David Merrill

Case Studies on IoT Economics

Blog Post created by David Merrill on Nov 15, 2016

My previous 2 blogs have setup the scenarios that require a new, lower total cost per node when considering IoT architectures. Now for some proof points.


One of my observations around driving down the cost of a data lake node hinges on the trend to build VM (or nodes) with large storage pools. 6-10 TB storage pools are not uncommon for an IoT data lake node, and if traditional VM designs are used (RAID, FC, higher-performance servers, data protection, etc) the cost for these data lakes would be unsustainable. And we would see the IoT initiative crushed by the total cost of the platforms. So lets look at some of the cross over points related to storage per node.



In the above graphic, we are comparing the cost of acquisition (price only) of Vblock, HP and HDS converged solutions to a net-new IoT node specially built for data lakes with all the lower-cost features mentioned in the previous blog. There are several cross-over points with the orange line (Hitachi Scale-out Platform or HSP) based on different vendor solutions for this client, but even with different and improving converged solutions, the new IoT node is economically better for nodes with more than 2 TB of storage. Some of the CI solutions lost their economic advantage at only 500 GB per node. The take-away from this one example is that if the data lake nodes only require 500-2,000 TB per node, then the acquisition price may be OK with a traditional CI solution. Now we know that price is only a fraction of the total cost (about 25%), so even this graphic does not tell the entire story of low TCO requirements for IoT nodes.


IoT nodes, and specifically data lake nodes will have high storage content, and without the right design and economics might break the bank for the IoT infrastructure build-out.


Another way of looking for the sweet spot for low-cost IoT nodes is with the total cost view. One recent customer experience allowed us to compare the total cost of traditional VMs that for them, averaged at 115-135 GBP per VM/month. We set a target to deliver IoT nodes in the 20-30 GBP range.



Again the sweet spot for these new types of IoT nodes was in the 1-4 TB per vCore, at a TCO that was substantially lower than current architectures could provide


When making plans for net-new IoT projects, platforms and technology, be sure to spend some time determine best price and best total cost for these nodes. The rate of growth, and the size of data lakes usually require a fundamentally lower unit cost solution than what may be used for traditional virtual machine workloads in the data center.