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IoT Cloud in 2024: Benefits, Challenges, Platforms&Functionality

Updated on Jan 11
4 min read
Written by
Cem Dilmegani
Cem Dilmegani
Cem Dilmegani

Cem is the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per Similarweb) including 60% of Fortune 500 every month.

Cem's work focuses on how enterprises can leverage new technologies in AI, automation, cybersecurity(including network security, application security), data collection including web data collection and process intelligence.

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IoT Cloud in 2024: Benefits, Challenges, Platforms&FunctionalityIoT Cloud in 2024: Benefits, Challenges, Platforms&Functionality

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In an IoT ecosystem, the IoT devices are interconnected through an expanded network infrastructure. We might think this infrastructure is housed in the annex of an office, with large servers having green and red blinking lights. But, there has been a growing interest to leverage the cloud to maintain IoT data due to the cloud’s easy accessibility, scalability, and disaster recovery features.

In this post, we define IoT cloud, examine its advantages over on-premise computing, discuss its different types, and highlight the top ones available now.

What is IoT cloud?

An IoT cloud is an extensive, internet-based network that stores data from IoT devices and applications. This includes the underlying infrastructure, servers, and storage needed for real-time operations and processing of data.

An IoT cloud also encompasses the services and standards necessary for connecting, monitoring, and securing different IoT devices and their applications.

How does IoT cloud work?

Through embedded sensors and trackers, IoT devices collect data. The data is then transferred to a data center where all other IoT devices’ data are also stored. Some data centers are held on-premise. But more businesses today (50%) are choosing to store their data on the cloud for further processing (Figure 1).

Cloud storage can be private to the company, public (e.g. Google cloud or AWS), or hybrid.

IoT cloud is becoming more popular. In 2021, 50% of corporate data was housed on the cloud compared to 30% in 2015.
Figure 1: An increased use of IoT cloud for storage purposes amongst businesses, Statista

What are the benefits of IoT cloud?

1. Accessibility

This infrastructure allows for seamless mobility of data from multiple devices into a single server, making for streamlined storage, analysis, and overview. The on-demand nature of the cloud makes accessibility, at any given time and on any device, possible.

2. Scalability

As a business grows in size, so do its IoT devices, and so does the need for increased investment for the additional networks and data storage to house the new data. IoT cloud makes it feasible for a business to integrate additional devices into an already-existing cloud with minimal costs and minimal need for increased IT infrastructures, such as more servers or hard drives. With every device that’s added, its content will coherently be placed among the rest up in the cloud.

3. Fewer cables, papers, and minerals

Cloud computing can reduce the consumption of resources such as paper, electricity, metal and mined minerals found in steel servers and cables. Since the generated data from all IoT devices is stored in the cloud, there is no longer a need for an on-premise physical storage medium that needs wires and steels to function. Consequently, because the collected data is digitally accessible, employees do not have to print out the data on paper in order to view it.

4. Collaboration

With data from IoT devices stored in a cloud and accessible to the authorized employees from anywhere, the collaboration between different departments in an organization will be seamless. This will increase team-work, engagement, efficiency, productivity, and interest among the employees.

5. Disaster recovery

IT disasters happen, data can be deleted, and its recovery is not always possible. IoT cloud platforms, or cloud computing services in general, offer fast data recovery for all kinds of emergency situations, be it natural disasters, individual errors, or power outages. According to a study, 20% of cloud users recorded that their disaster recovery process was done in four hours or less, compared to 9% for no-cloud users.

What are the challenges of IoT cloud?

The main challenges of adopting an IoT cloud are as follows:

1. Data breaches and security

Security challenges and data breaches are estimated to be the topmost concern with cloud computing. If there is a bug within the cloud computing provider’s network, there is the possibility of hackers getting access not only to your data, but to all other subscribers’ information.

2. Internet connectivity

You need internet connectivity to have access to the cloud. If there is an internet outage, you will not be able to access your data.

3. Migration

Whether you are transitioning toward cloud computing, or you are migrating from one cloud provider to another, transferring huge amount of data can be time-consuming, and prone to human error. However, businesses can leverage automation solutions such as RPA bots or workload automation to automate data migration processes and avoid human intervention and errors.

4. Costs

The initial cost of an IoT cloud storage base can be costly, especially if the company requires a private domain.

For example, Google Cloud’s pricing plan for an enterprise requiring 5 TB or more of capacity would cost $2,250 a month.

5. Environmental concerns

Even though cloud computing can reduce carbon footprint, that does not mean it’s a completely green platform.

5.1. Cooling costs

Although there’s no on-premise hardware for the users, cloud providers do need to keep their computing facilities running 24/7. And these data centers need to be kept cool. And cooling typically accounts for 40% of total energy consumption (80% if centers are located in warm environments). The latter becomes more worrying when we consider that most of these centers generating clouds are offshore, and thus, more susceptible to environmental damage.

5.2. Floods

Over 95% of the world’s communications traffic is carried by a single under-sea fiber cable. With the rising sea-levels and the resulting risks of flooding, the cables are becoming more vulnerable to disruption, and increasingly dangerous to aquatic life by affecting the stability of the sea beds.

5.3. Rising sea temperatures

Related to the previous point is the idea of underwater data centers. These centers are economical because their heat is released into the ocean. However, this raises oceans’ temperature and exacerbates the effects of climate change.

What are the different IoT cloud platforms?

A company can implement an IoT cloud in three, mutually-not-exclusive ways:

1. IaaS (Infrastructure-as-a-Service)

This is a cloud computing base, where enterprises rent or lease servers for compute and storage in the cloud. Amazon Web Services (AWS) is an example of IaaS, allowing businesses to use its storage space, computing tools, and analytical functionalities on a pay-as-you-go basis.

2. PaaS (Platform-as-a-Service)

A third-party developer provides the user with computing platforms, allowing them to create a customized cloud application tailored to their individual needs. Oracle Cloud is an examples of PaaS, where it allows developers to customize the functionalities for their already-existing application through JavaScript language.

3. SaaS (Software-as-a-Service)

This is when the user pays and gets access to a ready-to-use application, without worrying about installation and/or setup. Google Cloud is an example of SaaS, where, through subscriptions, it allows enterprises to link their IoT devices and store their data on its cloud.

For more on IoT

To learn more about the technologies of IoT, read:

If you are considering building a cloud for your business, we have a data-driven list of cloud consulting services vendors that will help you in the process.

And more generally, if you believe your business would benefit from an IoT solution, we have data-driven list of vendors for different use cases in our IoT hub.

Let us help you too choose the best vendor suited to your needs:

Find the Right Vendors
Cem Dilmegani
Principal Analyst

Cem is the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per Similarweb) including 60% of Fortune 500 every month.

Cem's work focuses on how enterprises can leverage new technologies in AI, automation, cybersecurity(including network security, application security), data collection including web data collection and process intelligence.

Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.

Cem's hands-on enterprise software experience contributes to the insights that he generates. He oversees AIMultiple benchmarks in dynamic application security testing (DAST), data loss prevention (DLP), email marketing and web data collection. Other AIMultiple industry analysts and tech team support Cem in designing, running and evaluating benchmarks.

Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised enterprises on their technology decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.

He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.

Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.

Sources:

AIMultiple.com Traffic Analytics, Ranking & Audience, Similarweb.
Why Microsoft, IBM, and Google Are Ramping up Efforts on AI Ethics, Business Insider.
Microsoft invests $1 billion in OpenAI to pursue artificial intelligence that’s smarter than we are, Washington Post.
Data management barriers to AI success, Deloitte.
Empowering AI Leadership: AI C-Suite Toolkit, World Economic Forum.
Science, Research and Innovation Performance of the EU, European Commission.
Public-sector digitization: The trillion-dollar challenge, McKinsey & Company.
Hypatos gets $11.8M for a deep learning approach to document processing, TechCrunch.
We got an exclusive look at the pitch deck AI startup Hypatos used to raise $11 million, Business Insider.

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