What is IoT? Explanation of the Internet of Things

What is IoT? Explanation of the Internet of Things

The term IoT, or Internet of Things, refers to a collective network of interconnected devices and technologies that facilitate communication between devices and the cloud, as well as between the devices themselves. Thanks to the availability of inexpensive 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 gather data and intelligently respond to users.  

Internet of Things (IoT) integrates the "everything" of everyday life with the internet. Computer engineers have been adding sensors and processors to everyday objects since the 90s. However, early progress was slow due to the large size of the chips and their space consumption. Low-power computer chips known as RFID tags were first used to track expensive equipment. As the size of computer devices has shrunk, these chips have become smaller, faster, and smarter over time.

The cost of integrating computing power into small objects has now significantly decreased. For instance, you can add connectivity with Alexa voice service capabilities to an MCU with less than 1 MB embedded RAM, like a light switch. The entire industry has grown with a focus on filling our homes, businesses, and offices with IoT devices. These "invisible computing devices" can automatically transmit data to and from the internet. All these interconnected "unseen computing devices" and the associated technologies are collectively referred to as the Internet of Things (IoT).

How Does IoT Work?

The common IoT system operates through the real-time collection and exchange of data. An IoT system consists of three components:

Smart Devices

These are devices, such as televisions, security cameras, or exercise equipment, that have been endowed with computational capabilities. These devices gather data from the environment, user inputs, or usage patterns, and communicate the data over the internet to and from IoT applications.

IoT Applications

IoT applications comprise a collection of services and software that integrate the data received from various IoT devices. These applications utilize machine learning or artificial intelligence (AI) technology to analyze the data and make informed decisions. These decisions are then communicated back to the IoT devices, which intelligently respond to such inputs.

Graphical User Interface

IoT devices or a fleet of devices can be managed through a graphical user interface. Common examples include mobile applications or websites that can be used to register and control smart devices.

Graphical User Interface

What Are Some Examples of IoT Devices?

Let's explore a few instances of current IoT systems:

Connected Vehicles

There are various ways to connect vehicles, such as cars, to the internet. This can be achieved through dashboard cameras, infotainment systems, or even vehicle-connected gateways. These systems collect data from accelerators, brakes, speedometers, odometers, wheels, and fuel tanks to monitor both driver performance and vehicle conditions. Connected vehicles serve several purposes:

  • Monitoring rental car fleets to enhance fuel efficiency and reduce costs.
  • Assisting parents in tracking their children's driving behavior.
  • Automatically notifying friends and family in case of a collision.
  • Predicting and preventing vehicle maintenance needs.

Connected Homes

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

Connected home devices can be used to:

  • Automatically power off unused appliances.
  • Manage and maintain rental properties.
  • Locate misplaced items like keys or wallets.
  • Automate daily tasks like vacuuming, coffee making, etc.

Smart Cities

The application of IoT has made urban planning and infrastructure maintenance more efficient. Governments employ IoT applications to address issues in infrastructure, healthcare, and the environment. IoT applications can be utilized to:

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

Smart Buildings

Buildings like university campuses and commercial structures use IoT applications to drive greater operational efficiency. IoT devices can be employed in smart buildings to:

  • Minimize energy consumption.
  • Lower maintenance costs.
  • Optimize workspace utilization.

What is Industrial IoT?

Industrial IoT (IIoT) refers to smart devices employed in manufacturing corporations, retail, healthcare, and more to achieve business efficiency. Industrial devices, from sensors to equipment, provide business owners with real-time detailed data that can be utilized to enhance business processes. These devices offer insights into supply chain management, logistics, human resources, and production – resulting in cost reduction and increased revenue flow.

Let's explore the smart industrial systems present across various verticals:


In the manufacturing sector, Corporate IoT employs predictive maintenance to reduce unplanned downtime and implements technology to enhance worker safety. IoT applications can predict machine failures before they occur, thereby minimizing production downtime. Wearables such as helmets and wristbands, along with computer vision cameras, are utilized to alert workers about potential hazards.


Analytics and sensor-driven robotics enhance efficiency in automobile manufacturing and maintenance. For instance, industrial sensors are employed to provide real-time 3D images of internal vehicle components. Diagnostics and troubleshooting can be carried out much faster, while IoT systems automatically order replacement spare parts.

Logistics and Transportation

Commercial and Industrial IoT devices assist in supply chain management, encompassing inventory management, vendor relationships, fleet management, and scheduled maintenance. Shipping companies employ Industrial IoT applications to track assets and optimize fuel consumption on shipping routes. The technology proves particularly beneficial for stringent temperature control in refrigerated containers. Supply chain managers make informed predictions through smart routing and rerouting algorithms.


Amazon is driving innovation in automation and human-machine collaboration in the retail sector. Amazon's facilities leverage internet-connected robots to track, locate, sort, and move goods.

How Can IoT Enhance Our Lives?

The Internet of Things (IoT) has a profound impact on human life and work. IoT enables machines to handle heavy lifting, take over mundane tasks, and make life healthier, more productive, and convenient.

For instance, connected devices can transform your entire morning routine. When you hit the snooze button, your alarm clock will automatically start your coffee machine and open your window blinds. Your refrigerator will also autonomously detect depleted food items and order them for delivery. Your smart oven will suggest today's menu — it might even cook pre-prepped ingredients and ensure your lunch is ready. Your smartwatch will schedule a meeting as your connected car automatically sets the GPS for a refueling stop. The opportunities are limitless in the world of IoT!

Benefits of IoT for Businesses

Accelerate Innovation

The Internet of Things (IoT) provides businesses with access to advanced analytics that unlock new opportunities. For instance, businesses can create highly targeted advertising campaigns by collecting data on customer behavior.

Transform Data into Insights and Actions with AI and ML

The 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. This service can be used to proactively provide customer support and build customer loyalty.

Enhance Security

Ongoing monitoring of digital and physical infrastructure can optimize performance, increase efficiency, and reduce safety risks. For instance, 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 enhance satisfaction. For instance, trending products can be restocked promptly to avoid shortages.

What are the IoT Technologies?

The technologies used in IoT systems include:

Edge Computing

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

Cloud Computing

Cloud technology is used for remote data storage and IoT device management, allowing data to be accessed by multiple devices within the network.

Machine Learning

Machine learning pertains to 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 at the edge.

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