Iot Explained: How Does It Actually Work?

4 years ago

The Internet Of Things describes the network of physical objects that are embedded with sensors, software and other technologies for the purpose of connecting and exchanging data with other devices and systems over the Internet. These devices range from ordinary household objects to sophisticated industrial objects. With more than 7 billion connected IoT devices today, experts are expecting this number to grow to 10 billion by 2020 and 22 billion by 2025.

Basic Glimpse of IoT:

What is an IoT? The Internet of Things, or IoT, is a system of interrelated computing devices , digital and mechanical machines, objects that are provided with unique identifies (UIDs) and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.

A thing in the Internet of Things can be any person with heart monitor implant, a farm animal with a biochip transponder, an automobile that has inbuilt sensors to alert the driver when tire pressure is low or any natural or man-made object that can be assigned an Internet Protocol(IP) address and is able to transfer data over a network.

Increasingly, organizations in a variety of industries are using IoT to operate more efficiently, to better understand customers, to deliver enhanced customer service, to improve decision-making and increase the value of business.

Why Is Iot So Important?

Over the past few years, IoT has become one of the most important technologies of the 21st century. Now we can connect with everyday objects like kitchen appliances, cars, baby monitors, etc. to the internet via embedded devices, seamless communication is possible between people, processes and things.

By means of low cost computing, the cloud, the big data analytics, and mobile technologies, physical things can be shared and data can be collected with minimum human intervention. Also, In this hyper connected world, digital systems can record, monitor, and adjust each interaction between connected tools.

IoT Explained:

A complete IoT system consists of four distinct components:

  1. Sensors/Devices
  2. Connectivity
  3. Data Processing
  4. User Interface

1.) Sensors/Devices: Firstly, Sensors or Devices collect data from their environment. This could be either as simple as reading temperature or as complex as full video feeding. Multiple sensors can be bundled together or sensors can be part of a device that does the work. For example, a phone, having multiple sensors ( camera, GPS, etc ) but a phone is not just a sensor. Be it a sensor or a device, the first step is collecting data from their environment.

2.) Connectivity: Second is Connectivity. the collected data is sent to the cloud. The sensors/devices can be connected to the cloud through a variety of methods like cellular, satellite, WiFi, Bluetooth, Low Power Wide Area Networks (LPWAN), or connecting directly to internet via ethernet. Choosing which connectivity option best comes down to specific IoT application, but they all accomplish same task: getting data to cloud.

3.) Data Processing: Once data gets to the cloud, software performs some kind of processing on it. This cloud is either very simple, such as the temperature reading or it can e very complex such as using computer vision on video to identify objects. Data is processed when something is detected like when the temperature is very high or an intruder is detected on video.

4.) User Interface: Next, Information is made useful to the end user in some way. This could be via an alert to the user(email, text, notification,etc). Also, a user might have an interface that allows them to check it on the system. This depends on the IoT application, the user may also be able to perform an action and affect the system. Some actions are performed automatically.

What are IoT Applications?

Business-Ready, SaaS IoT Applications

IoT Applications are prebuilt software-as-a-service(SaaS) applications that can analyze and present captured IoT sensor data to business users via dashboards. IoT applications use machine learning algorithms to analyze massive amount of connected sensor data on cloud. Machine learning based algorithms can identify equipment anomalies and send alerts to users and can trigger automated fixes or proactive counter measures. With cloud IoT applications, there is not need to recreate entore business processes.

Top 5 IoT Applications and what they do:

  • Create new efficiencies in manufacturing through machine monitoring and product quality monitoring
  • Improve the tracking and "ring-fencing" of physical assets
  • Drive efficiencies and new possibilities in existing processes
  • Enable business process changes
  • Use wearables to monitor human health analytics and environmental conditions

Which Industries can benefit from IoT?

  • Automotive
  • Manufacturing
  • Retail
  • Transportation and Logistics
  • Public Sector
  • Health care


An IoT System basically works with sensors/devices, connectivity, data processing and user interface to build up an IoT Application. This is what an IoT Platform includes. The sensors/devices talk with the cloud with some kind of connectivity. Then, the data is processed and allows the user to interact with an interface. Any adjustments or actions that the user makes are then sent in opposite direction through the system: from the user interface, to the cloud and then back to sensors/devices to make any change.

Thanks For Reading!

Frequently Asked Questions

An Internet of Things describe the network of physical objects that are embedded with sensors and connectivity with the purpose of exchanging data.

An IoT includes: sensors/devices, connectivity, data processing and user interface.