IoT basics: A guide for beginners

What does IoT stand for and what does it mean?

Consultancy McKinsey & Company offered this basic description of IoT: "Sensors and actuators embedded in physical objects are linked through wired and wireless networks, often using the same Internet Protocol (IP) that connects the internet."

Kevin Ashton, who coined the term internet of things, preferred the term internet for things. While not widely used, this term provides a helpful way to understand the concept behind IoT. Think of the "normal" internet you access from your PC or smartphone as the internet for people and IoT as an internet of interrelated computing devices, mechanical and digital machines, objects, etc.

The internet of things is everywhere. It is used in a range of industries and has both corporate and consumer uses. Today, for example, automobiles often have dozens of sensors that collect and transfer data for safety, maintenance, entertainment, fleet management and other purposes. These internet-connected cars are considered part of the internet of things because they communicate with other devices over the internet based on input from the environment, not just from direct human manipulation.

How does IoT work?

IoT works through a combination of wireless networking technology, physical devices, advanced data analytics and cloud computing. The basic process of how IoT works is as follows:

• A group of physical devices is wired or wirelessly linked to each other and/or a central area.
• The devices collect data from the external world using some kind of sensor.
• That data is then stored somewhere, whether it be in the cloud, an intermediary network location or on the device itself.
• The data is then processed, often by machine learning and artificial intelligence.
• The processed data is used by the physical device to perform some action.

For example, this process applied to a smart thermostat would go like this:

• The thermostat has a sensor that reads the temperature in the room.
• The thermostat stores and processes that data.
• If the temperature exceeds a certain value, the thermostat automatically regulates the temperature to some predefined value.
• The thermostat transmits periodic temperature readings to the energy provider's external database over a wireless network.
• A data analytics application derives insights from the data over time to improve energy efficiency by adjusting the thermostat's temperature settings.

Learn how smart hospital rooms work and some of their key IoT elements.

Basic IoT concepts and terms

There are four pillars of IoT:

• Data. IoT technologies provide myriad ways to collect data about the physical world. Data is the fuel of IoT.
• Device. The actual, physical components or things in the internet of things that collect this data.
• Analytics. The process of making collected data useful by turning raw data into actionable insights.
• Connectivity. This makes sharing data and insights possible, increasing the value of that data. This is the internet in internet of things.

Closely related terms anyone getting acquainted with the concept of IoT should be aware of include the following:

• Edge computing.
• Big data analytics.
• Artificial intelligence.
• Machine learning.
• Supply chain management.
• Digital twin.
• Machine-to-machine.
• Operational technology.
• Ambient intelligence.
• Radio frequency identification.
• Near-field communication.

Specific types of IoT and its applications include:

• Industrial internet of things. IIoT refers to the use of IoT in industrial applications.
• Internet of medical things. IoMT refers to the use of IoT in medicine.
• Internet of battlefield things. IoBT, also known as the internet of military things and internet of military defense things (IoMDT), refers to IoT in military contexts.

Benefits of IoT technology

The internet of things' most immediate business benefit is helping enterprise organizations learn more about -- and thereby improve -- their own internal processes and structure to ultimately provide better products and/or more effective services. IoT increases the number and types of places enterprises can autonomously retrieve data from, providing much more information to work with. It also enables internal systems to become more responsive.

The main benefit of IoT for consumers is convenience and ease of use, which is not trivial in the case of a healthcare device, for instance. As IoT continues to grow and infiltrate the public sphere, more tangible and social benefits might be realized, such as the following:

• Smarter environmental choices as a result of more accurate insights into our effect on the environment, pollution etc.
• Smart cities that revolutionize the way urban environments function.
• Changes in culture and politics as a result of these things.

The massive amount of data that IoT networks and smart cities could create has the potential to give people new insights into areas previously limited by the amount of real-time data available. Whether in business or for consumers, some benefits of IoT technology include the following:

• Operational efficiency.
• Predictive maintenance.
• Customer experience.
• Data-driven decision-making.
• New business models.

Learn more about the growing optimism surrounding IoT and AI integration.

Challenges of IoT technology

Despite its potential, IoT faces several challenges.

IoT security

Oftentimes, IoT devices are meant to automate processes. Humans might neglect to properly configure, maintain or secure these devices because they are designed for automation -- to leave the human out. For example, an administrator of an IoT device such as a smart camera is more likely to neglect to change the default password set by the manufacturer. The result is an external-facing IoT device with a simple default password to crack.

Data privacy

There are also concerns about data privacy and governance as IoT becomes more prevalent. With more networked devices sharing data autonomously, being accountable for all that data becomes more complicated. For example, smart lightbulbs might require login credentials and a connection to a local network. Smart cars often collect a diverse array of data, including location, driving behavior and biometric data. Connected medical devices collect a trove of sensitive patient data. How this data is collected, stored, communicated and used is an issue organizations must be aware of.

Safety

IoT devices -- especially those used in industrial, medical, transportation and infrastructural applications -- are often tasked with jobs that, if performed incorrectly, could put lives at risk. If a smart car's warning system malfunctions, it could cause the driver to neglect an obstacle or a pedestrian. A malfunctioning sensor at an industrial plant can be catastrophic if a key warning sign is missed.

Interoperability

Many IoT devices have unique protocols, data formats or proprietary services that they run on, making standardization across devices and providers difficult. This can make data sharing and compatibility between different devices from different vendors a challenge.

Environmental impact

Heavy metals used in many IoT devices make them difficult to manufacture, dispose of and recycle without substantial environmental and human costs. Some IoT vendors might also intentionally brick -- or render useless -- their products by disabling proprietary services that their devices need to run.

On the flipside, learn how IoT monitoring and detection can play a significant role in achieving environmental, social and governance goals.

IoT examples in business and across industries

IoT technology can be applied across a diverse array of industries.

Medical

IoT devices can perform medical data collection, monitoring and analysis. Sometimes referred to as smart healthcare, IoMT aims to create a digitized healthcare system that connects medical resources and healthcare services.

Some example IoT applications in this field include the following:

• Heart rate monitors and pacemakers that monitor a patient's vital functions and can send alerts through an emergency notification system.
• Advanced hearing aids that adjust their level of sensitivity to suit the user.
• Fitbits or smartwatches that measure biometrics.
• Smart beds that sense when a patient is moving to alert a healthcare professional or automatically adjust settings to improve comfort.
• End-to-end health monitoring applications that help patients -- with chronic illnesses, in particular -- monitor their vitals and medication requirements.

Discover more about IoT and healthcare with this in-depth guide.

Military

The military uses smart technology and IoT to prepare for warfare and to conduct surveillance and reconnaissance. Examples include smart drones and the DARPA (Defense Advanced Research Projects Agency) Ocean of Things project, which aims to establish a network of passive sensors at sea to record the presence and activity of military and commercial vessels.

Manufacturing

IoT in the industrial and manufacturing sector aids in various sensing, identification and communication processes in the factory and elsewhere. For example, digital control systems can automate these processes and help optimize plant safety, security and efficiency.

Explore ways IoT is transforming manufacturing.

Retail

Retailers and distributors use smart packaging with a QR code or NFC tag that contains a unique identifier and digital information about products to enable digital interactions. Similar technology has been used during the COVID-19 pandemic to enable contactless interaction with publicly used objects, such as restaurant menus or smart water fountains.

Infrastructure

IoT devices can be used in public infrastructure. Some examples include the following:

• Transportation. Smart traffic control systems, smart parking systems, electronic toll collection systems and vehicle road assistance aim to make transportation more efficient.
• Home and building automation. Smart energy management systems monitor and control various components of a building's infrastructure.
• Infrastructure monitoring. IoT devices can monitor infrastructure such as bridges or railway tracks to detect significant structural changes, improving emergency management and incident response processes.
• Urban development. Smart cities outfitted with IoT sensors provide citizens with services such as environmental monitoring data and parking applications for smartphones by way of smart meters.
• Agriculture. IoT is used in farming to monitor and collect agricultural data, such as rainfall level, temperature, wind speed, pest infestation and soil content. Farmers can use the insights from IoT devices in their fields to improve the quality of their product and minimize waste.

Learn how AI and IoT are reshaping agriculture.

Possible IoT uses for consumers

Smart homes and wearable devices are two common examples of IoT in the consumer market.

Smart homes often include smart devices and appliances, such as thermostats, lighting fixtures, cameras, security systems and toothbrushes. They are linked via a home network and might link out to other external networks. A smart electronic toothbrush can transmit data about a user's brushing habits to their dentist to help provide more appropriate care, for example.

Users might control some of these devices and systems through smart speakers such as Amazon Echo and Google Nest or a smartphone app. For instance, a user can use their smartphone to change the color of a smart lightbulb. Through voice assistants, smart home devices can also assist those with mobility and sight limitations to control smart appliances that would otherwise be difficult to access and manage.

Wearable IoT devices such as Apple Watches and Fitbits use sensors to collect biometric data about a user for insights to improve physical health.

Ben Lutkevich is site editor for Informa TechTarget Software Quality. Previously, he wrote definitions and features for Whatis.com.