How IoT Works – A SIMPLE Explanation!

Wondering how IoT works (IoT = “Internet of Things”) and intimidated by all the complicated terms technologists throw around in their attempt to explain it?

How does IoT work?

In short, to best understand how IoT works, think of the following metaphor: devices (like people) gather information about their surroundings. These devices communicate this information between one-another using protocols (like language) and store/save their shared data (like memory). This data is ultimately processed and then served back up in some useful way.

Sometimes the information served up is acted on automatically (like fight-or-flight response). Other times more direct user input is required (like reasoning).

How the IoT Works Infographic

1) How IoT devices/sensors work

The Internet of Things begins with devices/sensors collecting information about their surroundings.

In the same way that you and I are constantly ingesting stimuli from our environment (sound, vibration, temperature, humidity, etc.), smart devices/sensors are programmed to do the same.

how IoT works data

This is the foundation of IoT – data input/collection. And a lot of it.

While we humans collect a wide range of data, most smart devices/sensors are specialized to collect just a few.

For example: there are contact sensors that primarily collect data about whether something is open or closed.

Some of these same sensors are also capable of collecting data about the surrounding temperature and vibration intensity.

In general, the more capabilities built into each of your individual smart devices, the less of them you ultimately need to complete complex tasks.

2) How IoT device communication works

Once smart devices/sensors have collected data, they need a way to share it with other smart devices.

In everyday life we call this communication. With the Internet of Things we call it connectivity.

And while we humans use language to communicate, smart devices/sensors use protocols.

Take the following simplistic example:

There’s an English speaking person and a French speaking person living in the same home.

The English speaking person is in the living room where the temperature is 85 degrees, yelling to the French speaker about how damn hot it is.

Meanwhile the French speaker is in the kitchen where the radio is turned all the way up, yelling to the English speaker about how damn loud it is.

how IoT works language

Both are collecting data about their surroundings and attempting to communicate it to each-other, but they’re speaking different languages.

This is one of the main challenges with the IoT today – there is not a single protocol (language) that smart devices speak. And that’s why many smart products simply don’t work together.

If you can’t understand the data coming in, you can’t use it in a meaningful way.

However, a workaround does exist.

SmartHubs = Translators

In the same way we can use a translator to translate French to English, or English to French, a smart hub (sometimes called a gateway or bridge) can act as a translator for smart devices using different protocols.

Smart hubs collect the data being sent from all these smart products, centralize it and transform it into a single, readable language.

Now that the smart hub has all this data in a useable format, what does it do with it?

It sends it to the cloud.

3) How IoT cloud processing works

Ahh, the cloud.

how IoT works the cloud

Another term that secretly makes everyone uneasy.

In the most simplistic terms, the cloud allows us to access our information or services remotely, via the internet (think Google Docs).

That’s it. That’s the cloud.

If you can only access your information or a service directly on your computer then that is called local access (think Microsoft Word).

There are a lot of pros and cons of each (cloud vs local access) but in short, the cloud gives you a lot of flexibility in that, so long as you have an internet connection, you can access your data/service.

For example: I don’t need my laptop with me to access a Google Doc, I can just use my friends laptop and pick up where I left off.

If instead I was working on a Word Document saved to my computer’s desktop, I would need my actual computer to continue working on it.

The downside of the cloud is that without internet, you’re out of luck.

There are also some obvious security vulnerabilities. Since the cloud is accessed via the internet it is inherently more exposed than a local service.

But I digress.

Once all of the data is collected, properly communicated via the smart hub and sent to the cloud, services that reside in the cloud (software) begin to process it – similar to the way the our minds take in a myriad of information and process it.

4) How IoT automation works

This is where the magic happens and why the Internet of Things is such an exciting and growing field.

Now that the data has been collected, translated, sent to the cloud and processed – it’s ready to be presented and potentially acted on.

This occurs in two main ways:

  1. Automatically
  2. With direct user input required


When data is acted on automatically, an action is taken as result of the data that was surfaced, without any direct human intervention required.

This is similar to your body’s fight or flight response – your body takes in information, quickly processes it and then reacts to that input. All with little to no direct input from you

In humans, the outcome is not always a desired one. And that’s where this comparison starts to break down – with the Internet of Things there is tight control over outcome.

An example automation with the IoT:

  1. A smart air quality sensor in your bedroom measures the level of dust in the air
  2. Once the level of dust passes a predetermined level, the smart air quality sensor communicates with your smart vacuum cleaner, turning it on
  3. The vacuum cleaner begins vacuuming the room, bringing down the amount of dust in the air to an acceptable level

In this example data is being constantly monitored and dust levels managed, without any input from you.

Direct User Input Required

Action is not always taken automatically.

In many cases the information is processed and then simply presented to the user.

The user then takes action on that information as necessary. This is similar to how humans use reason to make every-day decisions based on the information we’ve processed.

An example of direct user input with the IoT:

  1. A smart temperature sensor collects temperature readings of your basement
  2. Once the temperature in the basement drops below 55 degrees, a text message is sent alerting you
  3. You then decide to turn your basement heat up

In this example the action taken by the IoT was to notify the user that a certain temperature threshold had been breached.

The user then used that information and acted accordingly by turning the heat up.

In both examples, the IoT enabled real-time information at a scale that we’ve never seen before. We’re able to monitor our homes, and our lives, remotely.

5) IoT and Industry

Up until this point I’ve focused the conversation of IoT on the individual and consumer. But, as you can imagine, the Internet of Things has huge implications for industry as well.

Interestingly enough, this is exactly where IoT began to grow its roots – right on the manufacturing floor.

Using devices and sensors, manufacturers collect and analyze mountains of data from their equipment/machinery. The goal is to improve efficiency, productivity and safety.

For example – if a machine stops working, sensors can identify exactly what and where the issue is and automatically order service or replacement parts to fix it. This shortens overall downtime and improves efficiency.

Companies using these sensors are continuously looking to improve the analysis of all of their data and now, with the help of Artificial Intelligence, they are taking the above example a step further.

Now they can predict when a machine is likely to stop working, and prevent it in the first place.

6) How IoT and Artificial Intelligence / Machine Learning work together

We can’t talk about the IoT and not mention Artificial Intelligence (AI) and Machine Learning (ML).

how IoT works AI

But first, it’s helpful to understand the difference between the two. While they are often used somewhat interchangeably, they are not quite the same thing.

AI is the concept that machines are able to carry out tasks in ways which we would deem “intelligent”.

And Machine Learning is an application of AI, which is based on the belief that we should be able to “feed” machines data and let them learn for themselves.

So what does Artificial Intelligence have to do with how IoT works?

Right now, “smart” homes and products are still somewhat limited. They require quite a bit of input and direction from us in order to work correctly and effectively.

But what if our homes could learn our behaviors and act in anticipation of them? What if they could predict what and when we might want something?

That’s the promise of artificial intelligence.

In the dust level automation example discussed earlier, the user (you) had to setup the automation first.

Then, going forward it would run “automatically”.

AIoT Automation

With the Internet of Things + Artificial Intelligence (or AIoT) working together, this automation would happen a quite differently.

A smart wearable device will detect that you are allergic to dust.

It will then communicate this to your smart air quality sensor.

This sensor will monitor dust levels based specifically on your levels of sensitivity.

Once levels of dust rise too high, your smart vacuum will begin cleaning your home, lowering the levels of dust in the air.

The automation will create itself.


That’s it. That’s how IoT works.

In my industry (the technology industry) we love our buzzwords.

“Cloud Computing (CC)”, “Machine Learning (ML)”, “Artificial Intelligence (AI)” and “the Internet of Things (IoT)”, are just some of the latest.

Unfortunately these terms are quite vague and often do very little to help the layperson understand why they actually matter.

Hopefully this explanation has helped clarify that for you and has you excited about what the future holds for the Internet of Things.