friendly MVP under a Fixed Price engagement.

Solution

Expanice created a user-friendly Android app that served as the software front end for the client’s connected HVAC systems. The solution’s features included:

• Real-time parameter monitoring. The app connected to the HVAC gateway over MQTT and displayed live readings for key system metrics such as temperature, humidity, and airflow, helping operators quickly spot issues.
• Remote control for technicians. Authorized users could adjust system settings on the go, enabling fine-tuning of climate control parameters without being physically present at the equipment.
• Secure device-to-gateway communication. We used DNS-SD and MQTT to securely discover and connect devices to the gateway, ensuring only trusted endpoints were allowed into the network.
• Streamlined onboarding and installation. Technicians could onboard new devices using QR code–based setup flows, significantly speeding up installation and reducing manual configuration errors.
• Technician-focused UX. The Android interface was tailored to field technicians and facility operators, prioritizing clarity, quick navigation, and at-a-glance status information over consumer-style visuals.

IoT Cost Estimate

The project took several months and involved a cross-functional team of mobile and back-end engineers working alongside QA and a project manager. At typical Eastern European rates, the cost of a similar connected HVAC app—covering Android development, MQTT gateway integration, secure onboarding workflows, and testing—would generally fall in the $40,000–$80,000 range.

Key cost drivers: MQTT gateway integration and secure communication, real-time monitoring UI, QR code–based onboarding flows, and field-ready UX design for technicians and facility operators.

Lesson Learned

This project highlighted how much value can be unlocked by exposing industrial hardware capabilities through a well-designed mobile layer. By building the first app version around real-time monitoring, remote control, and streamlined onboarding, the manufacturer could quickly demonstrate the benefits of smart HVAC to customers and internal stakeholders without reworking existing hardware.

Another takeaway was the importance of clear technician workflows in industrial IoT: investing in QR-based setup, device discovery, and simple status views reduced friction in the field while also laying the groundwork for future enhancements like multi-site dashboards, predictive maintenance features, and broader building management integration.

The table below summarizes our IoT development cost examples across industries, along with key cost drivers:

Summary: Expanice's IoT project types and cost drivers

How Can Your Startup Reduce an IoT Project Cost?

Running out of cash is the #2 reason for IT startups’ failure, and IoT startups are, sadly, no exception.

To avoid getting lost in the startup limbo, plan your budget wisely and seek ways to reduce IoT project cost

There are several tips you could follow to keep IoT development cost down and avoid this scenario:

• Find a technology company with a proven track record of creating IoT solutions. Although the Internet of Things is no longer a novel concept, few tech companies have hands-on experience building anything more complex than mobile apps paired with fitness trackers. Going back to our ECG monitor case study, only 20% of IoT vendors are well-versed in low-level programming technologies. We’re not engaging in self-promotion here; we are talking facts.
• Start your IoT project with a discovery phase. Conducted by a skilled software architect, business analyst, and project manager, project discovery will help you verify your idea, identify bottlenecks early on, and align your technology and business objectives. One of our clients, for example, wanted to create a smart home security system based on motion sensors. The solution would allow homeowners to track movement both inside and outside the building. During the discovery phase, we found out that the ratio between the measured data properties prevented the software from performing certain actions—say, notifying the user of suspicious activity—automatically. That’s why we replaced the sensors with Wi-Fi video cameras. Sure, a discovery phase would take two to six weeks to carry out, adding $8,000–15,000 to your IoT cost estimate—but it’s a small fraction of what you could pay should problems arise further down the road.
• Keep your project scope under control. As a startup, you may be overflowing with ideas, eager to tackle every issue faced by your target audience simultaneously. But the more features your IoT product incorporates, the longer it’ll take to flesh out your ideas and release the device to the market. Opting for an MVP with just enough features to satisfy user demand is vital to reducing IoT development cost and keeping your startup afloat. Otherwise, you’ll blow your budget and never release your product. Some of our past clients did just that, and believe us, you don’t want to follow their fate. One more word of advice: use ready-made IoT prototyping tools and platforms as much as you can—at least until you find investors or run a successful crowdfunding campaign. While we're at it, check out our MVP development cost guide to better plan your initial budget.

Finally, familiarize yourself with the key IoT-enabling technologies and distributed team management best practices in the Internet of Things projects. And should you have questions about the cost of IoT development and implementation, just drop us a line!

FAQ: Understanding the Opportunities and Cost of IoT Development

1) What are some of the most promising niches for IoT startups?

The IoT landscape is vast, with numerous sectors ripe for innovation. Examples of such niches include predictive maintenance for energy and utilities, connected consumer electronics, industrial manufacturing, cybersecurity, and BabyTech. These areas show not only the wide range of applications for IoT technologies but also sectors with high growth potential.

2) Why is IoT development expensive?

IoT projects are pricier than standard software because they combine three distinct engineering layers that must work in sync:

• Hardware—sensors, PCBs, and enclosures
• Embedded software—firmware, middleware, and operating systems that run on the device, communicate with sensors, and collect data. In edge deployments, select data processing workflows can also happen on the device level.
• Cloud and app layer—mobile/web apps, APIs, dashboards, and cloud infrastructure
• On top of that, ongoing cloud fees (AWS / Azure / GCP), security updates, and maintenance significantly increase the total cost of ownership (TCO) for IoT solutions

3) How much does it cost to develop an IoT app?

If the hardware already exists, a standalone IoT mobile application typically costs $10,000–$55,000, depending on complexity:

• Simple data viewer (one platform): about $10,000–$15,000
• Feature-rich, interactive app (iOS and Android): about $40,000–$55,000
• These ranges are in line with several projects from our portfolio, such as companion health and fitness apps

4) How does the cost of IoT solutions vary across different projects?

The cost of IoT solutions can vary greatly depending on the project’s complexity, scope, and specific needs. In our experience, IoT development costs can range from around $50,000 for a basic end-to-end MVP (hardware + software + cloud) to $1,000,000+ for complex systems with advanced features, multi-layer integrations, and years of iterative development. Factors such as the expertise of the team, project duration, regulatory requirements, and chosen technologies also significantly impact the overall IoT costs.

5) How do I estimate my IoT project budget?

For a rough ballpark, you can think in terms of layers:

• Hardware prototype: $5,000–$15,000
• Mobile app (iOS / Android): $20,000–$40,000
• Back end and cloud infrastructure: $10,000–$30,000
• Discovery and project management: about 15% of the total budget

For many startups, this results in a baseline of roughly $50,000+ for a first IoT MVP, with larger, long-running platforms going significantly higher.

6) What costs more in IoT: devices or software?

Hardware prototyping is often a fixed upfront cost, but in most projects software and cloud make up 60–70% of the overall budget. Firmware, mobile apps, back-end services, and cloud infrastructure must all be updated, monitored, and secured throughout the product's lifecycle, driving long-term costs.

7) What are the hidden costs in IoT projects?

Some of the most overlooked cost factors in the Internet of Things projects include:

• Certification: FCC / CE and other compliance tests for hardware
• Data storage and processing: accumulating sensor data in the cloud over time
• Security and maintenance: regular firmware and app updates to patch vulnerabilities
• Customer support and operations: handling device returns, replacements, and field issues

Accounting for these early helps avoid unpleasant budget surprises later.

8) How can IoT startups tackle the high cost of IoT development?

Managing IoT development costs effectively is critical for startups. Key strategies include starting with a discovery phase to clarify technical and business requirements, maintaining a tight scope to avoid feature creep, leveraging ready-made prototyping tools and platforms, and understanding IoT-enabling technologies to avoid reinventing the wheel. These approaches help align projects with market needs while controlling expenses.

9) What are the major hurdles IoT startups face in the development process?

IoT startups often encounter several challenges, including feature creep, which can delay project completion and inflate IoT development costs. A weak or missing IoT monetization strategy can undermine financial sustainability. In addition, hardware lead times, complex integrations, and regulatory requirements can all cause delays in delivery. Overlooking IoT security is another common issue that can lead to vulnerabilities and reputational damage. Hiring a fractional CTO with experience working on IoT projects is one way to keep your project on track.

10) What steps can IoT startups take to secure their solutions?

IoT startups should prioritize security from the start, employing strong encryption, reliable device authentication, regular software and firmware updates, and extensive testing for potential vulnerabilities. Security should be treated as a fundamental component of IoT solution development, not an afterthought. This helps protect against threats, build user trust, and keep the overall Internet of Things cost under control by reducing the likelihood of expensive incidents and rework.