As the Internet of Things (IoT) becomes a reality, millions of devices will be connected to IoT platforms in smart cities. These devices will cater to several areas within a smart city such as healthcare, logistics, and transportation. These devices are expected to generate significant amounts of data requests at high data rates, therefore, necessitating the performance benchmarking of IoT platforms to ascertain whether they can efficiently handle such devices. In this article, we present our results gathered from extensive performance evaluation of the cloud-based IoT platform, FIWARE. In particular, to study FIWARE’s performance, we developed a testbed and generated CoAP and MQTT data to emulate large-scale IoT deployments, crucial for future smart cities. We performed extensive tests and studied FIWARE’s performance regarding vertical and horizontal scalability. We present bottlenecks and limitations regarding FIWARE components and their cloud deployment. Finally, we discuss cost-efficient FIWARE deployment strategies that can be extremely beneficial to stakeholders aiming to deploy FIWARE as an IoT platform for smart cities.