What is the Internet of Things (IoT)?

The Internet of things (IoT) is quickly becoming an integral part of almost every business place. In the era of big data, the ability to collect data points in every sphere of your business and analyze it to gain a competitive advantage over the competition is becoming crucial. 

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internet of things

Illustration: Milica Mijajlovic

What is the meaning of the Internet of Things? 

IoT is one of those concepts that could have arrived straight from the best science fiction novels. It entails a network of interconnected devices and mechanical and digital machines that have the ability to capture and send data via the internet. It is a major trend that is the driving engine in the evolution of the manufacturing industry, also known as Industry 4.0. Business processes are enhanced by the addition of sensors, devices, and platforms. 

Gathering all of this data in one place allows businesses to run analyses and what-if scenarios in order to make more informed decisions and design more efficient processes. One of the simpler exemplars of IoT is installing wireless water meters by the water utility company in New York in more than 817,000 buildings. This move allowed the firm to replace the manual task of walking up to water meters in buildings to read numbers and generate customer invoices.   

History of IoT 

Without going too far back into the past, with the first radio voice transmission taking place in the 1900 and paving the way for modern communication, we can turn to the 1980s. During this time, the initial version of the internet ARPANET was released to the public, paving the way for the modern internet that we know today.  

History of IoT

Photo Illustration: Pelion

Meanwhile, the IoT concept was initially introduced in 1999 by Kevin Ashton, the executive director of Auto-ID Labs at MIT University. While preparing a presentation for Procter & Gamble, Ashton gave the first outlines of IoT

“If we had computers that knew everything there was to know about things, using data they gathered without any help from us, we would be able to track and count everything and greatly reduce waste, loss, and cost. We would know when things needed replacing, repairing, or recalling and whether they were fresh, or past their best.”   

The technology behind IoT 

Today, IoT has evolved much further than Kevin Ashton initially envisioned, where IoT exploits standard protocols and networking technologies. More specifically, the major technologies that enable the existence of IoT as a concept include, but are not limited to, RFID, NFC, low-energy Bluetooth, low-energy WiFi, low-energy radio protocols, LTE-A, and WiFi-Direct. The technologies are necessary to support the specific networking functionality required for IoT and its varied application.  

IoT technologies

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  • NFC and RFID – radio-frequency identification (NFC) and near-field communication (RFID) provide simple, low-energy, versatile communication options, where RFID employs 2-way radio transmitters-receivers to identify and track items, while NFC includes communication protocols mostly for mobile devices 
  • Low-Energy Bluetooth – a wireless personal area network technology that is better suited for IoT-specific usages, unlike the original Bluetooth technology 
  • Low-Energy Wireless – the backbone of any IoT system as communication (wireless) has to stay in listening mode while other elements can be powered down to accumulate data and transmit when needed 
  • Radio protocols – while there are numerous, ZigBee, Z-Wave, and Thread are the main ones used for the creation of low-rate private area networks offering high throughput   
  • LTE-A – also known as LTE Advanced, improves upon the conventional LTE tech by increasing coverage, reducing latency, increasing throughput, and decreasing energy expenditure 
  • WiFi-Direct – lower latency P2P (peer-to-peer) connection protocol that eliminates the need for access points without reducing the speed or throughput  

When is IoT used? 

IoT’s main purpose is to bridge the gap between the physical and virtual worlds by creating smart environments and devices. Businesses use IoT devices to optimize and speed up their supply chains, manage their inventories, and improve customer experience. Consumers use IoT to make their lives easier, to track their habits or health, and to earn more by doing more with the help of technology. Lastly, cities employ IoT to measure and streamline everything from utility meters to traffic flow.  

In Industry, IoT devices collect performance data automatically, offering the ability to create predictive maintenance to avoid machine down times. While this is only one example of IoT usage in industry, the technology allows automation of existing processes, as well as the necessary data to create new business models, strategies, and processes to enhance their competitiveness. 

In transportation, IoT can track the fleet’s location, utilization of the vehicles, calculation of the best route, and finally track the location of all items being ferried.  

For consumers, the fact that smart homes are making their lives easier is all thanks to the application of IoT devices. An additional benefit of IoT is its utilization in the medical sector to benefit consumers. Now, with the advent of smart wearable devices, doctors can get real-time data from their patients, track the effect of prescribed medicines and, in some cases, like the automated insulin pumps, adjust the dosage on the fly.  

There are numerous other examples of the utilization of IoT, and as technology expands quickly, more will come our way with the goal of making our lives easier.  

Examples of IoT devices 

The “utopia” IoT is creating for consumers, businesses, and cities alike is achieved through many IoT devices. These are hardware devices, like sensors, gadgets, appliances, and other machines, that collect and exchange data. While different devices offer differing capabilities, the similarities lie in the fact that the devices are physical objects sensing the physical world. They often have an integrated CPU, network adapters, and firmware and are assigned an IP for over-the-network communication.  

Among the currently few most popular IoT devices are: 

  • Home Voice controller – a smart home staple as the device offers voice-enabled services like alarms, lights, thermostats, volume control, water systems, and much more as the “brain” behind the smart home (Google and Amazon offer the most popular variants) 
  • Smartwatches – this category is the third largest group among the connected devices, offering calorie tracking, exercise tracking, music, GPS and much more  
  • Gaming consoles – while some may not recognize gaming consoles as an IoT devices, they are certainly part of the network, tracking gaming and streaming habits, saving user data and credit card information, aiming to improve user experience and immenseness of the gaming system  
  • Smart thermostats – another staple of smart home, enabling remote control of the temperature in a home through connection with the heating and colling systems of a home  

Dino Kurbegović is a project coordinator and an investor and technology enthusiast with years of experience in managing complex projects. His journey into content writing began in 2014, covering finance, investing, crypto, technology and complex technical topics.