What is the Internet of Things (IoT)?

The term IoT, or Internet of Things, refers to the collective network of connected devices and technologies that facilitate communication between devices and the cloud, as well as between the devices themselves. Thanks to the advent of cheap computer chips and high-bandwidth telecommunications, we now have billions of devices connected to the internet. This means everyday devices like toothbrushes, vacuum cleaners, cars and machines can use sensors to collect data and respond intelligently to users.

The Internet of Things (IoT) integrates “everything” every day with the internet. Computer engineers have been adding sensors and processors to everyday objects since the 90s. However, progress was initially slow because the chips were large and took up a lot of space. Low-power computer chips called RFID tags were first used to track expensive equipment. Due to the shrinking size of computer devices, these chips are also getting smaller, faster and smarter over time.

The cost of integrating computing power into small objects is now much reduced. For example, you can add connectivity with Alexa voice service capabilities to an MCU with less than 1 MB of embedded RAM, such as a light switch. Entire industries have grown up focused on filling our homes, businesses, and offices with IoT devices. These smart objects can automatically transmit data to and from the internet. All these “invisible computing devices” and their associated technologies are collectively referred to as the Internet of Things (IoT).

How does IoT work?

Typical IoT systems work through collecting and exchanging data in real time.

An IoT system has three components:

Smart Device

These are devices, such as televisions, security cameras, or exercise equipment that have been given computing capabilities. These devices collect data from the environment, user input, or usage patterns and communicate the data over the internet to and from IoT applications.

IoT Application

An IoT application is a collection of services and software that integrates data received from various IoT devices. This application uses machine learning or artificial intelligence (AI) technology to analyze this data and make informed decisions. These decisions are communicated back to the IoT device and the IoT device then responds intelligently to the input.

Graphical User Interface

IoT devices or fleets of devices can be managed via a graphical user interface. Typical examples include mobile apps or websites that can be used to register and control smart devices.

What are examples of IoT devices?

Let’s look at some examples of IoT systems in use today:

Connected Car

There are many ways to connect vehicles, such as cars, to the internet. This method can be through a dashboard camera, infotainment system, or even the vehicle’s connected gateway. They collect data from the accelerator, brakes, speedometer, odometer, wheels, and fuel tank to monitor both driver performance and vehicle condition. Connected cars have a variety of uses:

  • Monitor rental car fleet to improve fuel efficiency and reduce costs.
  • Helps parents track their child’s behavior while driving.
  • Automatically notify friends and family if a car collides.
  • Predict and prevent vehicle maintenance needs.

Connected Home

Smart home devices primarily focus on improving home efficiency and safety, as well as improving the home network. Devices such as smart outlets monitor electricity usage and smart thermostats provide better temperature control. Hydroponic systems can use IoT sensors to manage gardens, while IoT smoke detectors can detect tobacco smoke. Home security systems such as door locks, security cameras, and water leak detectors can detect and prevent threats, as well as send notifications to homeowners.

Connected devices for the home can be used to:

  • Automatically turn off unused devices.
  • Management and maintenance of rental properties.
  • Find misplaced items such as keys or wallet.
  • Automate daily tasks like vacuum cleaning, making coffee, etc.

Smart City

IoT applications have made urban planning and infrastructure maintenance more efficient. Governments are using IoT applications to address problems in infrastructure, health, and the environment. IoT applications can be used to:

  • Measures air quality and radiation levels.
  • Reduce energy bills with a smart lighting system.
  • Detect maintenance needs for critical infrastructure such as roads, bridges and pipelines.
  • Increase profits through efficient parking management.

Smart Building

Buildings such as university campuses and commercial buildings are using IoT applications to drive greater operational efficiency. IoT devices can be used in smart buildings to:

  • Reduce energy consumption.
  • Lower maintenance costs.
  • Utilize the workplace more efficiently.

Air Conditioner (AC)

Air Conditioner uses IoT applications to increase usage efficiency. IoT devices can be used for:

  • Find out the total assets of the company’s AC units
  • Know the condition of the AC unit in real time
  • Can control the AC unit remotely
  • Can predict the performance condition of the AC unit
  • Can provide historical information on AC unit performance and maintenance
  • Can find out the AC unit’s electricity usage

What is Industrial IoT?

IoT Industri (IIoT) refers to smart devices used in manufacturing, retail, healthcare and other corporations to create business efficiencies. Industrial devices, from sensors to equipment, provide business owners with detailed, real-time data that can be used to improve business processes. The tools provide insights into supply chain management, logistics, human resources and production – reducing costs and increasing revenue streams.

Let’s take a look at existing smart industrial systems across various verticals:


Corporate IoT in manufacturing uses predictive maintenance to reduce unplanned downtime and wearable technology to improve worker safety. IoT applications can predict machine failures before they occur, which reduces production downtime. Wearables in helmets and wristbands, as well as computer vision cameras, are used to alert workers to potential hazards.


Sensor-driven analytics and robotics improve efficiency in automobile manufacturing and maintenance. For example, industrial sensors are used to provide 3D images of internal vehicle components in real time. Diagnostics and troubleshooting can be done much faster while the IoT system orders replacement parts automatically.

Logistics and Transportation

Commercial and Industrial IoT devices can assist in supply chain management, including inventory management, vendor relationships, fleet management, and scheduled maintenance. Shipping companies use Industrial IoT applications to track assets and optimize fuel consumption on shipping routes. The technology is especially useful for tightening temperature control in refrigerator containers. Supply chain managers make informed predictions through smart routing and rerouting algorithms.


Amazon is driving innovation in automation and human-machine collaboration in retail. Amazon facilities utilize internet-connected robots to track, find, sort and move goods.

How can IoT improve our lives?

The Internet of Things (IoT) has a broad impact on human life and work. IoT enables machines to do the heavy lifting, take over tedious tasks, and make life healthier, productive, and comfortable.

For example, connected devices can change your entire morning routine. When you press the snooze button, your alarm clock will automatically turn on the coffee machine and open your window blinds. Your refrigerator will also automatically detect the last ingredients and order them for home delivery. Your smart oven will tell you what’s on the menu for the day — perhaps even cooking pre-made ingredients and making sure your lunch is ready. Your smartwatch will schedule a meeting while your connected car automatically sets the GPS to stop for gas. Unlimited opportunities in the world of IoT!

What are the benefits of IoT for business?

Accelerate innovation

The Internet of Things (IoT) gives businesses access to advanced analytics that open up new opportunities. For example, businesses can create highly targeted advertising campaigns by collecting data on customer behavior.

Turn data into insights and action with AI and ML

Collected data and historical trends can be used to predict future outcomes. For example, warranty information can be paired with data collected by IoT to predict maintenance incidents. These services can be used to proactively provide customer service and build customer loyalty.

Improve security

Continuous monitoring of digital and physical infrastructure can optimize performance, increase efficiency, and reduce safety risks. For example, data collected from onsite monitors can be combined with hardware and firmware version data to automatically schedule system updates.

Scale differentiated solutions

IoT technology can be deployed in a customer-focused manner to increase satisfaction. For example, trending products can be restocked immediately to avoid shortages.

What is IoT technology?

Technologies used in IoT systems include:

Edge computing

Edge computing refers to technology used to enable smart devices to do more than just send or receive data to their IoT platforms. This computation increases computing power at the edge of the IoT network, reduces communication latency, and improves response time.

Cloud computing

Cloud technology is used for remote data storage and IoT device management – so data can be accessed by multiple devices on the network.

Machine learning

Machine learning refers to the software and algorithms used to process data and make real-time decisions based on that data. These machine learning algorithms can be deployed in the cloud or edge.



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