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What is Internet of Things (IoT)?

Emerging Technology, explained by the engineers who build it. Definition, how it works, use cases and common questions.

IoT definition

The Internet of Things (IoT) is the network of physical devices, such as sensors, appliances, vehicles and industrial machines, that are embedded with electronics and software and connected to the internet so they can collect and exchange data. IoT systems let organizations monitor and control equipment remotely and automate decisions based on real-world conditions.

How does IoT work?

An IoT system has several layers working together. Each layer has its own design choices, and the right combination depends on how far devices are from a network, how long batteries must last and how quickly data must arrive. Most devices send small messages using lightweight protocols such as MQTT or CoAP rather than full web requests.

  • Devices: sensors and actuators built around microcontrollers such as ESP32 or Nordic nRF chips.
  • Connectivity: Wi-Fi, Bluetooth Low Energy, Zigbee, Thread, LoRaWAN, NB-IoT, LTE-M or 5G.
  • Gateways: local hubs that aggregate devices, translate protocols and buffer data.
  • Cloud platform: services such as AWS IoT Core or Azure IoT Hub for ingestion, device identity and rules.
  • Applications: dashboards, alerts, mobile apps and analytics that turn data into action.

Example: cold chain monitoring

A pharmaceutical distributor fits each refrigerated truck with temperature and door sensors connected over a cellular link. Readings arrive every minute. If the temperature drifts out of range or a door stays open too long, the driver and dispatcher get an alert immediately, before medicines are damaged. Every shipment gets a complete temperature record for compliance, and historical data shows which routes and vehicles cause the most problems.

The value comes less from the sensors themselves than from the decisions they enable: intervening early, proving compliance automatically and planning maintenance from evidence instead of guesswork. Alerts also need clear owners and escalation rules, or drivers and dispatchers quickly ignore them.

IoT examples by industry

  • Manufacturing: machine monitoring and predictive maintenance.
  • Logistics: fleet tracking, cold chain and warehouse asset tags.
  • Healthcare: remote patient monitoring and connected medical devices.
  • Agriculture: soil moisture sensors, smart irrigation and livestock tracking.
  • Energy and utilities: smart meters and grid monitoring.
  • Smart buildings: occupancy, lighting, HVAC and energy optimization.
  • Consumer: smart home devices, wearables and connected appliances.

IoT security risks

IoT devices are frequent attack targets because they are numerous, long-lived and often poorly protected. The Mirai botnet in 2016 hijacked large numbers of cameras and routers using default passwords and used them for massive denial-of-service attacks. Regulation has followed: the UK now bans universal default passwords on consumer connected products, and the EU Cyber Resilience Act sets security requirements for products with digital elements.

Secure IoT design means unique credentials per device, encrypted communication with TLS, signed firmware with secure boot, a reliable over-the-air update mechanism, minimal open ports and a plan for supporting devices with security updates over their whole lifetime. Security labels and certifications increasingly appear in procurement checklists.

How to build an IoT product

Hardware iterations are slow and expensive, so de-risk early. Prototype with development kits, test connectivity and battery life in the real environment, and design for remote updates and device management from the first version, since a fleet you cannot update is a liability. Run a pilot with a small fleet before mass production. Nexzem builds IoT solutions end to end, from firmware and connectivity to cloud backends and mobile apps, and plans security and updates into the first prototype.

IoT: common questions

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What is an example of IoT?

A smart thermostat that learns your schedule and adjusts heating, a fitness tracker that syncs to your phone, a connected meter that reports electricity use automatically, and vibration sensors on factory motors that warn of failures are all IoT examples. Each senses the physical world and shares data over a network.

What is MQTT in IoT?

MQTT is a lightweight publish-subscribe messaging protocol widely used in IoT. Devices publish small messages to topics on a broker, and applications subscribe to the topics they need. It works well on unreliable, low-bandwidth networks and constrained devices, which is why most IoT cloud platforms support it natively.

How much does an IoT solution cost?

Costs include hardware design or purchase, certification, connectivity plans, cloud platform usage, software development and ongoing device management. A pilot using off-the-shelf sensors costs far less than a custom device built for mass production. Connectivity and support over the device lifetime are often underestimated in early budgets.

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