IoT Explained — How Does an IoT System Actually Work?

The Internet of Things (IoT) is a system of interrelated computing devices, mechanical and digital machines, objects, animals or people that are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction.

Still Don’t Know How an IoT System Actually Works?

A complete IoT system integrates four distinct components: sensors/devices, connectivity, data processing, and a user interface. Below I will briefly explain each component and what it does.


Sensors or devices collect data from their environment. This could be as simple as a temperature reading or as complex as a full video feed.


The sensors/devices can be connected to the cloud through a variety of methods including: cellular, satellite, WiFi, Bluetooth or directly through Internet.

Data Processing

Once the data gets to the cloud, software performs some kind of processing on This could be very simple, such as checking that the temperature reading is within an acceptable range.

User Interface

Next, the information is made useful to the end-user in some way. This could be via an alert to the user (email, text, notification, etc).