The business value of IoT interoperability

Updated: Apr 22

Interoperability: characteristic of a product or system (…) to work with other products or systems, present or future, without any restrictions in either implementation or access[1].

Without entering into the debate between compatibility, standard de facto and interoperability (partial or total), we are forced to note that being interoperable is one of these apparently obvious characteristics and that few projects actually address: in the field of the Internet of Things, this is usually limited to offering an API allowing access to connected digital platforms, devices or services. A necessary first step, but the next ones are much less clear.

What do the experts say?

In an earlier but comprehensive study (The Internet of Things: mapping the value beyond the Hype[2]), McKinsey estimated that “… situations in which two or more IoT systems must work together can account for about 40 percent of the total value that can be unlocked by the Internet of Things.”

One of the interesting results of this study is the breakdown of IoT projects spending. Of course, the figures are average estimates, and each situation must be analyzed in its own context, but it is likely that the distribution is relatively constant regardless of the project. This decomposition will not really surprise readers familiar with cost studies in ICT projects in general; we recall it here in a simplified representation (average values, base 100):

That said, let's have a look at the value of interoperability at the start of an IoT project and then during its life cycle.

At the beginning of an IoT project

At the start of a project, interoperability mainly offers a functional value. It allows you to:

  • Combining devices of a very diverse nature, even going so as to correspond to apparently disjointed sectors of activity;

  • Mixing technologies; for example for radio networks, part of the park may consist of devices connected to LPWAN (Lora, Sigfox), another use mobile infrastructure networks (nb-IoT, 2/3/4G) and finally a last part being connected to local networks (Wifi, Zigbee);

  • Use web applications and services within the project (business productivity applications, weather, air quality, traffic measurement, etc.)

The main value associated with interoperability at the beginning of an IoT project is business alignment and functional richness of the project, which thus supports business processes much better aligned with the initial project objectives: optimization of an activity (production, logistics, data capture, efficient irrigation, etc.), new service or product for customers or the public, etc.

Interoperability enables the definition and design of a project to be refocused on the client's needs, by dissociating the functional scope from the technical constraints which will undoubtedly arise when the needs are projected on the reality of the available solutions: what seems difficult to achieve becomes finally possible.

Throughout the life of an IoT project

In general, IoT projects do not happen overnight; their functionalities will have to be gradually enriched and adapted to new, sometimes unsuspected, requests at the origin of the project. Systemic interoperability allows to:

  • Develop the functional scope of the project, thanks to the ease of adding new connected devices and services, which could only have been gradually identified during the operation phase;

  • Select the most suitable suppliers throughout the life of the project, avoiding monopolistic situations among hardware and software vendors;

  • Extend the lifespan of existing infrastructure, allowing the mix of different generations of devices and eliminating forced "upgrades" when they are functionally useless.

The main values associated with interoperability throughout the life of a project are functional agility and budget control (TCO – total cost of ownership).

Impact frame

We summarize as simply as possible the importance of having a comprehensive interoperability solution, based on two fundamental criteria for IoT projects:

  • The expected lifespan for the project: short for tactical projects, experiments, etc.; very long (up to 20 years) for large infrastructure projects (smart meters, utilities, heavy industrial infrastructure, smart cities, etc.).

  • The level of diversity of devices and services connected within the IoT project: low for a narrow functional scope with little subject to change; very important in the case of broad business processes implementing many different sensors and actuators, various applications and services along with a functional definition prone to evolution.

IoT projects with a limited scope, unlikely to evolve and with a fairly short lifespan probably do not require to question their interoperability: they are self-sufficient, and everything else will be unnecessary complication.

On the other hand, IoT projects which are designed to last a long time and whose mission requires the combination of a large number of connected objects and services must, from their definition, consider as essential the implementation of a systemic interoperability solution which will optimize their functional flexibility and give them control over the life cycle.


We tried to draw the attention of IoT decision-makers and project managers to the importance of having a solution guaranteeing interoperability within (and with the periphery) of their projects, according to their objectives.

Interoperability cannot be reduced to the existence of APIs providing accessibility on the different components: you still need to know what to do with it, at what price, with what flexibility and what control throughout the life of the project.

You agree ? Not really okay? Not agree at all ? Do you have past, present or future examples of such projects? Continue the discussion on social networks ( or contact us at contact(at)

[1] by AFUL.

[2] Link to "The Internet of Things: mapping the value beyond the Hype"