What is Internet of Things (IoT)?

What is Internet of Things (IoT)?

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The Internet of Things (IoT) encompasses all devices, software, and physical objects with sensors and network connectivity that enable data exchange with one another over the internet and other communication channels
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8 minutes 30 seconds read
Publish Date
8 minutes 30 seconds read
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Table of contents:

What is the Internet of Things? 

The Internet of Things (IoT) encompasses all devices, software, physical objects with sensors and network connectivity that enable data exchange with one another over the internet and other communication channels. These devices or smart objects can be anything — ranging from industrial equipment and transportation systems to smart thermostats and wearable devices — capable of communicating with other devices over a network. 

In short, IoT is a network where devices are interconnected and embedded. These devices can capture and transfer data to one another without human intervention — as long as there is internet connectivity. Some classic examples of such data transfer where no human is involved in the process are traffic monitoring, smart health monitoring, smart grid, robots in hospitals, and water supplies. 

The application of IoT is vast and immense, which is already visible in a host of industries like manufacturing, healthcare, agriculture, and transportation. The proliferation of IoT devices connected to the internet is fueled by cheap computer chips and high bandwidth telecommunication. This has made it possible to utilize even our daily-use devices like toothbrushes, cars, vacuums, and other machines in collating data and responding smartly to users.   

Understanding the basics of IoT

With a solid definition of IoT under our belts, let's turn to examining its components.

IoT components:

IoT components form the foundational elements of an Internet of Things (IoT) system, complemented by the overarching IoT platform. They encompass sensors, actuators, embedded systems, gateways, and cloud services, collaboratively collecting, transmitting, and analyzing data for automation and efficient management across diverse domains. Let's delve deeper into these essential components

(i) Devices and sensors: The basic components in IoT are physical objects built to communicate with the actual world in some form. For example, the device can be a sensor on an assembly line or an intelligent security camera. In brief, these devices are designed to sense anything taking place in the surrounding environment. 

Similarly, IoT sensors are also built to detect and respond to conditions in the real environment. Some of the most commonly utilized IoT sensors are:

  • Image sensors
  • Temperature sensors
  • Motion sensors
  • Level sensors
  • Pressure sensors
  • Smoke sensors
  • Proximity sensors
  • Humidity sensors
  • Chemical sensors
  • Gas sensors
  • Infrared (IR) sensors
  • Acceleration sensors
  • Optical sensors

(ii) Connectivity technologies: These technologies can be the core components of IoT like wifi and Bluetooth. IoT devices must have a connectivity network to connect to other devices with the help of wifi (a cellular network) or LPWAN. These technologies facilitate functionalities like controlling a remote monitor and exchanging data. 

(iii) Data processing and analytics: As a component and characteristic feature of IoT, data analytics is elementary. It is paramount to collect, analyze, and interpret data generated by IoT devices, which can be sensors, wearables, smart appliances, and other connected devices capable of collecting and transmitting data through the Internet.

(iv) User interface (UI) and experience: Sensor devices collect data and send it to the cloud over a network to be transformed into helpful information. This is done through the UI and the information is delivered to the end user. UIs have features that help users interact with computer systems. They are software and applications on computers and smartphones, including pages, screens, icons, buttons, forms, etc. 

What is IoT architecture?

IoT architecture is the confluence of devices, network structure, and cloud technology that helps IoT devices communicate and transfer data. The IoT architecture, at a basic level, has three layers — perception (sensors and gadgets), network (connectivity between devices), and application (the layer on which users interact). 

Two important features of IoT architecture are edge computing and cloud computing. 

Edge computing: Edge computing refers to a distributed IT architecture in which data is processed very close to the originating source. In the parlance of IoT architecture, it means processing data closer to the IoT hardware but not transporting it for procession in an on-premises data center or to the cloud. 

Cloud computing: Cloud IoT helps in connecting IoT devices to servers located in cloud data centers. This facilitates and enables real-time data analytics, resulting in better information-driven decision-making, optimization, and risk mitigation. Cloud IoT also helps in the easy management of connected devices when it is on a large scale. It contributes to data storage, scalability, maintenance, flexibility, cost, etc. 

Advantages of IoT

IoT can be immensely beneficial to the modern world, which is run virtually by technology. It can lead to:

  • Increased efficiency and productivity: IoT can contribute through its predictive analysis and help by forecasting any exigencies in the production line. It prevents downtime during the process, thereby boosting efficiency and productivity levels.  
  • Improved data collection and analysis: IoT enables real-time data collection from all connected devices, remote or on-site. This can be greatly beneficial in terms of swift decision-making and predictive maintenance. This also results in making more well-informed decisions because of the accuracy and predictive analysis. 
  • Cost-effective and resource optimization: IoT lends support to better business operations, efficient functioning of productions, preventing mishaps and thereby saving massive costs for companies throughout any project.  
  • Improved user experience: It has been argued that everything under the IoT umbrella provides better user experiences than non-connected devices. While IoT now pervades our everyday lives, organizations using it can provide much better UI, drawing in more customers and scaling their businesses. It has been turned into a reality by IoT. 

Read more on the benefits of IoT

Concerns and challenges of IoT

Despite all the benefits examined above, companies can still face several hurdles while deploying IoT solutions. Problems like connectivity, integration and data security often crop up while implementing it. Even though IoT has transformed industries in the last two decades, obstacles and challenges remain. Some of the key concern areas in IoT are:

Security: IoT has billions of devices connected throughout the world. This lays bare the threat to the data security of the IoT devices exposed to cyberattacks. One inherent problem is the limited power supply the IoT devices have at their disposal. Adding encryption technology to these devices consumes a lot of power, hampering their ability to transmit data.

Connectivity issues: It is a core problem for IoT technology as the devices need uninterrupted connectivity to analyze and transmit data. This is a common challenge faced by companies in their efforts to implement IoT. 

Scalability: It is a perennial problem in IoT businesses. Deploying devices in new locations worldwide calls for connectivity, which can be overwhelming for organizations to pursue different service providers with different operating rules. This often results in endless delays, hampering business growth and profitability.

Interoperability: Not all devices are compatible with others. So, changing the hardware or tweaking devices to pair them with other connected devices is a huge challenge for now. 

Remote accessibility: IoT devices constantly need connectivity to function seamlessly. Running the devices on a consumer’s wifi or ethernet needs support personnel to visit the site. This can be very expensive, but also the only way to troubleshoot a device. This drives up the cost for an IoT company considerably.

Inferior battery life: As mentioned above, most IoT devices have a lower than desired battery life because they are small in size. These smart objects are smaller in size because they need to be accommodated in smaller cases. To install a larger battery could be damaging in most devices, especially sensors. So, most IoT devices have to deal with a short battery life.

There are other challenges to deploying IoT that organizations are dealing with currently and trying to find solutions to, as well. These challenges may remain, but newer solutions are also coming up to make IoT more rampant in the world due to its innumerable benefits.


The IoT space is ever-evolving and will become more relevant in the future. With the advent of faster connectivity like 5G, IoT is only going to provide more benefits. The integration of machine learning and AI is drawing up the roadmap for a better outcome in IoT services

The rapid growth of blockchain technology is also going to revolutionize the IoT landscape and the future holds promises. The use of IoT in smart cities is improving the quality of life of the residents while simultaneously reducing maintenance costs. Ranging from RFID tags to other meters, IoT has contributed to collecting real-time data for future analysis in these smart cities.

IoT can also make a huge difference in environmental sustainability, which is already visible to a large extent. Most governments and organizations are working relentlessly to develop newer technology so that life becomes comfortable and there is better conservation of the environment. With IoT, it is a reality in the offing.

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