What Is the Internet of Things (IoT)?

The Internet of Things (IoT) refers to the multitude of networks consisting of physical devices (“things” like vehicles, wearables, and appliances equipped with sensors and software) and the technology platforms and protocols that enable these “things” to collect, store, and analyze data for automating tasks and processes.

How Does IoT Work?

An IoT system works through real-time data collection and communication between the IoT device(s) or application(s) with the cloud, or intercommunication between IoT devices and applications themselves.

At its core, there are three components to an IoT system:

  • Smart devices – The “things” that collect and relay the data
  • IoT application – The services, software, and platforms that receive and store the data
  • User interface – The management and presentation of the data (e.g., a website)

IoT Platforms

Commercial and open source IoT platforms provide a range of features and services for building and managing IoT applications, making it easier for businesses and developers to create an IoT system.

These platforms are most often cloud-based, providing tools and services that – at a minimum – build, manage, store, and analyze IoT application data. Platform options for IoT systems include Amazon Web Services (AWS), Microsoft Azure, Google Cloud, and IBM Watson.

Categories and Types of IoT

IoT categories are based on which devices and applications are commonly used within a given industry. Common IoT categories include:

  • Consumer IoT: Used in daily consumer life, such as smart home hubs, customizable refrigerators, and wearable health and fitness trackers.
  • Industrial IoT: Used to automate and optimize manufacturing and other industrial processes. For example, devices and applications that detect equipment failures, expedite repairs, mitigate damage, track inventory levels, and monitor production lines.
  • Commercial IoT: Used to improve customer experience and optimize business operations in retail, hospitality, and healthcare industries. For example, scanning to track purchases, automating orders at a restaurant, or enabling telehealth appointments.
  • Healthcare IoT: Strictly used in healthcare settings to monitor patients, improve care, and collect real-time medical device data.
  • Agricultural IoT: Used in agricultural settings. For example, sensors to monitor livestock movements and health, devices that track and report on soil health, and applications that alert connected systems to changing weather conditions and temperatures.
  • Smart Cities IoT: Used in urban environments for smart lighting, traffic monitoring, and waste management.
  • Autonomous IoT: Used to autonomously operate machines that previously required human intervention, such as autonomous vehicles and drones.
Why Is IoT important?

IoT has simplified many everyday instances that used to be relatively cumbersome. Consider the last time you ordered a birthday, anniversary, or other gift and weren’t able to track to see whether the package would arrive ahead of the event. The processing of that order and its tracking and delivery are now all orchestrated with various IoT devices and applications.

Many other examples are outlined in the categories above – from medical to agricultural use cases – and each illustrates how much of the modern world relies on IoT devices.

Benefits of IoT

Through their real-time communication, IoT systems can make improvements to:


IoT systems can automate and optimize various processes, reducing the need for human intervention and improving efficiency in industries such as manufacturing, transportation, and agriculture.

Cost Savings

IoT systems can help reduce costs by improving energy efficiency, reducing waste, and optimizing resource usage.

Real-Time Monitoring

IoT systems can provide real-time monitoring of equipment and environmental factors, allowing for timely responses to issues and preventing downtime.

Improved Safety and Security

IoT systems can improve safety and security by monitoring and detecting potential hazards or security threats in real-time.

Enhanced Customer Experience

IoT systems can provide customers with a more personalized and seamless experience, from smart home appliances to wearable devices.

Data Collection and Analysis

IoT systems generate large amounts of data, which can be collected, analyzed, and used to inform decision-making, identify trends, and optimize processes.

Disadvantages of IoT

While IoT systems can help improve many industries, they also come with a unique set of challenges and risks:

Production Cost

IoT systems can be costly to purchase and incur added expenses once deployed. For smaller or mid-sized companies, it may not be cost effective to invest in IoT.

Recommendation: Carefully evaluate the costs and benefits of IoT adoption before investment, including costs for developing, maintaining, and securing IoT devices.


IoT systems can be vulnerable to security breaches, which can lead to the theft of sensitive data or the disruption of critical systems.

Recommendation: Secure IoT devices and applications with strong encryption protocols and authentication mechanisms while monitoring for suspicious activity.

Data Privacy

IoT devices and applications collect vast amounts of data, which can include sensitive information about individuals and organizations.

Recommendation: Identify the minimum amount of data you need to collect to provide IoT services. Be transparent about data collection practices and take steps to protect the privacy of individuals and organizations whose data is being collected.


IoT devices and applications are often built using different technologies and protocols, which can make it difficult to integrate them with other systems and devices. IoT systems are part of an evolving industry, and without a universally accepted set of standards and protocols, devices and systems can quickly become siloed or fragmented. This can lead to compatibility issues and difficulties in managing and maintaining IoT systems.

Recommendation: Implement standard protocols and data formats whenever possible. The industry needs to establish standards to improve interoperability.


IoT systems contain many devices and data sources, which could make scaling quickly difficult.

Recommendation: It’s important for teams in charge of IoT systems to have a clear understanding of the architecture and infrastructure required to support IoT systems, as well as the skills and resources needed to manage and maintain them.

How Do IoT Devices Communicate?

Connectivity needs to be a key consideration in the discussion of what which protocol or technology to use for IoT devices and use cases. IoT devices typically use a cloud-based IoT platform that provides a range of services, including device management, data storage and analytics.

To communicate with devices, the IoT platform typically uses APIs and protocols such as HTTP and Message Queuing Telemetry Transport (MQTT)  and Constrained Application Protocol (CoAP). Some other communication methods include:

  • Wi-Fi – Commonly used in situations where all devices are located within range of a Wi-Fi access point (e.g., a smart home or a patient wearable that monitors health statistics at a hospital). Wi-Fi usually offers a decent coverage range, making it good for high-speed data transfer and low latency.
  • Bluetooth – An everyday communication method, Bluetooth works well for information that needs to be shared over short distances between IoT devices (e.g., listening to music on a smartphone with wireless headphones).
  • Zigbee – Commonly used in industrial settings, this low-power wireless communication protocol uses the minimal consumption needed. Therefore, Zigbee is ideal for devices that need to operate for long periods of time without being recharged. Zigbee can also support many devices at once in a single network.
  • LoRaWAN – A Low Power, Wide Area (LPWA), long-range wireless communication protocol that is commonly used in agriculture, smart cities, and other instances where long-range communication is critical. LoRaWAN is the cloud layer based on the proprietary radio communication technique LoRa.
  • Cellular – A viable option for long-distance use cases due to its wide coverage range with cloud-based systems. That said, cellular can be costly because of taxes and regular maintenance.
What Is Involved in IoT Software Development?

IoT software development can involve a variety of tasks, such as developing firmware and drivers for IoT devices, designing and implementing communication protocols between devices and back-end systems, building cloud-based platforms to manage and analyze data from IoT devices, and developing mobile or web applications to interact with IoT platforms.

Developers tasked with IoT software or device development must consider security and privacy issues. IoT devices are often connected to sensitive systems and networks – often at the mercy of multiple layers of authentication, restricted access, and other strong security measures designed to protect against cyberattacks and data breaches.

Desired skills for IoT developers vary by industry and company. For example, a developer for an autonomous vehicle company would need to have experience using cloud systems because of the information sharing that comes from vehicle sensors.

Other desired skills for IoT development jobs include:

  • Machine learning and artificial intelligence
  • Programming languages (including, but not limited to, JavaScript, Python and C)
  • Node.js development
  • Cloud computing
  • Information security
  • UI and UX design
  • Big data analytics
What to Consider Before Adopting IoT Technology

Software developers interested in adopting IoT need to first establish a use case. Ask yourself: How can IoT technology be applied to this specific business problem or opportunity? This could be anything from optimizing existing external processes to streamlining internal workflows. With a use case identified, begin to develop a strategy for implementing IoT technology to address the problem.

Next, research IoT platforms. Keeping your identified use case in mind, evaluate platform options based on the specific features and capabilities your solution will require. Then, test the finalists. As with any software development project, it’s important to test and iterate your IoT applications to ensure they are functioning as intended. This may involve conducting user testing, performing load testing on IoT devices and networks, and monitoring the performance of your applications in real-world settings.

Finally, do a security check. IoT devices and networks can be vulnerable to security breaches, so it’s important to take steps to secure your IoT applications and data. This may involve implementing strong encryption protocols, using secure authentication mech

Exploring NGINX in Your IoT Journey

NGINX can be used to route traffic between IoT devices and cloud-based systems, helping manage traffic and ensure data is transmitted efficiently and securely. NGINX is easy to integrate with other tools and protocols, making it a powerful tool to securely manage your IoT traffic.

NGINX can be used in a variety of ways in your IoT deployment. Use these free resources to see how NGINX can be used to: