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What is IoT?

The Internet of Things (IoT) is a network of connected objects and devices (aka “things”) that are equipped with sensors (and other technologies) that allows them to transmit and receive data – to and from other things and systems. Today IoT is used extensively in industrial settings (IIoT) and is synonymous with Industry 4.0.

IoT definition in detail

In the most general of terms, the Internet of Things includes any object – or “thing” – that can be wirelessly connected to an Internet network. But today, IoT has more specifically come to mean connected things that are equipped with sensors, software, and other technologies that allow them to transmit and receive data – for the purpose of informing users or automating an action. Traditionally, connectivity was achieved mainly via Wi-Fi, whereas today 5G and other types of network platforms offer the promise of handling huge data sets, almost anywhere, with speed and reliability.

What is the IoT

Once IoT devices collect and transmit data, the ultimate point is to learn as much as possible from it, and make it deliver increasingly accurate and sophisticated outputs and insights. This is where AI technologies come into play: augmenting IoT networks with the power of advanced analytics and machine learning. 

History of IoT

In 2021, there were over 10 billion IoT devices in the world, and by 2025, the IDC expects global data generation to exceed 73 zettabytes – which is equal to 73 trillion gigabytes. Although we can’t really quantify digital data in physical terms, we can say that if all that data were converted into 1990s floppy disks – and they were laid out end to end – they could go to the moon and back over 5,000 times.


In just a few decades, IoT data has grown exponentially, and that’s likely to continue. So what set off this Internet of Things boom? For IoT to evolve, a specific set of technologies had to come together and advance concurrently.



  • Connectivity: Evolving from humble modem-based beginnings, today’s Internet and cloud connectivity is now sufficiently fast and robust enough to send and receive enormous volumes of data and support the IoT’s exponential growth. 
  • Sensor technology: With the steady rise in demand for IoT sensor innovation, the market went from a few costly, niche providers to a highly globalized and price-competitive sensor manufacturing industry. Since 2004, the average price of IoT sensors has dropped by over 70%, accompanied by a demand-fueled rise in better functionality and diversity in these products.
  • Computing power: There will be two times more data created in the next five years, compared to since the start of digital storage. To use and leverage all that data, modern businesses demand ever-increasing amounts of memory and processing power. The race to achieve this has been fast and competitive and has driven the growing relevance and applicability of IoT.
  • Big Data technology: Since the 1980s, the world’s data, as well as the computer technology needed to store it, has grown exponentially. Advances in databases and analysis tools have allowed massive volumes of data generated from IoT devices, smart vehicles, and equipment to be processed and analysed in real time. This speed and capacity is essential for the Internet of Things.
  • AI and machine learning: These technologies provide the ability to not only manage and process vast amounts of IoT data, but to analyse and learn from it. Big Data is the favourite food of artificial intelligence and machine learning. The bigger and more diverse the data sets, the more robust and accurate the insights and intel that AI-powered advanced analytics can deliver. The rise in IoT devices has very much grown alongside the advancement of artificial intelligence and its appetite for the data they deliver.
  • Cloud computing: Just as connectivity was integral to the development of the Internet of Things, the rise of cloud computing has also been closely tied to its evolution. With the ability to deliver processing power and high-volume storage on demand, cloud IoT services paved the way for IoT devices to gather and transmit increasingly large and complex data sets.

How does IoT work?

IoT devices are our eyes and ears when we can’t physically be there – capturing whatever data they are programmed to gather. That data can then be collected and analysed to help us inform and automate subsequent actions or decisions. There are four key stages in this process:

How IoT technology works

Four key stages in the internet of things


  1. Capture the data. Through sensors, IoT devices capture data from their environments. This could be as simple as the temperature or as complex a real-time video feed.
  2. Share the data. Using available network connections, IoT devices send this data to a public or private cloud system (device-system-device) or to another device (device-device), or store it locally as directed for processing at the edge.
  3. Process the data. At this point, software is programmed to do something based on that data – such as turn on a fan or send a warning.
  4. Act on the data. Accumulated data from all devices within an IoT network is analysed. This delivers powerful insights to inform confident actions and business decisions.

Examples of IoT networks in action

IoT networks and the data they produce are at work in virtually all aspects of modern life – in our homes, our cars, our stores, and even on our bodies.    


  • Smart homes: Many people are already intimately familiar with IoT networks in their own homes. Through smart switches, sensors, and devices that communicate through protocols like Z-Wave or Zigbee, home automation systems can be used to monitor and control things like lighting, climate, security systems, appliances, and more – even from afar. If you forget to turn off the lights or your oven before leaving the house, you can do it from your phone through IoT-enabled devices.
  • Smart grids: Combined with AI and advanced analytics technology, smart grids use IoT solutions to help integrate technology to help consumers better ration and understand the energy they're using – and even producing – through solar panels and other means. IoT sensors across the grid can detect potential risks earlier so that power can be redistributed as needed to prevent or minimise outages and other issues. Sensors can also detect mechanical problems and alert technicians as needed for repairs, all of which helps energy consumers have better control and insight.
  • Smart cities: According to the Smart City Index (SCI), a smart city is “an urban setting that applies technology to enhance the benefits and diminish the shortcomings of urbanization.” Increasing populations, traffic congestion, and aging infrastructures are all among some of the challenges that the IoT is helping to address. Using sensors, meters, and other IoT devices, city planners can monitor and collect data to proactively address issues. For example, sensors placed in storm drains can detect water levels and automate actions to help prevent flooding when levels get too high.
  • Connected cars: Today, virtually all new cars roll off the line with IoT and smart functionality, with 5G cars expected to grow in ubiquity over the next five years and beyond. Advanced driver assistance systems (ADAS) that use IoT technology help drivers avoid collisions, plan routes, squeeze into tight spots, and much more. And as automotive IoT develops, we are increasingly seeing connectivity with external devices such as traffic lights, pedestrians, news and weather sources, and streaming entertainment providers.
  • IoT in retail: Customer-facing IoT solutions are increasingly being used to enhance in-store experiences. Motion-activated smart cameras, smart shelves, beacon, and RFID technologies can help shoppers locate items through a mobile app. They make it easy to share stock information, and even send in-context promotions to customers while they are browsing in store. And as the lines blur between in-store and online shopping experiences, IoT solutions can help improve customer experiences by tracking delivery and shipping vehicles, allowing customers to better customise their shopping plans.
  • Telehealth: It is increasingly common to see IoT-driven consumer medical devices like smart watches and medication dispensers that help doctors to monitor patients remotely. But some of the most fascinating advances in telehealth are coming via smart surgical tools. This is particularly relevant for patients in remote or under-developed areas. These tools allow remote doctors to connect with some of the best surgeons in the world, to perform guided surgeries, remote diagnoses, and even monitor anesthetized patients during that critical time.
  • Traffic management: Through a network of sensors, cameras, and other devices, IoT technology can be used to reduce traffic congestion and help to provide workable rerouting options. For example, real-time data feeds can be used to adjust the timing of signals to ensure a smooth flow of traffic in dynamic conditions. Light sensors can detect and adjust lighting brightness for optimal visibility while road sensors can detect accidents and automatically report issues.

What are the industrial uses of IoT data?

Of the trillions of gigabits of data we generate each year, Industrial IoT (IIoT) data is the largest (and fastest growing) producer of data. Much of it comes from the almost one billion surveillance cameras around the world. Huge amounts are also generated by connected cars and manufacturing and transportation applications. Today, IIoT data is generated, gathered, and leveraged across virtually every industry, from supply chain management to healthcare.


One of the areas in which IIoT technology is growing the fastest is within manufacturing and supply chains. In a smart factory, sensors can detect and even predict mechanical issues to keep things running smoothy. They can also collect and analyse operational data to find workflows and processes that are the fastest and most efficient – which can then be automated via a central system. In supply chains, IoT solutions help to streamline operation from end to end. Raw goods and supplies can be tracked for safety and provenance. Cargo, shipping, and last-mile logistics can be monitored in real time. And customers can have live updates about the state of their orders or the origin of their products.

The future of IoT

What we can look for in the future, is a more seamless integration between technology and human experience. While the metaverse may still be a few years away, 3D audio, advanced virtual reality, haptic sensations, and AI-powered real-time personalisation will mean that our interaction with the devices around us, will allow for increasingly “real” sensory experiences. Furthermore, with the rise of 5G and globally ubiquitous fast connectivity, humans will have a quantum-like ability to share these experiences across any distance. The implications of this are vast and have the potential to change how we approach some of our most fundamental activities and institutions such as workplaces, surgical and medical care, real estate, shopping, travel, and human relations in general.  


Explore IoT in industrial settings

Learn more about IIoT and how it can benefit your manufacturing operations.

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