What is the Internet of Things?

13.02.2023 by Dennis Nikles

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Networked machines, trackers for logistics, autonomous vehicles, Smart Home: The Internet of Things has many faces. But what is the IoT exactly, and what benefits does it bring for business and society?

What Is the IoT Exactly?

That is a question I am often asked by people who have little or nothing to do with the technology in their daily lives. I then have to start from the beginning, which is what I am going to do here too. People in their billions are already connected with each other – with new opportunities for their lives every day. The Internet of Things (IoT) does the same with things. What exactly does that mean? Its scope is far too wide for a strict definition, but it mainly involves four core components that we always encounter in the IoT context:

1.) Physical objects that are to be connected:
From pallets and parcels to automobiles or streetlights, there are many things about which it is worth knowing more, that we might even want to control ourselves or to have them controlled. What we make out of the IoT depends to no small extent on how creative we are.

2.) Connectivity:
No IoT without a connection, but many ways lead to the target. Power-saving wireless modules in the devices matter, and so does the right wireless technology.

3.) Sensorics:
The right sensor technology is the key to ensuring that the things have data to relay. The IoT can measure its surroundings in many ways, ranging from thermometers and accelerometers to flowmeters. And even relay statements about itself, such as by determining wear and tear.

4.) Platform:
The Internet of Things does not relay data as a self.purpose. The treasure trove of data is only lifted by means of an infrastructure that links the data and derives findings from it.

To summarize an attempt to arrive at a definition, the IoT consists of physical objects or technical devices that communicate autonomously over the Internet. They exchange data about their own condition or environmental parameters, thereby enabling knowledge to be gained and processes to be controlled.

There are few if any limits to the possibilities of such systems and no magic formula either. But the Internet of Things takes us forward in many areas. Users gain new opportunities to interact with technology and companies can improve products, manufacture them more efficiently and make processes more transparent. And that helps society to become more sustainable.

Which Developments Made the IoT Possible?

In terms of the speed of technology development the concept of the Internet of Things almost dates back to the dim and distant past. Back in 1982 a vending machine at Carnegie Mellon University radioed the Net: “Hi, I’m the CMU CS Department Coke Machine!” Thirsty Internet early adopters were thereby able to see the machine’s filling level. Specific developments in the direction of the Internet of Things as we now know it only came later. That required a number of technological prerequisites such as these:

  • In order to transmit data IoT applications first needed – in addition to data lines – wireless standards like GSM, WLAN or Bluetooth. More recent IoT-specific wireless technologies such as NarrowBand IoT (NB-IoT), LTE-M, LoRaWAN, Sigfox and Zigbee have opened up entirely new application areas, especially in Machine-to-Machine or M2M communication. For me the right connectivity is still the key to the IoT’s potential.
  • Wireless modules and sensors have made decisive headway too. Entry is growing steadily less expensive and energy-saving hardware is suitable for new use cases in which low power consumption is crucial.
  • Hosting dedicated IoT applications in in-house data centers is for many companies costly and high-maintenance. Scalable cloud computing has meanwhile made the IoT a mass market technology. Gigantic in-house IT systems are no longer required.
  • With increasingly open platforms and more standardization companies are finding the right IoT solution or application for them ever easier to find and to implement.
  • Big Data is all well and good, but what use are enormous amounts of data if they are not put to use? With the aid of great progress in artificial intelligence, machine learning and deep learning companies gain effective insights into their processes.
  • Neural networks are making a major contribution toward IoT acceptance in the consumer market. Without them Alexa, Siri and comparable digital assistants or Smart Home devices would be unlikely to be so welcome in our households. In a 2022 Statista survey around 77 percent of German respondents said they owned entertainment devices of this kind.

How Widespread Is the IoT?

The Internet of Things is unstoppable. Usage figures testify to its range and variety. According to industry analysts an estimated 14 billion-plus devices were communicating with each other around the world in 2022. In 2021 there were for the first time more IoT connections than connections between computers, smartphones and servers. And this boom is just gaining momentum as the number of devices and connections increases exponentially. By 2025 the number of IoT devices is expected to b e around 27 billion.

Why Is the IoT So Important?

The enormous numbers already demonstrate that the Internet of Things has developed into one of the most important technological innovations of recent years. No wonder, given that seamless communication between people, processes and things was never before possible in this way. At the same time the solutions used are increasingly less expensive and easier to use. From smart IoT devices for everyday use to highly specialized sensor technology, the more widespread digital technologies are, the less expensive it is to manufacture the hardware and develop and run the software needed. Networked things make it ever easier to collect and evaluate relevant data and respond actively to a situation without human participation of any kind still being required. Let us take industry as an example. A networked production facility recognizes when the supply of screws falls below a critical level and triggers an order for screws so that the assembly line is not brought to a halt.

The IoT’s relevance by no means ends with such specific cases; the Internet of Things gives other technologies a powerful boost. Machine learning, digital twins, edge computing – data processing on the devices themselves – and neural networks are just a few of the new technologies that not only profit from the new data treasure trove but depend upon it.

More than Smart Home: What Benefits Does the IoT Deliver?

By connecting sensors and plant and equipment companies can automate and optimize individual processes and entire process chains digitally. Industries such as manufacturing or logistics are the main beneficiaries from the analysis of IoT data. On the basis of sensor data, machines, for example, can be serviced at an early stage, cold chains can be better maintained or theft of goods can be identified early by a position tracker. Using artificial intelligence and other technologies the possibilities can be extended further. The IoT does not only contribute to connecting one thing with another; connecting humans and machines has great potential for the future. With the right interface and the combination of web portal, cloud and wireless transmission users can control devices over long distances and monitor their condition all over the world. In the future that will include, for example, steering vehicles on the other side of the world or performing operations remotely by telemedicine.

Yet for me the IoT is not a purely technological revolution; it is primarily a business revolution. That is because IoT solutions not only change technical processes; they also require a fundamental change in entrepreneurial thinking. That is best exemplified by taking a look at individual industries in which IoT solutions are used:

What Else Can the Internet of Things Do?

  • Safety at Work
    The IoT helps to increase safety at work. Sensor technology notifies employees autonomously of emergencies and can initiate rescue work itself. That applies to mines, oilfields or chemical works, but it can also save lives in offices by means of smart smoke alarms.
  • Agriculture
    The IoT takes an entire sector into the future in the shape of the Internet of Agriculture – monitoring cattle, in irrigation management or by using autonomous drones for, say, mapping or irrigation.
  • Disaster Relief
    Climate change has increasingly frequent dramatic effects, such as during the disastrous floods in the Ahrtal and other regions of Western Europe in the summer of 2021. IoT solutions may not influence nature but they can warn local people in time and thereby in the best case  prevent worse from happening.
  • New Business Models
    I referred to the Internet of Things earlier as a business revolution. Business models that did not previously exist can indeed be implemented with its assistance. Manufacturers of conveyor chains for power stations can offer customers not only the equipment itself but also services such as remote maintenance. They monitor the machines remotely and can see precisely when maintenance or repair work is required. Outages and idle times are kept to a minimum, benefiting both suppliers and customers.

This brief foray into different industries and application areas shows that the more business and other processes are based on sensor data the greater the potential benefit and the faster it is realized. But the Internet of Things is so versatile that there are few if any limits to its uses – and retrofitting or upgrading the existing facility is an effective option and can be worthwhile.

The Elephant in the Room: Is the IoT Secure?

The IoT is not just a matter of productivity, efficiency or user convenience. A technological innovation of this dimension comes with other questions that need answering. First and foremost, questions about IoT security and, with it, data protection. As a responsible driver of change our responsibility is to be among the leaders in the quest for answers. Everything that is connected on the Internet is always a potential target for hackers. DDoS (Distributed Denial of Service) attacks are but one of many IoT threats.

We at Telekom meet security requirements at our Security Operations Center, where connections in networked production are analyzed automatically for threats while maintaining full data protection. And open standards – a rapidly growing market for cybersecurity – and end-to-end approaches help to integrate solutions properly and securely. And international politics has for some time also met the increasing requirements, such as with uniform IoT security standards set by the EU Agency for Cybersecurity or the U.S. National Institute for Standards and Technology.

Quo Vadis, IoT?

We now know, 18,000 characters later, even without an exact definition: That, then, is the Internet of Things. It offers enormous scope for opportunities for companies in a wide range of sectors, for people and for society in general, based on objects with sensors and a cloud-based Internet connection that supplies us with new insights.

Where is the Internet of Things heading? Nobody know for sure, but there are IoT trends that will be central in the year ahead and probably beyond. Green IoT, for example, will grow even more important. Political sustainability requrements of companies will become more stringent and numerous. More and more customers and partners expect companies to be active on environmental protection. The Internet of Things can inter alia create the transparency needed to embark on measures of this kind and, at the same time, to save time and money on operating processes and procedures. Artificial intelligence (AI) – a trending issue at present – will take the IoT further forward. It will then be known as AIoT (Artificial Intelligence of Things). At home the smart refrigerator will recognize when the next shopping trip is due – and maybe even prompt it. In traffic the Connected Car could deliver the best driving experience: from automatic rerouting to avoid congestion to navigation to the next available parking space. AI increases exponentially what the IoT may be able to accomplish in private life and for enterprises. In connectivity the importance of satellite or non-terrestrial networks – the IoT in space, as it were – is on the increase. We at Telekom will definitely never stand still, and even without a patent recipe I am excited about where our creativity will take us in the future. OK Google? Switch off the light in the office.


Global IoT Connectivity

Global IoT Connectivity

Around the world there are application areas for the Internet of Things – and T IoT now has a tariff that makes connectivity simpler everywhere. One provider, one pricing, one international connectivity solution.

More about T IoT

Around the world there are application areas for the Internet of Things – and T IoT now has a tariff that makes connectivity simpler everywhere. One provider, one pricing, one international connectivity solution.

More about T IoT

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Dennis Nikles
Dennis Nikles

CEO Deutsche Telekom IoT

Dennis Nikles is a fan of digital technologies, leading with the Internet of Things. For him, IoT solutions are not a technical revolution; they are a business revolution. Dennis is enthusiastic about the benefits of IoT – for enterprises, employees and end customers. He has been with Deutsche Telekom since 2005, since 2017 as Head of IoT Global Sales & Commercials and since 2021 as CEO of Deutsche Telekom IoT.