What is IOT (Internet of things) and how does IOT work?

By Akilesh M | 1st January, 2021 | 4 min Read

Internet of things which is commonly called IOT technology refers to a network of interconnected systems which exchange information wirelessly over the internet without human intervention. IoT technology has changed the traditional way of living into a high tech style. The terms that you usually hear about smart cities, smart homes, smart transportation, smart industries are the transformations due to IoT technology. IoT has become an important part of our life and can be sensed everywhere. Now let’s see how IoT technology works.


Credits: om.co

Stats about IOT

  1. There Will be 41 Billion IoT Devices by 2027
  2.  By 2023, 70% of Automobiles Will Be Connected to the Internet
  3.  Over 80 Percent of Industrial Manufacturing Companies Are Using or Planning to Use IoT Devices
  4. Nine out of Ten Senior Executives in Technology, Media, and Telecom Companies Say IoT Growth is Critical to Their Business
  5. Nearly 90 Percent of Retailers Are Using or Planning to Use IoT to Customize Store Visits.
  6. By 2025, there will be more than 75.4B Internet of Things devices worldwide.

How does IOT work?

Before we dive into the working of iot let us try to understand the meaning of the word “thing” in internet of thing.A “thing” in the context of internet of things is any entity or physical object, outfitted with sensors that has the ability to gather and transfer data over a network.

For suppose you are travelling to a nearby town and suddenly a message pops up on your mobile phone informing low fuel and also at the same time shows you the direction for the nearest petrol bunk. Are you wondering how this works? Well it's nothing but the Internet of things (IOT). Now let's talk in detail about how IOT works.

components of iot eco system

Your car is equipped with sensors that detect the fuel level of your car. Once the fuel level drops below a certain level, the fuel detector sensor sends a message to your phone saying that the fuel level is low. But now the question comes how does the fuel sensor communicate with the application on your mobile. There are different components that form the IOT ecosystem

  1. Sensors

    Sensors are used to collect data and information from the environment. The kind of data that is being collected depends upon the application. In our case it would be the fuel level on the car.

  2. Communication and data transfer 

    Once the data is collected the data needs to be communicated to a device or a computer. To transfer the data there has to be a medium. That's when mediums like Bluetooh, WIFI, local network, Cellular network etc comes into play.

     In our examples once the sensors detects the fuel is below a certain level then a message is sent to your mobile devices as both the systems are on the same network(connected to internet or a local network)

    iot architecture
  3. Data Processing

    This is the most important component of an IOT network. Once the data has been recorded by the sensors all the data is stored on the cloud.This is the most crucial task as the applications can be as simple as turning off/on the AC at right temperatures or identifying an intruder using CC cameras. The applications are designed in such a way that all the processes occur at a faster rate.

  4. User Interface 

  5. The last step in the IOT ecosystem is displaying the messages or any related information to the users using the dedicated IOT mobile app. This way the user will get to know what’s running on the system such as indication of low fuel in his car. 

Now as you have seen how IOT works ,now let us look at the applications of IOT.

Applications of IoT

  1. Manufacturing:

    Industrial internet of things(IIoT) is a digital transformation in the manufacturing sector. Industrial IoT has a network of sensors fitted in various machines to collect the critical data of the machines. This data is used to monitor the machine's health and take required steps before the machine stops working. This is called predictive maintenance. 

    iot for manufacturing

    Harley-Davidson, for example, leveraged IoT to reconfigure its York, PA manufacturing facility and managed to reduce the time it takes to produce a motorbike from 21 days to 6 hours.

  2. Automotive:

    The application of the internet of things in the automobile industry is endless.IoT has bought a huge development in the files of fleet management. Data such as weight and volume of the cargo, truck performance statistics like fuel and mileage and also the real time tracking of the truck. 

    iot automobile

    Through smart phones enabled dashboards, car users can be assured of surveillance and safety. External sensors and cameras also send the data to your smart phones

  3. Retail:

    IoT applications allow companies and organizations to plan their inventory, improve the supply chain management ,improve customer experience and reduce operational costs.

    To get a better understanding of how IoT is used in retail to improve efficiency and customer journey, watch this video.

    Use of GPS and RFID tags helps to visualize the complete movement of goods from warehouse to the shelf and then to the customer, implementing store shelf sensors, digital price tags also enables the organizations to plan the procurement process at the entry level of the supply chain efficiently.  

Apart from the mentioned applications there are many more industries that are benefitting from IoT, such as in health care where all the assets of the hospital can be tracked and also the patient’s progress can also be tracked. In the same way IoT has transformed the education system by giving access to teachers to track the students progress and also improve the learning experience for students.

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