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IoT Explained: A Definitive Guide to the Internet of Things

Author: Helga York
Helga York Article author

The Internet of Things or IoT is a vast network of connected devices that are involved in many activities in our daily lives. IoT devices and systems are used for multiple purposes that affect how we interact with the physical world around us. The uses of IoT networks include designing smart cities, facilitating industrial automation, and controlling autonomous remote machinery.

In this guide, we will look at various aspects of IoT technology including how it works, its advantages and disadvantages, and what it might look like in the future.

What is the Internet of Things?

The Internet of Things (IoT) is the term used for the networks of connected devices as well as the software and hardware technology that enables the devices to communicate with each other and the cloud. IoT systems are made possible through the use of small and inexpensive computer chips combined with high bandwidth telecommunication.

An IoT device can be any man-made object that can transfer data over a network and can be assigned a unique identifier, usually an Internet Protocol (IP) address.

Some examples of items that can serve as an IoT device are vehicles with sensors that warn drivers of maintenance issues, animals with implanted biochips, smart speakers in your automated home, and wearable health monitors.

what is iot

Advances in multiple technologies have been responsible for the increased use and usefulness of IoT systems.

  • • The development of inexpensive and energy-efficient sensors allows them to be embedded in a wide variety of devices.
  • • Public cloud computing services offer businesses the ability to capitalize on the advantages of IoT systems without managing the infrastructure.
  • • Network protocols and wireless connectivity allows sensors to connect to other devices and the cloud.
  • • Machine learning (ML) and analytics enable data gathered from IoT devices to be processed and analyzed to produce actionable insights.
  • • Artificial intelligence (AI) has advanced to bring natural language processing (NLP) to smart devices, making them more attractive to consumers.

How Does the IoT Work?

The following five major components are the main ingredients of IoT architecture.

  • • Devices – Devices are the endpoints of an IoT network and can be as diverse as a heart monitor, a shipping container, or a truck. The devices need to be robust and capable of containing a sensor.
  • • Sensors – Sensors are embedded in IoT devices so data can be collected and shared with other devices or IoT apps. A sensor can be used for many purposes like monitoring environmental factors such as air temperature or rainfall, reporting a vehicle’s speed, or verifying a device’s location.
  • • Networks – Collections of IoT devices form networks designed to perform specific tasks. A network might be implemented to control traffic flowing through a crowded city, keep an assembly line operating at peak efficiency, or let you know when your package should arrive.
  • • Cloud computing services – IoT networks are connected to cloud computing resources where the collected data is stored and processed. Networks need to reliably connect to cloud storage facilities so information can be moved promptly and the appropriate actions can be taken.
  • • IoT applications – The information collected by IoT networks is processed by dedicated IoT applications that analyze and process the raw data. Actions can then be taken based on the type of IoT system in question.

Here’s an outline of how an IoT system works with the building blocks previously described.

  1. A group of devices with embedded sensors are deployed to address a specific problem or monitor some type of entity.
  2. The devices are connected to each other and cloud computing resources through a network so they can exchange data while working toward a common goal.
  3. IoT applications process the data to determine if any action should be taken.
  4. The IoT app communicates with IoT devices to instruct them on how to proceed if actions are deemed necessary.

The basic flow of information is from sensors to apps and back to devices. IoT systems can be fairly simple or extremely complex depending on the underlying systems being monitored or controlled.

Why is the Internet of Things Important?

The importance of Internet of Things systems to the modern world cannot be overstated. IoT systems are transforming industries and the way citizens interact with their environment. As technology continues to evolve at an increasingly rapid pace, IoT systems are vital to our ability to harness these advancements productively.

iot importance

Following are some of the reasons why the IoT is important.

  • • IoT systems help make more informed data-based decisions. The information generated by IoT networks provides organizations with the raw materials required to make business-impacting decisions.
  • • Tracking inventory and managing remote IoT devices equipped with sensors was one of the original ways the IoT was intended to be used. This capability is essential in maintaining the efficiency of the globally-connected supply chain.
  • • Facilitating industrial automation and streamlining manufacturing processes is reshaping the way goods are manufactured and produced across market sectors. Smart assembly lines are more efficient and productive than their manual predecessors.
  • • Increased resource efficiency can be obtained through the use of IoT systems and networks. For example, electricity can be turned off to a facility when all workers have left, saving money and contributing to a greener planet.
  • • Patients can expect improved medical outcomes using embedded IoT devices that allow them to be monitored and provided with medication remotely.
  • • Enhanced quality of life is possible through the use of various IoT devices and networks. Personal health improvements can be made with the help of IoT systems like wearable devices that monitor a person’s vital signs and suggest the appropriate amount of exercise to reach a defined goal. Smart appliances and vehicles also eliminate some mundane tasks and allow an individual to concentrate on more uplifting activities.

Features and Characteristics of Internet of Things Systems

There are some common characteristics of IoT devices that are necessary for the equipment to operate efficiently as part of an IoT network. While the size, shape, and purpose of IoT devices vary widely, certain features are essential for an IoT device to possess.

Following are some common Internet of Things characteristics required by all devices and systems.

  • • Connectivity – Connectivity is the most basic characteristic of IoT devices. Without the ability to connect to a network, a device cannot be considered for inclusion in IoT systems.
  • • Unique identity – Each IoT device must have a unique identity so it can be located and controlled via a network connection.
  • • Intelligence – IoT devices need to have enough intelligence to accurately extract the information required by the system. The process is performed by the integrated IoT operating system.
  • • Scalability – IoT devices and systems need to be designed with scalability in mind as networks continue to expand and are expected to seamlessly handle additional workloads.
  • • Energy usageManaging energy usage can be critically important in remote IoT implementations where it can be difficult to access devices to replace batteries.
  • • Dynamic adaptation – IoT devices used in the field need to adapt to different environmental factors such as reduced sunlight or plummeting temperatures.
  • • Compatibility – In many IoT implementations, multiple device types are needed to produce the desired results. Compatibility between devices is critical when putting together a hybrid IoT system.
  • • Safety – IoT devices need to be built with safety in mind. This refers to the safety and protection of the data generated and the physical safety of the devices themselves.

What are the Different Types of Internet of Things?

IoT can be broadly categorized into five groups based on their intended use and audience. Following are the main types of IoT devices you will encounter.

  • • The Industrial Internet of Things (IIoT) combines the features of cloud computing, analytics, people, and machines to enhance the productivity and efficiency of existing industrial systems. These systems enhance productivity, help reduce waste, identify potential bottlenecks and perform predictive maintenance to keep businesses running smoothly. Industrial IoT applications are found in factories, manufacturing facilities, and other large-scale environments.
    Devices used in IIoT systems need to be ruggedly manufactured to withstand the stresses of industrial processes. Failure of devices in an IIoT system can be disastrous and result in extended downtime and safety concerns for workers and the public at large.


  • • The Consumer Internet of Things includes devices used for consumer applications and usually employs WiFi and Bluetooth for short-range communication. Examples include smart assistants, wearable devices, smart appliances, and smartphones.
  • • The Commercial Internet of Things systems and devices are primarily used to improve customer experiences and drive business efficiency.
  • • The Infrastructure Internet of Things can be seen as a subset of the IIoT and is devoted to developing the infrastructures required by smart cities.
  • • The Internet of Military Things deploys IoT technology in military settings and is used to improve response time, enhance situational awareness, and perform dynamic risk assessments.

Internet of Things Standards and Technologies

The IoT depends on the ability of devices and systems to communicate with each other. This requires a degree of compatibility fostered by IoT standards and protocols.

The basic IoT technology stack consists of four components:

  1. Device hardware consists of the objects used to measure and collect data and in some cases perform actions based on the gathered information.
  2. Device software provides the devices with their apparent intelligence and gives them the ability to perform certain actions autonomously.
  3. Communication using various IoT standards is necessary for an IoT implementation, as the devices need the ability to talk to each other and control applications.
  4. An IoT platform is the entity that collects, manages, analyzes, and processes the data gathered from IoT devices. Many commercial IoT platforms are available from all of the major cloud providers that allow a company to implement an IoT system that meets its business objectives.

Multiple IoT communication technologies exist which can be deployed in different situations to address an IoT system’s required connectivity. Many protocols form the underlying layer of IoT wireless technologies.

Following are some of the common IoT communication protocols appropriate for communicating over various distances:

Short and mid-range protocols

Long-distance and wide-area protocols

Bluetooth and Bluetooth Low Energy optimized for IoT implementation

Narrow-band IoT (NB-IoT)

Radio-frequency identification (RFID)

Advanced Message Queuing Protocol (AMQP)


Cellular (4G/5G)


LTE-Cat M1



Long Range Wide-Area Networking (LoRaWAN)

Some wireless IoT technologies are designed specifically to address the needs of constrained devices that need to work with unreliable connections and low-bandwidth conditions. Two protocols of this type are:

  • • The Constrained Application Protocol (CoAP);
  • • Message Queuing Telemetry Transport (MQTT) has become the preferred protocol for IIoT implementations.

This is just a sampling of the many IoT technologies and standards used to create a more connected and intelligent world.

Advantages and Disadvantages of IoT Systems

There are advantages of Internet of Things systems that make them appealing in a wide range of usage scenarios. This fact is highlighted by the many types of IoT implementations currently on the market and the focus major cloud vendors have on providing IoT platforms for small and mid-sized businesses.

However, as with any type of transformational technology, there are also some potential problems or disadvantages associated with IoT systems.

Let’s look at some Internet of Things pros and cons that may impact the technology’s evolution in the coming years.

IoT benefits

There are many commercial and personal benefits associated with IoT systems. Following are some of the benefits of the Internet of Things systems and networks.

✔️ Cost reduction – IoT systems can produce considerable cost reductions by increasing efficiency or minimizing resource consumption. Examples include turning off lights, modifying indoor temperatures, and watering lawns only when necessary.

✔️ Efficiency and productivity – Automated assembly lines and other IIoT systems increase productivity and efficiency. Systems performing preventative maintenance are responsible for reduced downtime and improved profitability.

✔️ Enhanced business opportunities – Through the collection and analysis of tremendous volumes of information, businesses can make better decisions and capitalize on new trends and opportunities.

✔️ Improved customer experience – The commercial IoT designs systems and products focused on providing a better customer experience to help attract and retain consumers.

IoT disadvantages

The disadvantages of the IoT can be considerable and may need to be considered when developing public policies and regulations around this technology.

Data breaches – Every device in an IoT implementation presents a new attack vector through which hackers can gain access to sensitive information. An additional concern is protecting data as it is transmitted between devices and applications.

Technology dependence – The IoT requires network connectivity at all times. The dependence on this resource presents a potential single source of failure for critical industrial and infrastructure-related IoT systems.

Physical safety – A piece of IoT equipment controlled by a hacker or a malfunctioning application can cause physical harm to workers and citizens.

Increased unemployment – One of the repercussions of advanced automation is the elimination of certain classes of jobs. For example, IoT devices are now responsible for collecting tolls by mail, costing toll-takers their jobs.

Physical and mental inactivity – Excessive automation may result in people relying on devices instead of performing healthy physical and mental activities. Over time, this can lead to physical and mental health issues.

Organizations need to consider the pros and cons of Internet of Things systems and how they mesh with their long-term goals before implementing an IoT solution. The technology may not be appropriate for every situation.

What is the Future of the Internet of Things?

The future of IoT technology depends largely on the balance between its benefits and drawbacks. Let’s look at some of the IoT trends that promise to affect the adoption of the technology in the near future.

  • • The cybersecurity of IoT systems will continue to be a major concern. As IoT technology controls critical infrastructure, IoT devices and networks will pose an attractive target to private and government-backed cybercriminals.
  • • Medical solutions based on IoT technology will become more widespread. Lessons learned about how to harness the power of IoT during the COVID-19 pandemic will help promote better patient outcomes.
  • • The coverage of 5G networks will expand and provide opportunities for new IoT systems.
  • • Artificial intelligence will be the driver of more complex IoT solutions that perform tasks like risk management and predictive maintenance.
  • Smart Cities will take advantage of the smart technologies facilitated by IoT systems to save money, conserve resources, and improve the lives of their citizens.
  • • Legislation and regulations will be developed to address the specific privacy and security concerns of IoT systems.
  • Education industry will benefit from shared environments and smart devices for easy and interactive learning and teaching process.

These Internet of Things trends will be affected by the methods society chooses to employ to control the expansion of the IoT.


The Internet of Things is an example of the convergence of multiple types of technology to furnish previously unimagined solutions and applications. We have looked at the various components and protocols that form the foundation of IoT systems and how they work together to process information. We also touched on the potential benefits and disadvantages of the Internet of Things.

Using the IoT wisely will be a challenge that needs to be effectively addressed for the technology to flourish. Its great potential can be thwarted if industry and society do not take the proper precautions to secure IoT systems and ensure they don’t damage the populace in unexpected ways. If handled correctly, IoT implementations will change all of our lives for the better.