Internet of Things is the concept of a data network between physical objects equipped with built-in means and technologies for interacting with each other or with the external environment. It is assumed that the organization of such networks is able to restructure economic and social processes, exclude the need for human participation in some actions and operations.


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The Internet of Things is the concept of a data network between devices. Inside the IoT, people can communicate with "things" and "things" can communicate with each other.

How does the Internet of Things work?

The Internet of Things (IoT) connects devices into a computer network and allows them to collect, analyze, process and transmit data to other objects through software, applications or technical devices

IoT devices function independently, although people can configure them or provide access to data. IoT systems operate in real time and usually consist of a network of smart devices and a cloud platform to which they are connected via WiFi, Bluetooth or other forms of communication.

What happens when the temperature gets too high or a burglar shows up in the house? The system alerts the user or takes further action itself - like turning on the air conditioner or calling the police.

The devices first collect data - such as the temperature in the apartment or the user's heart rate - and then send that data to the cloud. There, the software processes it, and the Internet of Things is inextricably linked to Big Data.

What does the Internet of Things consist of?

  • In addition to Big Data, analytics, connections, devices and experiences are also important to the Internet of Things. For simplicity, this principle is represented as ABCDE: Analytics, BigData, Connection, Devices, Experience.
  • Analytics is the key link in the functioning of the IoT, which connects the devices themselves, the data from them, and optimizes business processes;
  • BigData (big data) - that is, information from devices - is stored in the cloud. They allow you to automate existing processes or build new ones;
  • Connection - these are the channels through which devices receive and transmit information;
  • Devices - Devices connected to the system that, depending on the task, must have the appropriate message frequency in order to work properly;
  • Experience - work with the existing experience of solving customer problems using the IoT, its analytics and rethinking.

Where is the Internet of Things being used?

IoT allows companies to automate processes and reduce labor costs. This reduces waste, improves service delivery, and makes manufacturing and logistics cheaper.

"You can encounter IoT in almost all areas: from contextual advertising, which tells the user where to eat lunch or fill up depending on the current geolocation, to food delivery or buying a car," Maxim Lipatov, technical director of IoT predictive system PRANA, told RBC Trends.

According to IoT Analytics research, in 2020 the highest level of IoT technology penetration was in transportation, energy, retail, city life management, healthcare and industry.

In electricity, the Internet of Things improves the controllability of substations and transmission lines through remote monitoring.

In healthcare, IoT is taking disease diagnostics to a new level - smart devices monitor patient health indicators in the background.
In agriculture, "smart" farms and greenhouses dispense fertilizers and water themselves, and "smart" animal trackers notify farmers in time not only about the location of animals, but also about their health status by analyzing heartbeat, body temperature and overall activity.

In transportation, typical IoT solutions include telematics and smart fleet management, in which the vehicle connects to a local operating system for monitoring and diagnostics. Statista [2] estimates that $740 billion will be invested in IoT development for cars by 2025.

In urban environments, IoT solutions help automate lighting while reducing lighting costs by up to 30-50%. "Smart meters," which record and transmit consumption and wear and tear information to management companies themselves, eliminate the need for city residents to reconcile and send energy consumption data themselves.

In logistics, IoT reduces trucking costs and minimizes the impact of human error. IoT systems can also monitor trash garbage can occupancy and optimize trash collection costs based on that data.

The IoT is being actively adopted by the oil, gas and mining industries. In particular, the use of in-depth analytics on drilling wells helps the oil and gas industry increase production volumes at already depleted fields. And, for example, Severstal, with the help of the Internet of Things, was able to minimize the company's losses due to erroneous forecasts of electricity consumption.

In retail, IoT allows brands and retailers to optimize costs and improve the customer experience through digital signage, customer interaction tracking, inventory management and smart vending machines. The market is expected to grow from $14.5 billion in 2020 to $35.5 billion by 2025, according to ResearchAndMarkets.

How is the IoT useful to humans?

Many people associate the Internet of Things with the smart home. Thanks to technology and devices developed by Google, Amazon, Apple and others, users can make online purchases, adjust the temperature in a room, turn on lights and music by giving voice commands to virtual assistants.

You no longer have to worry about forgetting to turn off the iron or the faucet - just press a button on your smartphone, and the smart home will fix everything. And you don't have to press any button, because the house is so smart that it will put everything in order, and the owner will be notified as a result. The surveillance system, using computer vision, will recognize everyone who passes by your apartment and compare the images with the police database.

Today, a smart home is basically an intelligent assistant that turns on music, searches for information on the Internet, advises movies, adjusts the lighting and temperature in the house, and turns on the kettle.

The American company Qualcomm also offers a system that will make any home "smarter." It allows you to remotely monitor the situation in the house, reports the appearance of noise, it can be used to give instructions to the robot vacuum cleaner and other connected devices, as well as to open doors using the facial recognition system.

Does the Internet of Things have disadvantages?

The main problem associated with the development of the IoT is security. Cybercriminals are constantly trying to hack into remote patient monitoring devices, databases with health information, intelligent car control systems, commit phishing attacks, upload viruses to hacked devices, and even commit entire sabotage of production facilities. So IoT market participants need to learn how to protect their systems.

Another difficulty of the Internet of Things is the possible incompatibility of software from different devices of different manufacturers, combined into a single system. Such a situation can occur when developers release a software update for their device and do not check its compatibility with older versions of software from other connected devices. To troubleshoot the problem, you will have to contact other development companies and ask them to make changes to their software for the entire IoT system to work properly.

Connecting more and more devices to the Internet will inevitably lead to job losses. For example, IoT systems will replace some of the specialists in maintenance, repair and installation of equipment. In addition, the legal aspects of the introduction of the Internet of Things today are rather vague.

Problems of IoT implementation

We can divide the problems in the implementation of the Internet of Things into technological and human resources:

  • technological problems are related to the fact that existing maintenance, repair supply and resource planning systems in enterprises do not provide for the introduction of new data collection tools;
  • staffing issues are related to personnel, where technicians are not able to readjust from manual data collection.

"The notion that introducing hype technologies like Big Data or Data Science will be the panacea for all ills is misguided. Organizations need to start by rethinking business processes and identifying digitalization tools, and that requires expertise. Perhaps IoT-based predictive analytics is the right solution. It can prevent excessive resource consumption and deviations in the technical condition of equipment, as well as extend its lifecycle. All of this reduces the risk of sudden production stoppages due to malfunctions, and therefore excludes direct financial losses."

Prediction is the latest stage in the evolution of the Industrial Internet of Things. It implies not just collecting data from pieces of equipment, but rather a local system with a distributed network in which information from various sources arrives in one storage, where it is processed and sent to the personnel who maintain the devices.

The Future of the Internet of Things

IDC predicts there will be 55.7 billion connected devices worldwide by 2025. Cybercriminals will continue to attack them because the IoT system is a fast enough way to spread malware. Average users, businesses and entire cities will increasingly use smart technology to save time and money. For example, refrigerators will be able to warn of impending food spoilage, traffic lights with built-in video sensors will regulate traffic depending on traffic.

What will smart homes be like in ten years?

Right now, however, the key problem with implementing IoT is the lack of unified standards. Therefore, existing solutions are difficult to integrate with each other, and new ones appear slower than they could.

Another nuance is that the "things" in the Internet of Things must be autonomous, that is, they must be able to get energy from the environment, without human involvement.