What is IoT?

Learn about IoT and why it's a key part of the digital revolution.

Nick Sandoval - Product Marketing Manager
Thiago Silva - Technical Researcher
What is IoT?

IoT is a concept coined by Kevin Ashton in the late 1990s, but which has gained more and more prominence in recent years as its use extends from entertainment, fashion and home care to healthcare services and the automation of large industries, and should reach, in this decade, a market of more than 5 trillion dollars. This article explains what IoT is, its different forms and uses and its importance for the next digital revolution that we’ll be going through, especially with the advent of 5G and the popularization of edge computing.

But what does IoT mean after all?

IoT is the acronym for “Internet of Things”. Characterized as everyday devices equipped with sensors that collect, analyze and share data via the internet in order to perform tasks and simplify everyday activities, IoT represents an ever-increasing integration between the physical and digital worlds.

Normally, this term is used for devices that are’t traditionally connected to the world wide web (such as home appliances, automobiles, factory sensors, watches, medical devices and even toys) and that communicate with each other and with the web independently of human action. Therefore, computers and smartphones are not considered IoT, although these devices often offer the interface for configuration and communication between the user and their smart devices.

Types of IoT

There are several ways to classify the different types of IoT devices currently available, but most divide these devices in terms of their different applications. Thus, one possibility would be to distribute the IoT devices among the following categories:

  • Consumer IoT, which includes devices used to perform simple day-to-day activities, such as analyzing the missing items in the refrigerator or counting a person’s steps throughout the day. Included here are smartwatches, home appliances and popular smart-speakers;
  • Commercial IoT, which can analyze and control the temperature and humidity of the air in a supermarket, or monitor the stock of a particular product. This can be done by sensors embedded in the structure of the building or in the packaging of the goods, for example;
  • Industrial IoT (also known as IIoT), which has systems and applications responsible for collecting, storing, processing, analyzing and distributing data in order to improve processes and assist in the development of a company, enabling more effective decisions that increase profits, protect workers and prevent waste. Some examples include sensors built into a logistics company’s fleet, allowing for better and safer routes to be plotted to save time and fuel, as well as smart helmets that analyze environmental factors on a construction site and inform workers and managers about possible risks;
  • Infrastructure IoT, responsible for the functioning of smart cities, collecting data on traffic, lighting and public safety through cameras that transmit and analyze high-definition images, for example;
  • Internet of Military Things, which combines all other types of IoT for decision-making at the strategic level and on the battlefield, ranging from wearable devices used by soldiers to sensors attached to tanks, ships and aircraft used during training and conflicts.
  • Internet of Medical Things, whose primary employment is in the field of healthcare. Medical IoTs can be wearable devices, such as wristbands or vests, that collect and deliver patient data in real time, in order to deepen diagnoses or understand complex health conditions, with no need for prolonged face-to-face medical assistance.

A McKinsey Digital survey published in November 2021 points out that out of these six types of IoT, Industrial Internet of Things (IIoT) devices are the investment and usage leaders in the market today, but the use of Consumer Internet of Things (CIoT) is booming, especially with regard to healthcare and home automation devices.

IoT Operation

To function properly, IoT requires four basic components: a smart device, an IoT application, a graphical interface, and a network.

Obviously, a smart device is imperative for the functioning of an IoT system. That’s what collects and delivers the data acquired through the analysis of the environment or entered by the user, according to its functions. As mentioned earlier, a device can be as simple as a smartband used to monitor exercise or an electric coffee maker, or as complex as a self-driving car like those designed by Apple and Tesla.

For the data collected by the device to be processed and used intelligently, an IoT application is required. Using Artificial Intelligence (AI) and/or machine learning resources, this application is responsible for collecting and analyzing data captured by one or more smart devices and making intelligent decisions that will mold the devices’ responses to various events and requests.

Furthermore, an IoT system may require a graphical interface through which the user can set up, update and manage one or more devices. This interface is usually provided by applications or websites used on a computer or smartphone.

Finally, considering that collecting data from the user or the environment would not be useful unless that data can be transmitted, the use of a network is fundamental to the functioning of the IoT. Networks commonly used are Wi-Fi, 4G, 5G or even bluetooth, and they enable communication between the device and the IoT application or even between two or more devices.

What about security?

As with any other device that transmits data via the internet, IoT has aroused great concern in relation to cybersecurity. IoT devices and applications generally rely on internal and external security and encryption systems, but the low internal processing power of most of these devices, as well as the attempts to reduce production costs have left gaps that are exploited by hackers and malicious users. Considering that there is no standardization regarding the communication protocols of those devices (which can use HTTP, AMQP, MQTT, among others), the challenge of keeping IoT systems safe becomes even greater.

As the number of IoTs connected to the web is monumental and continues to grow (IDC predicts that number will exceed 55 billion by 2025), one of the main risks we have found is their use in building botnets to execute DDoS attacks — but this one, of course, is not the only risk offered by devices that often have a direct action in the physical world and even in the bodies of human beings.

With easy and unrestricted access to detailed records of your routine (such as the time you wake up, by the alarm on your smart-speaker and the activation of your coffee maker; the times you leave and arrive at home, through your smart lock activated by biometrics; and even the day you shop, according to your refrigerator’s supply sensors), cybercriminals can cause much more than inconveniences restricted to the digital world, such as denying access to a particular page. What can one say about the risks posed by an intruder capable of interfering with a device responsible for monitoring vital signs and releasing controlled doses of medication?

For these and many other reasons, it is imperative that companies and consumers invest more and more efforts and resources in improving IoT security, and tools such as edge computing may be indispensable in this process.

In what ways is IoT used today?

As shown, the possibilities with the development of IoT are countless, ranging from entertainment to the development of entire smart cities. Here, we’ll get to know some promising and relevant use cases for these devices, as well as some of the countless possibilities they bring.

IoT and Retail

It may not be an absolute consensus, but it is certain that a relevant number of consumers in the hyperconnected world we live in would find it very comfortable to be able to enter a store or supermarket, choose their products, put them in the car and go home, without needing the support of a salesperson or facing long lines to pass the checkout.

Well, this is just one of the solutions brought to retail by IoT. By using the sensors on your smartwatch to register each product chosen, the most demanding consumer can forgo the assistance of a seller who does this. Once your cart is full, you can just leave the store and the devices installed at the door of the establishment, communicating with your watch, smartphone or even your glasses, will make a direct connection to your bank account or credit card to perform the payment. No lines and no inconvenience.

This process, which is perfectly possible and relatively simple to be carried out with the technological features we have today, saves time and money for merchants and customers — since prices also decrease for the final consumer by reducing store maintenance costs — in addition to increasing security for merchants and buyers, who no longer have to deal with large amounts of cash and other physical means of payment.

Besides that, IoT causes a great impact in the growing e-commerce market. Through the instant communication and unprecedented automation made possible by these devices, a fleet of AVGs (Automated Guided Vehicles) can collect and start the process of packaging, transporting and delivering products seconds after the confirmation click of a purchase made by a customer anywhere in the world. Meanwhile, the store’s stock control system updates its database and can also automatically restock products sold at the same time as it inserts the sales data into the company’s accounting system, and all that without the need for human intervention.

Finally, through data analysis only made possible by the most advanced IoT solutions, this hyperconnected system can trace individual and collective consumption patterns in order to identify trends and collaborate with decision-making regarding marketing campaigns, peak dates and times, and even the most suitable location for distribution centers, both for physical stores and e-commerces.

IoT and Financial Market

The impact of the IoT on the finance market is also big — and it continues to grow. With the big transformations in the way banks and other financial institutions act and relate to their customers, the amount and importance of data collected on a daily basis by IoT devices is immense, as these institutions can trace consumption patterns, expenses and investments of their clients in order to offer even more personalized services and credit.

As we have already discussed, through their IoT devices a customer can carry out payments and other financial transactions anytime, anywhere. However, banks and fintechs around the world are increasingly investing in the potential of IoT to generate new opportunities.

A good example of this are banks that have been using beacons to grant their customers access to their ATMs, branches and face-to-face services. Through these sensors, which connect to the customer’s smartphones and other devices via bluetooth, a branch or bank service provider can not only authorize the customer’s entry, but also carry out a verification of their identity and their needs to direct them to faster and more effective service, in addition to offering specific marketing campaigns according to their location. Furthermore, considering their fast evolution and the possibilities of association with high resolution cameras, beacons can also monitor risk situations and inform the competent authorities in real time, becoming an invaluable security resource for clients and institutions.

Regarding fintechs, the potential for IoT use cases is still inestimable. In addition to all the security mechanisms mentioned in this article that are critical for any company dealing with their customers’ financial lives, fintechs around the world have invested in IoT innovations that promise to transform the way we handle money, on both an individual and a collective level. Whether to determine value for crops in real time (through devices that control moisture, quality and expiration date of agricultural products stored in silos), or to calculate insurance for self-driving vehicles, or even to manage cryptocurrencies directly from your smart wallet , the IoT promises to be present in our economy from everyday purchases to the highest and most complex investments.

IoT and Industry

Industrial application of IoT is among the most widespread and profitable at the moment, and is likely to remain so in the future. For some years now, the use of internet-connected sensors has been simplifying the monitoring and control of entire fleets with less and less human intervention. However, the benefits of IoTs can be found at all levels of an industry, from environmental comfort, through the production line and security to fully automated deliveries.

By collecting and processing large amounts of data in real time, IoT enables factories to optimize their production, discover bottlenecks and forecast yields in advance, in addition to allowing them to also anticipate demand and adapt processes via just-in-time manufacturing strategy, which is based on activating each sector of industrial production according to demand.

In the UK, for instance, the first smart factory started operating in 2019, aiming to test the possible improvements brought about by the use of a private 5G network together with countless IoT sensors. In this factory, the intention is to monitor and improve all processes, from remote control of machines to storage methods, through the analysis of massive amounts of data in real time.

One benefit of this type of factory is the ability to predict well in advance possible failures or malfunctions of machinery and equipment, allowing for preventive maintenance that reduces or even eliminates downtime. Thus, costs are reduced (since there is no need for a large number of professionals to carry out periodic inspections of the equipment), incidents are mitigated (because the machines are monitored 24/7 to find errors and defects) and profits increase considerably.

IoT and Healthcare

Another branch of activities that already sees the benefits of using IoT is healthcare. Internet-connected devices can provide doctors with detailed records of their patients, such as heart rate, glucose levels or even spikes in blood pressure. Furthermore, with the development of technology, these devices may be ready to intervene with release of medications or notifications to doctors and families, if necessary.

The COVID-19 pandemic also produced a scenario in which it was necessary to combat a virus about which little was known. In situations like this, where discoveries and updates on forms of contagion and hygiene protocols are daily, sensors constantly updated and located in critical areas of hospitals can help in the installation of new safety protocols and in the disposal of those that are found to be inefficient (such as the level and frequency of air renewal required, or blocking circulation in potentially contaminated areas, as well as constant cleaning of surfaces using ultraviolet lights or other methods).

Furthermore, IoT devices can help in other sectors of the hospital environment, such as controlling the stock of pharmaceutical products and supplies, or can be installed in the personal protective equipment of health professionals in order to collect important information about the hospital routines — such as a doctor’s vital signs during a surgical procedure.

Azion’s Edge Platform and the Future of IoT

Regardless of the industry considered, one thing is certain: IoT is a fundamental part of the digital revolution that we’re living and is here to stay. Therefore, it is important to be prepared to offer the best services and the latest technology that this type of device requires, whether in the day-to-day household routine or in the daily activities of large industries.

To get the best performance in IoT solutions and increase their resiliency, reaching the full potential that this technology brings, Azion’s Edge Platform offers products that simplify how developers create, protect, deliver and observe these applications. Our platform also dramatically reduces day-to-day operations and costs associated with launching and maintaining these solutions.

Edge computing dramatically accelerates data transmission and processing. As IoTs can generate and transmit data at local network speed, it is essential, in order to extract maximum benefits, that the analysis of this data and the generation of insights and responses happen in real time, on the device itself. And because our edge computing network has extremely low latency, this allows all of these processes to be performed much faster than a traditional cloud-based network.

Besides that, another important advantage of edge computing is its reliability. Considering that one minute of downtime can cost a factory US$10,000 to US$70,000 of lost productivity, having a highly reliable system with built-in multi-level redundancy like an edge network is fundamental to avoid this kind of loss when you’re planning to get fully equipped with IoT sensors and devices.

Concerning security, our platform also allows mechanisms to be added to mitigate risks of intrusion and compromise of IoT devices, including end-to-end encryption and a robust system of authentication and control of new devices added to the network and controlled by our orchestration system.Concerning security, our platform also allows mechanisms to be added to mitigate risks of intrusion and compromise of IoT devices, including end-to-end encryption and a robust system of authentication and control of new devices added to the network and controlled by our orchestration system. Furthermore, as our platform performs complete real-time traffic analytics, we are able to stop 0-day attacks before they even happen, in addition to the fact that our highly redundant backbone enables fast and effective DDoS mitigation.

And these are just some of the benefits our platform can offer. Would you like to get to know more about this subject? On our blog you can find other posts that can help you better understand how IoT works and its application possibilities. You can read a more in-depth look at the importance of edge computing in overcoming major IoT challenges, learn more about the convergence between 5G networks, IoT and the future of healthcare, or even become familiar with MQTT, a communication protocol which has been gaining more and more space among IoT systems.

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