What is the Internet of Things? Internet of Things definitions and segments

Everyone speaks about the Internet of Things (IoT). So it’s important to know what we’re really talking about in order to understand eachother, starting with a description of the Internet of Things, some Internet of Things definitions and a look at the main segments.

There is no universal Internet of Things definition and it is not that easy to define IoT because it has become an umbrella term for many realities which, in the end, have little in common, depending on how you look at it. As you will see in the definitions below there are several approaches and views.

What is the Internet of Things - IoT definitions: bridging digital, physical and human

Defining the Internet of Things: an evolving activity and reality

It’s important to know that the definition of the Internet of Things is in evolution in several ways:

  • Industry bodies are updating definitions and descriptions in a field that is still lacking standardization. Some have published definitions and descriptions, counting several dozens of pages in efforts to find a universally agreed IoT definition.
  • The market is changing definitions too. Whether it concerns analysts or companies, which are very active in the IoT space: many of them have changed their definitions and views (and some are changing them as we speak).
  • There is a shift in the way we think about the Internet of Things. You can define things based upon what they are and what they are not. You can also define them without a real definition but rather by focusing on their characteristics. And, as far as we’re concerned the most important question to answer in a definition: why do we use something we describe, where does it come from, where is it going and what can it do for us?
  • The many use cases and context within which the Internet of Things resides are becoming far more important. While the Internet of Things – and we weigh our words – as a ‘reality’ has benefits and consequences many can’t grasp yet, we need to change the narrative and look at IoT from the holistic perspective of 1) how it is connected with people, processes, data, business, innovation, meaning, etc. and of 2) the outcomes and goals from an integrated view, with regards to ecosystems of value, of related technologies and of business and platform ecosystems.
The Internet of Things redefined - from connecting devices to creating value
The Internet of Things redefined – from connecting devices to creating value

What the Internet of Things is not

Before sharing a list of Internet of Things definitions and elements we must emphasize (and remind) a few things.

Not every connected device is part of the Internet of Things

We have been connecting devices and ‘things’ to the Internet and other networks since quite some time. This doesn’t mean by definition that all these ‘connected’ devices nor their inherent capacities are part of what we know as the Internet of Things.

Connected devices and the networks we use to achieve specific goals with them are at least two decades old, albeit for specific and more ‘simple’ purposes.

Think about how we have been using RFID tags in logistics, manufacturing and warehousing for years to track items (and NFC or near field communications). It’s not a coincidence that in these same markets (with manufacturing being the leading one), Internet of Things investments are the highest. This ‘segment’ of manufacturing, logistics, transportation and so forth is often called the Industrial Internet of Things or IIoT as we’ll see.

Other systems of connected devices that have existed since long before the Internet of Things as we know it today include machine-to-machine (M2M) networks, ATMs, point of sales systems and so forth.

In other words: not all connected devices are IoT-connected devices but all IoT-connected devices are connected devices. Moreover in the Internet of Things we use the Internet Protocol (IP), more specifically IPv6.

Strictly speaking when we talk about the Internet we mean a bunch of connected items, network technologies, sensing and gateway devices, endpoints, data analysis systems/approaches, protocols and standards of which that Internet Protocol (IP) is the main one.

So, in general we only speak about the Internet of Things when ‘things’ (endpoints) are uniquely addressable, using an IP address or Uniform Resource Identifier. It might sound a bit confusing and it’s one of the reasons why the Internet of Things is probably not the best name invented ever.

The Internet of Things is not a thing

Although we speak about the Internet of Things as if it were a thing it is many things but also an ecosystem of inevitably related processes and other technologies from the perspective of a goal within a specific use case.

It is not just about the connected devices but also about the hardware and software and connectivity solutions to create IoT solutions as mentioned. And it’s also about many processes and technologies (big data analytics, cloud, edge computing, IoT platform software and IoT connectivity approaches, etc.) which are needed to do something with IoT deployments. Last but not least the Internet of Things really is a huge umbrella term.

As a consequence, people often speak about the Internet of Things without really knowing what exactly it is all about. It is clear that when we speak about the Internet of Things in the context of for instance fitness trackers this has little in common with the Internet of Things as it’s used in industrial settings such as manufacturing or connected logistics, to give a few Industrial Internet examples. That’s why people started segmenting various Internet of Things segments or started looking more at the various use cases.

The Internet of Things is not the best term ever

As mentioned the Internet of Things, as a term, is used for so many types of applications, industries and use cases that all too often people don’t mean the same thing when talking about IoT and, more importantly, when forming opinions regarding, well, “it”.

The Internet of Things enables a smarter bridging of digital, physical and human spheres by adding data capture and communication capacities to objects in a secure way to a networked environment.

This is another reason why the Internet of Things is not the best term ever. In fact, just as big data really is a misnomer, one can consider the Internet of Things a wrong name too. For some the Internet of Things is related with consumer electronics and consumer applications, ranging from connected fitness wearables and smart glasses to IoT-connected entertainment systems and smart thermostats. Others look at the Internet of Things from a business and society perspective: the IoT as it’s used in applications such as smart parking or track and trace solutions. And then there is the Internet of Things in a more industrial context.

This shows why a definition of the Internet of Things really depends on whom you ask and how, in the end, many people mean many different things. This is also why use case matters and why it’s essential to look at real-life Internet of Things examples in order to understand how they fit in a business and human context.

You can’t really compare a connected smart lamp in your house with an Internet of Things solution for livestock monitoring or an IoT-powered smart manufacturing plant.

Ideally we would define the Internet of Things – and also look at it – from the perspective of use cases, actual IoT deployments, the applications that are possible (use cases) and the many ways that the combination of connected devices or connectivity and big data (analytics) – which in fact exist since quite some time – can be leveraged.

What is the Internet of Things according to others? 7 characteristics

The Internet of Things can be defined by the various characteristics in the broader context.

There are 7 crucial IoT characteristics:
  1. Connectivity. This doesn’t need much further explanation. Devices, sensors, they need to be connected: to an item, to eachother, actuators, a process and to ‘the Internet’ or another network.
  2. Things. Anything that can be tagged or connected as such as it’s designed to be connected. From sensors and household appliances to tagged livestock. Devices can contain sensors or sensing materials can be attached to devices and items.
  3. Data. Data is the glue of the Internet of Things, the first step towards action and intelligence.
  4. Communication. Devices get connected so they can communicate data and this data can be analyzed.
  5. Intelligence. The aspect of intelligence as in the sensing capabilities in IoT devices and the intelligence gathered from data analytics (also artificial intelligence).
  6. Action. The consequence of intelligence. This can be manual action, action based upon debates regarding phenomena (for instance in climate change decisions) and automation, often the most important piece.
  7. Ecosystem. The place of the Internet of Things from a perspective of other technologies, communities, goals and the picture in which IoT fits. The Internet of Everything dimension.

As the Internet of Things is an umbrella term and as such has no meaning since data and devices are inherently dumb and derive their meaning from the purpose, context and integration with processes, people and information systems for which they are designed, some prefer to use other terms.

This is why some organizations and individuals, for instance, rather talk about the Internet of Everything (as we do), while others opt to drop the term IoT alltogether and mention it in terms of specific use cases and contexts such as smart cities, smart metering, smart buildings, smart wearables, Industrial Internet or connected homes, all of course with their own meaning and, again, with more subdivisions.

Defining the Internet of Things: many situations, applications and terms to describe them

In order to distinguish between the many potential use cases and situations where the Internet of Things is and can be used, other terms have been added and they do overlap a bit in some cases (no term is perfect). We’ve mentioned them briefly before, let’s go a step further.

Internet of Things many flavors overlapping

Consumer Internet of Things (CIoT)

The Consumer Internet of Things is what almost everybody knows. It’s what the media is talking about most.

The Consumer Internet of Things or CIoT is where you will find applications and use cases to track your personal ‘assets’ (asset tracking), from your pet to your skateboard. Or where you will find the connected ‘smart appliances’ such as connected refrigerators, washing machines, light bulbs, etc. Also wearables and all sorts of consumer electronics such as smart wristwear belong to this category, along with all sorts of smart home appliances like thermostats or connected parking door openers.

The applications get better and smarter. They also get more independent from other devices such as smartphones. This is certainly the case with smart wearables.

Typically, data volumes and data communication needs are low and limited. That’s why there are many technologies of which some are specifically designed for consumer applications, ranging from smart home connectivity standards to special operating systems for wearables.

Connected IoT consumer device buying interest as per December 2016

The Industrial Internet of Things

The Industrial Internet of Things describes typical industry use cases across a range of sectors. Some people see the Industrial Internet of Things more in a context of ‘heavy’ industries like manufacturing or utilities. But it is also used for use cases in, for example smart cities and smart metering.

If we look at it as a sort of ‘Business Internet of Things’ it is clear that there are some overlaps with the Consumer Internet of Things. For instance: if you have a smart thermostat and smart energy consumption meter in your house they are on one hand consumer applications because they are for personal usage. But from the perspective of the company that uses it to send you invoices and to help optimize energy consumption it is a business matter and that company is an industrial one. So, the terms are not that good but that’s how it is and it’s better to look at use cases than at these broad categories because just as there are many different applications in the Consumer Internet of Things, there are also many in IIoT and some are hard to compare.

The Industrial Internet of Things in data
The Industrial Internet of Things in data

If you look at a simple smart city application, for instance for smart waste management or smart parking, you don’t need many data and data rates. Moreover, in many applications data doesn’t need to be sent constantly. On the other side of the IIoT spectrum can be very heavy industrial applications, like in oil and gas, where there is much more needed. And, in-between you have all sorts of cross-industry use cases such as smart buildings and connected vehicles.

For the various scenarios and types of IIoT applications, different connectivity and data solutions have been developed, from cellular IoT and low-powered wide-area to industrial.

What is the Internet of Things: the answers

So, what is the Internet of Things then? Do we have enough elements?

Defining the Internet of Things as a foundation and enabler

The Internet of Things is an umbrella term which describes a multi-faceted foundation for a range of applications and goals which are enabled through the connection of items (devices, sensors, tagged beings), equipped with data capture and communication capacities, uniquely identifiable and connected, in order to transmit and/or received data for a clear human, business or societal purpose.

The Internet of Things enables a smarter bridging of digital, physical and human spheres by adding these capacities in a secure way to a networked environment.

The Internet of Things is an additional layer of information, interaction, transaction and action which is added to the Internet thanks to devices, equiped with data sensing, analysis and communication capabilities, using Internet protocols.

Using Internet technologies such as IP, the connection of the capacities of IoT-enabled devices and applications fit in a broader ecosystem of IoT-specific protocols, standards and architectures, data analysis, information management, communication and network technologies; specific technologies depending on the use case, automation, processes and people, with an insights-driven societal, industrial, business and/or human purpose in mind.

The key components of an Internet of Things deployment from a high-end perspective are:

  • the endpoint environment (sensing and data capture, in some cases analysis at the edge),
  • connectivity within the endpoint environment where data from sensors and actuators are transmitted and received in hubs,
  • connection with the cloud and applications, in some cases middleware, called IoT platforms, and
  • the actual outcomes in the form of the end customer application and/or process integration/automation.

Defining the Internet of Things – information, interaction, transaction and action

In our view the most simple and straightforward definition of the Internet of Things starts from looking at the essence of the Internet which is a global network, characterized by information, interaction and transaction. Communication is part of interaction, with information as its enabler.

Originally, it presented information and linked information, obviously with a human purpose. Soon interaction and transaction, human and automated, were added, with the end goal remaining human but with an additional touch of processes. The glue of these many forms of interaction, transaction, communication, processes and so forth remained information which is added, created, shared, consumed and used to fulfil a task. With the Internet of Things another layer is added but in the end it again is about information and how it is used for human goals and automation, with a focus on moving from data to actionable intelligence and in the end transaction, interaction etc.

Our definition of the Internet of Things then becomes: “The Internet of Things is an additional layer of information, interaction, transaction and action which is added to the Internet thanks to devices, equiped with data sensing, analysis and communication capabilities, using Internet protocols.”.

The Internet of Things, anything and everything

If you step away from the technological perspective of the Internet of Things (which in this stage obviously gets a lot of attention, as do the various IoT connectivity technologies, devices and security aspects in a still hyped and, despite what many think, early stage) AND if you step away from dividing the Internet of Things from an industrial, business and consumer perspective (which as mentioned leads to new umbrella terms), you can look at the actual benefits, role and meaning of the Internet of Things.

In that sense there are two terms that are far closer to the holistic perspective we always seek and just described in our definition.

Industrial Internet: a holistic IoT definition

A first term, which we mentioned earlier, is the Industrial Internet. It’s often used interchangeably with the Industrial Internet of Things and today it’s also where an association of organizations, called the Industrial Internet Consortium, focuses on. However, in the definitions and key elements of the Industrial Internet we see the more holistic picture of 1) connected devices (in the illustration below, machines), 2) data and meaning (advanced analytics), and 3) people and innovation/operations/outcomes (people at work). You can compare the Industrial Internet with what its known in Europe as Industry 4.0.

Key Elements of the Industrial Internet - based upon Industrial Internet of Things paper - see below

The Internet of Everything: focus on the essence of IoT

A second term, which we touched upon as well is the Internet of Everything.

Coined by Cisco, used by others such as Intel, but also looking at the more holistic perspective that is required. Why is it required? Because, if we look at the Internet of Things in the strictest possible sense of an IP-based decentralized network of uniquely identifiable things that are able to communicate (data), we only look at the essential technology dimension and if we look at it from the use case perspective (divided between consumer, industrial and anything in-between), we only look at the solutions.

When we talk about the Internet of Things on this site we most often mean the Internet of Everything, which Cisco defines as follows: “The Internet of Everything (IoE) brings together people, process, data, and things to make networked connections more relevant and valuable than ever before-turning information into actions that create new capabilities, richer experiences, and unprecedented economic opportunity for businesses, individuals, and countries.”

Internet of Everything in context - based upon Cisco

Internet of Things definitions in context

While definitions matter a lot, it’s important to remember that usually business people don’t talk about the Internet of Things to their bosses in the scope of their work and project plans. If they do, it’s best to stop it unless the CEO and CFO are IT experts.

Business execs often don’t even speak about the use cases in terms of more…terms, such as smart cities or smart grids. In the end, they know that they need to digitally transform, that the Internet of Things is a truly disruptive game-changer but their job is to solve challenges , innovate and optimize in function of activities and goals. Simply put: few LOB executives will try to sell an IoT project to the CEO and there aren’t that many that will try to convince the board or the CFO regarding the benefits of a smart metering project. But, to take the latter example, they will certainly succeed if they come up with a way to reduce costs, gain valuable insights, develop new revenue streams and increase customer satisfaction, for instance, certainly if they did the math.

More Internet of Things definitions

Looking for more definitions of the Internet of Things? Below is the promised list with over 20 more IoT definitions (some are at the same time obviously great resources to continue your IoT journey). Feel free to add a definition you prefer more!


Top image: Shutterstock – Copyright: nitsawan katerattanakul – All other images are the property of their respective mentioned owners.

J-P De Clerck
J-P is the founder of i-SCOOP. Born and based in Belgium, he likes to share information, thoughts, inspiration and anything regarding the convergence of marketing, management, customer-centricity, publishing, digital technologies, psychology, transformation, optimization, media and IT - in the hope it serves you. The mentioned areas are those he has been active in since 1992 as a marketer, a consultant, a publisher and a trainer. Connect on Twitter via @conversionation or on LinkedIn.