Top IoT Cloud Benefits, Challenges & Platforms
In an IoT ecosystem, devices communicate effortlessly through the cloud. This is much simpler than using traditional, physical servers tucked away in an office. The cloud is popular for handling IoT data because it’s easy to access, can grow fast (scalable), and helps recover data after disasters.
Here we explain what the IoT cloud is, why it’s better than local (on-premise) storage, the different types available, and the top choices on the market.
What is IoT cloud?
An IoT cloud is a large, internet-based network that stores data from IoT devices and their applications.
It includes the servers, storage, and foundational infrastructure needed to handle and process this data in real-time. The IoT cloud also provides the services and rules to connect, monitor, and secure all the different IoT devices.
How does IoT cloud work?
IoT devices use embedded sensors to collect data. This data is then sent to a data center for storage. While some businesses still keep their data centers on-premises, most companies (around 96%) now opt to store their IoT data in the cloud for processing.1
Types of IoT Cloud
Cloud type | Who manages | Key use case(s) |
|---|---|---|
Public | Third-party providers | General data analytics, asset tracking |
Private | Single organization | Highly secure or critical environments (e.g., Industrial IoT) |
Hybrid | Combination of public/private | Scalability with secure data handling at the edge |
Community | Multiple organizations | Specific industry sectors (e.g., healthcare, smart buildings) |
Multicloud | Multiple platforms/vendors | Avoiding vendor lock-in, best-of-breed services |
1. Public cloud
Public clouds are managed by third parties and accessible to users on a pay-as-you-go model. These are widely used in IoT cloud platforms for applications such as data analytics, predictive maintenance, and asset tracking, due to their cost-effectiveness and ability to dynamically scale resources.
- Pros: Very scalable, low upfront infrastructure costs, and flexible for handling huge amounts of data.
- Cons: Potential security concerns, device authentication challenges, and limited transparency.
2. Private cloud
Private clouds cater to IoT systems that require dedicated infrastructure for secure data storage and predictive data analysis, enabling maintenance in critical environments such as industrial IoT or smart buildings.
- Pros: Enhanced security, data visualization, and compliance with third-party standards for IoT projects.
- Cons: Higher costs, requires skilled expertise to manage devices.
3. Hybrid cloud
Hybrid clouds combine public and private cloud technologies, supporting IoT solutions requiring scalability and secure data ingestion. Suitable for managing edge devices in industrial and operational environments.
- Pros: Cost-efficient data processing, lower latency (faster data transfer), secure operations due to distributed platforms.
- Cons: Complexity in managing connected devices and ensuring seamless integration across platforms.
4. Community cloud
Community clouds serve specific sectors, such as healthcare IoT or smart buildings, allowing multiple organizations to share infrastructure and actionable insights while addressing common needs.
- Pros: Cost-sharing, adaptability, and IoT developments tailored to industry-specific requirements.
- Cons: Challenges in sharing management responsibilities and managing large fleets of IoT sensors and other devices.
5. Multicloud
Multicloud involves using multiple IoT cloud platforms, enabling organizations to leverage the best storage and analytics services. This approach avoids vendor lock-in and ensures compatibility with mobile devices and smart devices.
- Pros: Enhanced connectivity options, better data analytics, and improved performance across operational data.
- Cons: Increased complexity, higher costs, and limited interoperability across cloud applications.
Benefits of IoT cloud
1. Accessibility
This infrastructure allows for the mobility of data from multiple devices into a single server, resulting in streamlined storage, analysis, and overview. The on-demand nature of the cloud enables accessibility at any given time and on any device.
2. Scalability
As a business grows in size, so do its IoT devices, and so does the need for increased investment in additional networks and data storage to house the new data.
IoT cloud makes it feasible for a business to integrate additional devices into an existing cloud with minimal costs and minimal need for increased IT infrastructure, such as additional servers or hard drives. With every device that’s added, its content will coherently be placed among the rest 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 used in the production of 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 steel to function.
Consequently, because the collected data is digitally accessible, employees do not have to print it out on paper to view it.
4. Collaboration
With data from IoT devices stored in the cloud and accessible to authorized employees from anywhere, the collaboration between different departments in an organization will be seamless. This will increase teamwork, 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, provide rapid data recovery for all kinds of emergency situations, including natural disasters, individual errors, or power outages.
20% of cloud users reported that their disaster recovery process was completed in four hours or less, compared to 9% of non-cloud users.2
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 concerns with cloud computing.3 If a bug is found in the cloud provider’s network, hackers could potentially access not only your data but also that of other subscribers.
2. Internet connectivity
You must have an internet connection to access the cloud service. If your internet goes down, you lose access to your data.
3. Migration
Whether you are transitioning to cloud computing or migrating from one cloud provider to another, transferring large amounts 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 minimize human intervention and errors.
4. Costs
The initial setup cost for an IoT cloud can be high, especially if your company needs a dedicated private domain.
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. Cooling typically accounts for 40% of total energy consumption (80% of centers are located in warm environments).4
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.5 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 the 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 mutually-exclusive ways:
1. IaaS (Infrastructure-as-a-Service)
This is a cloud computing-based service, where enterprises rent or lease servers for computing 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 offers a computing platform (hardware and software tools) that developers can use to create custom applications. You focus on the code, not the infrastructure. Oracle Cloud is an example of PaaS, which allows developers to customize the functionalities of their already existing applications through JavaScript.
3. SaaS (Software-as-a-Service)
This is when the user pays and gains access to a ready-to-use application, eliminating the need for installation and setup. Google Cloud is an example of SaaS, which allows enterprises to link their IoT devices through subscriptions and store their data on its cloud.
The role of cloud computing in the Internet of Things
Cloud computing is essential for making the Internet of Things (IoT) effective. While IoT devices constantly generate a massive amount of data, cloud computing provides the infrastructure and pathway needed for that data to be stored, processed, and accessed efficiently.6
The core role of the cloud in IoT is to work together to store all the generated IoT data, making it easily accessible whenever needed. This is also the easiest way to move large data packets across the Internet.
This partnership delivers several key benefits:
- Speed and flexibility: Cloud platforms offer the speed and flexibility necessary to quickly provide resources to developers working on IoT applications.
- Flexible capacity: There is no need to guess how much storage or computing power you’ll need ahead of time. The cloud can scale to accommodate the increasing data volume from your IoT devices.
- Cost savings: You only pay for the resources you actually use. As your operation scales up, the cost savings often become greater.
- Global deployment: Platforms can be deployed and available worldwide in just minutes.
Further reading
- A General Guide to Internet of Everything (IoE)
- A Deep Dive into IoT Architecture & Top 10 Components
- IoT Implementation Tutorial: Steps, Challenges, Best Practices
Reference Links
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE and NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and resources that referenced AIMultiple.
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.
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