What Is The Internet Of Things (IoT)? (2025)

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The Internet of Things (IoT) has become one of the most transformative technologies of the past decade, giving birth to both the smart home and the smart office. In fact, in 2024, the global IoT market is expected to reach a staggering $1,387.00 billion in revenue. But what is IoT, and why is it drawing so much interest?

Internet of Things (IoT) Defined

The Internet of Things, or IoT, is the name given to a network of devices that can connect to the internet and exchange data, both with other IoT-enabled devices and centralized cloud servers.

Types of IoT devices available on the market include all devices and digital appliances that can connect to the internet and exchange data, such as virtual home assistants, smartwatches, wearables, drones, lights, baby monitors and home appliances.

Some of the most well-known consumer examples of IoT devices include Amazon Alexa, Google Home, the Apple Watch and Ring. According to Statista, there are 17.08 billion connected IoT devices as of 2024.

How Do IoT Devices Work?

Many IoT devices use physical sensors to collect data on their local environment, and can be interacted with remotely by users. For example, IoT-enabled light systems can measure the brightness and intensity of local lighting, and increase or decrease this value based on user input.

IoT devices will forward locally collected data to an IoT gateway, a central hub that will forward this data to a cloud server where it can be processed via a SaaS app. For instance, a logistics provider might use a data analytics app to measure how many orders were fulfilled on time.

Why IoT Is Important

The IoT is important because it unlocks new capabilities in both consumer and enterprise environments.

In home environments, consumers can use IoT-enabled smart devices to change their home lighting, adjust the temperature, interact with kitchen appliances, turn on the radio, see who’s at the front door, open the garage and check their heart health via a smartwatch remotely.

In business environments, there are three main reasons for their importance. These are as follows:

1. Collecting New Data

First and foremost, IoT devices provide organizations with the ability to collect and process data from devices at the edge of a network. This data can be used to generate new insights into a company’s operations, which can be used to enhance its decision making by highlighting ways that these processes could be optimized or improved.

For example, IoT devices can be used to monitor stock in real time, giving a business an opportunity to see when goods need to be restocked. Likewise, an organization can monitor physical equipment to see when it requires maintenance.

2. Automating Tasks

Using IoT-enabled devices also provides new opportunities to automate manual tasks, or at the very least, to interact with infrastructure remotely. Automating tedious manual processes enables human workers to complete their responsibilities faster.

If an organization is using IoT devices to track the stock of physical goods, then human employees don’t need to check stock manually, because they can check a centralized cloud solution to view this information.

3. Cutting Costs

Finally, these benefits in efficiency can help to reduce costs for the business as a whole. Collecting and processing data in real time gives organizations the feedback and insights they need to continuously improve their efficiency. This means that a company has ample opportunity to become more cost-effective over time.

Pros and Cons of IoT

There are some significant pros and cons to consider when adopting IoT technology, which include:

Pros

  • Collecting data from multiple devices to process and develop insights
  • Unlocking/enabling new processes remotely
  • Continuously optimizing operational efficiency
  • Improved decision making
  • Remotely monitoring and managing assets and resources
  • Better predicting and forecasting trends and maintenance
  • Creating new revenue streams via product-as-a-service models
  • Improving employee safety (e.g., monitoring conditions in manufacturing environments)

Cons

  • IoT devices require a stable connection to the internet
  • Devices from different manufacturers might not integrate
  • Maintaining and managing IoT devices can be challenging
  • IoT devices need to be protected against threat actors
  • Employees will need to be trained on how to use them

Technologies That Make IoT Possible

There are a number of technologies that hold up IoT devices. At a high level, this includes:

  • Sensors: IoT devices use sensors and actuators to detect changes in the local environment. Sensors can detect changes in heat, humidity, light or pressure, whereas actuators can detect physical changes in the environment.
  • Communication technologies: A range of communication technologies including Wi-Fi and Bluetooth are used to enable IoT devices to communicate with each other so they can share data with other devices and the cloud.
  • Cloud computing: The cloud is the central point of an IoT network where the data generated by IoT devices can be processed and analyzed by the end user.
  • Big data analytics: Big data analytics is a key technology used to help users process and make sense of the data collected by IoT devices. This helps them to identify patterns and extract insights more easily.
  • Artificial intelligence: Many devices including Alexa and Google Home use AI technologies such as natural language processing (NLP) to respond to user inputs and natural language queries on IoT devices locally.

Examples of IoT Applications

There are a wide range of IoT applications across different industries. These include:

Health care

One of the most promising areas where IoT devices are used is within healthcare. With IoT devices, doctors and medical providers can monitor patient conditions remotely.

For instance, a doctor can give a patient a wearable that measures their heart rate or blood pressure to help identify health conditions and improve treatment options. They can also help to alert doctors when a patient’s condition has deteriorated and prompt emergency care.

IoT devices can also be used in hospitals to assist with inventory management, helping to monitor the location and availability of medication and equipment that’s used to help treat patients.

Manufacturing

Another key use case for IoT devices is in the manufacturing industry, where they can be used to monitor the performance of machines, track the location of assets in real time, identify equipment failure, conduct predictive maintenance, monitor inventory and provide insights on how to improve overall efficiency.

For example, if IoT is used to monitor equipment status, sensors on the local device can measure local conditions and assess whether the machine is operating at peak performance. If it’s not working as intended, the device can issue an alert so that the manufacturer can conduct maintenance, remove it from operation or replace it.

Retail

Finally, in retail environments, IoT devices such as RFID sensors and smart tags can be used to track and manage store inventory in real time. This enables vendors to optimize their stock more effectively and make sure that they always have the inventory available necessary to meet customer demand.

Retailers can also use IoT devices to gather information on customer activity, to unlock insights into what type of products they’ve purchased in the past, and what they’re most likely to purchase in the future.

Bottom Line

IoT devices have the power to transform how consumers and enterprises interact with their local environment. Simply by connecting everyday devices to the internet, users have access to a range of insights, data and interactions that they wouldn’t have had access to in a more traditional IT environment.

Having real-time visibility and control over devices helps to improve consumers’ lives while making organizations function more efficiently. Ultimately, this visibility opens the door to significant opportunities for growth and continuous improvement.

Frequently Asked Questions (FAQs)

What is an example of the Internet of Things (IoT)?

An example of the IoT in action can be seen in a smart home environment. For example, a user uses apps on a personal device such as a smartphone or smartwatch to interact with devices connected to the internet, such as lights, thermostats, home appliances and more, from a single location.

These devices are all connected to the internet and can be accessed and controlled centrally without needing to go and manually interact with each device.

What is the main idea behind the Internet of Things?

The main idea behind the Internet of Things is to connect disparate physical devices to the internet, so they can share data with each other and a centralized cloud server.

Connecting these devices to the internet means that users can interact with these devices remotely and process the data they’ve generated locally, to unlock new insights into their environment.

What is the Internet of Things in simple terms?

The Internet of Things is the name given to the network of physical devices that can connect to the internet and share data with each other.

What Is The Internet Of Things (IoT)? (2025)

FAQs

What Is The Internet Of Things (IoT)? ›

The Internet of Things (IoT) describes the network of physical objects—“things”—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.

What is meant by Internet of Things IoT? ›

The term IoT, or Internet of Things, refers to the collective network of connected devices and the technology that facilitates communication between devices and the cloud, as well as between the devices themselves.

What is the correct definition to the internet of Things IoT? ›

The internet of things, or IoT, is a network of interrelated devices that connect and exchange data with other IoT devices and the cloud. IoT devices are typically embedded with technology such as sensors and software and can include mechanical and digital machines and consumer objects.

What is an example of the internet of Things IoT? ›

Wearable technologies.

One of the most common Internet of Things examples is smartwatches. Wearable IoT technology like Fitbits and Apple Watches connect to other devices (like your smartphone) to share data. They typically also connect to the internet to track GPS locations.

What is the internet of things IoT Quizlet? ›

What is IoT? a network of Physical objects embedded with electronics, software, Sensors, Actuators and Network connectivity. These objects Collect and Exchange data.

What is the IoT and why is it important? ›

The Internet of Things (IoT) describes the network of physical objects—“things”—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.

What is the definition of IoT? ›

usually the internet of things. [singular] (abbreviation IoT) ​the connection of devices within everyday objects via the internet, enabling them to share data.

What is IoT in real life? ›

The simplest, most straightforward definition is: The IoT is a network of Internet-linked devices, vehicles, and appliances that can collect and share data without need of human interaction. That's it.

What is the primary goal of IoT? ›

The main purpose of IoT is to connect any device and object to the internet, allowing them to collect and share information, and to be remotely monitored and controlled.

How is IoT used today? ›

Examples of how we use Internet of Things in our everyday lives include: Smart appliances (stoves, refrigerators, washers and dryers, coffee machines, slow cookers) Smart security systems, smart locks, and smart doorbells. Smart home hubs (that control lighting, home heating and cooling, etc.)

Why is it called Internet of Things? ›

Ashton who was working in supply chain optimization, wanted to attract senior management's attention to a new exciting technology called RFID. Because the internet was the hottest new trend in 1999 and because it somehow made sense, he called his presentation “Internet of Things”.

What is an example of Web of Things in IoT? ›

What are some examples of Web of Things applications in the real world? Smart cities, retail and supply chain management, healthcare monitoring, industrial IoT (IIoT), smart home automation, and agricultural IoT (AgriTech) are a few examples of real-world uses for WoT.

What information does IoT collect? ›

IoT sensors can be deployed to track a range of data streams within buildings: temperature, air quality, people flow, moisture, or movement. These datasets are primarily used to be proactive for occupant comfort issues and avoid disaster scenarios such as leaks and floods.

What are the four types of IoT? ›

What are the 4 types of IoT networks? IoT networks can be categorized into four main types: LAN/PAN, LPWAN, and Mesh protocols. The classification is based on factors like network coverage and available bandwidth. It's worth noting that the majority of IoT networks operate wirelessly.

Is Alexa an IoT device? ›

IoT refers to the wide range of physical devices that now have network connectivity and sensors to collect and exchange data. IoT encompasses everything from smart home speakers to enterprise sensors to medical devices. Alexa/Echo products are configured for ease of installation rather than security.

What is difference between IoT and Internet? ›

IoT is a network of interconnected physical devices/objects which collects and exchange data over wireless networks. Internet of Things has two main parts i.e 'Internet' which is the backbone of connectivity and 'Things' meaning to object/physical devices.

What does an IoT device do? ›

IoT devices are pieces of hardware, such as sensors, actuators, gadgets, appliances, or machines, that are programmed for certain applications and can transmit data over the internet or other networks.

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