Continuing with our look at the fundamental building blocks of IoT, let’s examine the various elements involved in a complete IoT system. We talked previously about how IoT works and its benefits, and now we will provide a peek behind the curtain so you can better understand its wizardry.

An IoT system consists of four key components: sensors and devices, a network for connectivity, a data processing system, and a user interface.

Sensors and similar devices are designed to gather data from their environment. That data could range from a temperature reading or location, movement, or operational status, to something as sophisticated as a full video feed. The data-gathering endpoint could be a standalone sensor, or it could be a device that consists of multiple sensors.

Moving the data from the sensor to the cloud requires network connectivity. That connectivity could be provided via the cellular network, Wi-Fi, Bluetooth, long range (LoRa) low-power wide area networks, or satellite, with the communications link typically provided through some form of gateway or router. The choice of connectivity comes down to an assessment of the best option for each specific application, based on cost, transmission range, bandwidth, and security considerations.

When the data is received, analysis and processing can begin. The analysis can be something as simple as merely checking to make sure the temperature is within the proper range, such as in a restaurant or food service operation, or whether the sensor and the asset it is monitoring are in motion or in a fixed location. It could also be more complex, such as analysis of a video feed from a brick-and-mortar retail location, showing the movements of large numbers of customers.

The user interface can take many forms. It could be a web portal, where users can check all of the current, historical, and trends data for many sensors and devices. Or it could be as basic as an alert, whether via email or text, if there is something that the user needs to know – such as that the refrigeration temperature is out of range or the asset is in motion.

The interface is also where users are able to perform various actions and control the entire system. Using the refrigeration example, the user could remotely adjust the temperature via a smartphone app. Or the user could also instruct the system to automatically make adjustments within certain criteria, with alerts sent only if there is something that specifically needs human attention.

Why the cloud is important

The ability to use the cloud for aggregating data and for the analysis to derive actionable information is an important part of IoT. Typically, the cloud better accommodates vast amounts of data from many sources across a wide geographic area.

The cloud is also incredibly scalable, so it can handle data that is generated by thousands or tens of thousands of sensors and devices. It would be impractical and prohibitively costly to equip the sensors and devices with the computational power to accomplish any significant data processing at the source of the data.

But IoT does not require the cloud. Depending on the specific application, some data processing and analysis could be done locally, or regionally, with direct network connectivity from the sensors and devices to the enterprise. But the advantages of the cloud include its scalability, its capacity for aggregating vast amounts of data, its economies of scale, and the fact that the computational power and analysis can be purchased on a pay-as-you-go basis rather than requiring large amounts of capital investment.

Making businesses efficient

All of the data being collected and analyzed makes businesses of all sizes smarter and more efficient. Sensors can ensure that business equipment is running at top efficiency by constant performance monitoring, preventing surprise failures that can disrupt operations. It can help guard against threats to business assets, from risks such as temperature fluctuation, power loss, water intrusion, or unauthorized access via doors or windows.

Companies can cut their energy usage and costs as sensor monitor lighting, room temperatures, and other environmental factors and adjust them depending on varying needs throughout the day. Manufacturers can better detect production bottlenecks by collecting and analyzing sensor data. And with sensors on products in inventory, whether in the stock room or in large warehouses, their exact location will always be known.