What is the Internet of Things (IoT)?


The Internet of Things (IoT) refers to physical objects —vehicles, home appliances, wearables and more— that are connected to the internet, so that they can transmit data online.

From the industrial gas bottle that lets the depot know when it needs replacing, to the heart implant that enables a doctor to monitor her patient remotely, to the fridge that announces when it needs restocking, business and consumer IoT applications continue to proliferate.

IoT applications and examples

Around 8.3 billion devices are already connected to the IoT, from the Fitbits on our wrists and the wifi in our cars to home-monitoring systems like Nest and heating/lighting systems like Centrica’s Connected Home. According to an estimate by Gartner, there are likely to be 20.4 billion connected ‘things’ by 2020.

Areas which are already making positive use of IoT applications include:

Consumer applications
Wearable tech, smart home technology, connected vehicles, health and fitness apps, smart appliances.
Smart control of manufacturing processes and systems, plant optimisation, health & safety management.
Remote health monitoring, emergency alert systems, smart devices such as hearing aids and wearable heart monitors, smart bed management.
App-based crop and livestock monitoring, and environmental sensors collecting information about farmland so as to optimise yield.
Environmental protection
Monitoring of pollution levels, wildlife habitats and soil health, and earthquake early-warning sensors.
Infrastructure management
Monitoring bridges, traffic, wind farms and railway track for safety and repair needs.
Remote control of domestic heating systems, and connecting domestic energy consumption monitors to the Smart Grid to balance energy usage.

Consumers are growing increasingly familiar with a wide range of tech that makes use of the Internet of Things. There are devices that can inform a parent about their baby’s breathing pattern and heartbeat during nap time, for example; remind them if they’ve forgotten to take their medication for the day; calculate how many miles they have run; or indicate how to get more efficiency out of their heating system.

But IoT devices aren’t limited to home comforts in the consumer sphere.

Such machine-to-machine communication is also widely used in the manufacturing and energy sectors, for example, to track machinery operations, report faults and raise service alerts. In agriculture, producers and farmers benefit from self-driving tractors, sensors to improve production output in conjunction with satellite imagery, and wireless environmental sensors to monitor crops and livestock.

From computer hard drives to cars and aircraft, devices with IoT capability can sense when components are exhibiting faults or nearing their end of life. Not only can they report this information back to a business via its CRM system, but they can also take action by ordering replacement parts or requesting a completely new device – all before the owner or user is even aware of the issue. They can also communicate important messages.

Examples of Consumer IoT Applications

Zero Motorcycles , aims to deliver a seamless customer experience via their connected bikes. If an owner has a mechanical problem, all they need to do is tap the help button in the Zero Motorcycles app and get service advice on the spot: Zero can access key data remotely, diagnose the issue, and schedule an appointment if necessary.

How does the Internet of Things work?

For the Internet of Things (IoT) to work, computer chips and sensors with a means to connect to Internet are embedded in objects such as factory equipment, cars, buildings and devices. These then transmit and receive data via the internet, typically reacting according to predetermined event rules. Devices can also send the data gathered to cloud-computing services over the internet, Bluetooth, NFC etc. Data can then be aggregated and analysed by businesses to improve or enhance their services, or to determine bugs.

What are the business benefits of the IoT?

With the Internet of Things in its infancy, businesses are still finding applications for improving systems and processes. But already the range of benefits includes:

  • Improved productivity from the automation of processes
  • Reduction in waste from smarter stock monitoring
  • Less time wasted through equipment breakdown
  • Cost savings and green benefits from reduced energy consumption
  • More efficient production from real-time diagnostics
  • Improved levels of customer experience and service by pre-empting issues and responding proactively
  • Improved profitability
  • More informed strategic decision-making

One important way in which the IoT can assist businesses is in leveraging insights from big data, which can be hard to handle without the right automated processes in place.

The IoT enables organisations to collect and analyse customer information in real time – without the need for a human intermediary to collect and enter it or the data volume limits that that necessarily entails. And this in turn means product design and marketing strategies can be informed by more accurate, real-world data.

For example, if a new product isn’t performing as well as anticipated, getting the data more quickly puts organisations in a better position to decide how to react and helps them save money by enabling them to avert or modify a strategic misdirection.

And of course, the IoT represents a massive business opportunity in itself.

In 2017, in terms of hardware spending, the use of connected things among businesses was set to drive $964 billion in hardware sales, according to Gartner. Consumer applications would amount to $725 billion (2017), according to the same figures, and by 2020, hardware spending from both segments was set to reach reach almost $3 trillion.


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What's driving the growth of the IoT?

The simple explanation for the huge expansion of the IoT is that everything is now in place to enable it, especially the rise of the smartphone alongside processing and communication improvements. By the end of 2018, more than a third of the global population will be using a smartphone, according to eMarketer.

This has led to the explosion in the use of the cloud and cloud applications like CRM and email which can be accessed anywhere, thanks to internet-enabled mobile devices. Businesspeople can now access their company's applications on the go without being restricted to corporate networks and specific geographical locations.

The final piece of the puzzle is social networking technology and the adoption of communication networks and communities as a way of receiving information, collaborating with others and ensuring that the right information flows to the right people.

By publishing and exposing Application Programming Interfaces (APIs), for example, platforms like Salesforce Platform ensure that information from the Internet of Things can flow straight into CRM and other software systems where its value can be used to maximum effect. From there, it can be accessed from anywhere— on a computer, smartphone or other mobile device.

Where next for the Internet of Things?

The future of the Internet of Things will only be limited by imagination.

People are already thinking about ways it can help improve lives. Smart cities, for example, can include traffic lights that adapt to the size of queues, speed limits set to match weather and traffic conditions, and rubbish bins that alert the authorities when they're nearly full.

Other applications include pollution monitoring that steers traffic away from affected areas, buildings that spot intruders and detect water leaks; and further remote monitoring of patients by doctors.

The powerful advantages that the IoT enables make it a game-changer for consumers and businesses alike.

How will the Internet of Things affect customer relationships?

The growth in connected devices and the IoT is already impacting the way businesses work. Customers expect a rapid, effective and personal response to their enquiries and issues; automating processes in a way that assists cost cutting and improves reliability is a business ambition that the IoT can play an essential role in.

Not so long ago, customer relationships were built on the foundations of face-to-face and telephone contact. A long and indirect chain of communication stretched between producer and customer, with retail staff, sales reps, repairs and complaints departments the links between the two. Now customer expectations are much higher, and businesses need to match those expectations by ensuring that their customer care capabilities are up to the task.

The Internet of Things enables that. Information about customers can be sent automatically to an organisation’s CRM platform in real-time.

This information can include:

  • how and where they are using products that have been purchased
  • what they are using them with
  • whether their purchases are working properly

For example, Toyota Friend, which is based on Salesforce Chatter, enables people to interact with their car, dealership—and Toyota itself. In addition to prompting drivers to recharge whenever their EV or PHEV battery is running low, it enables the car to “tweet” service information to its owner.

This is just one example of how the IoT will enable business to understand their customers in a whole new way, and with a level of detail that until now has simply not been possible.


That’s a lot of info!

Here’s what you should take away from this article:

  • What is the Internet of Things? The Internet of Things (IoT) describes physical objects that have an Internet connection and transmit data online.
  • What are some examples of IoT use? Examples of IoT use include home-monitoring systems, smart vehicles, health and fitness apps, remote energy control and machinery fault diagnosis.
  • How does the IoT work? The IoT uses embedded sensors and computer chips in everyday objects which can transmit and receive data via the Internet.
  • How can businesses benefit? Businesses benefit by leveraging insights from big data to increase productivity, reduce energy consumption and improve customer service.
  • What’s driving the growth of the IoT? The IoT’s growth is driven by smart technology, the expansion of cloud computing and the spread of communication networks.
  • How will the IoT develop in future? In future, the IoT will deliver smarter solutions for improving our everyday lives, monitoring the environment and personalising real-time interactions
  • How will the IoT affect customer relationships and CRM? The IoT will improve customer relationships by automatically providing personalised responses and sending customer information to CRM platforms in real-time.

Frequently Asked Questions


What is Internet of things in simple words?

In simple words, the Internet of Things (IoT) is a series of physical objects connected via the Internet in order to transmit data online. Typical everyday objects are vehicles, home appliances and wearables, while on a commercial level they include smart devices for stock control, plant optimisation or environmental monitoring.

What is the purpose of Internet of things?

The purpose of the IoT is to collect actionable data-driven inputs from a variety of physical devices in order to analyse and consolidate their functions. Benefits to business include improved productivity, waste reduction, cost savings, real-time diagnostics, improved levels of customer experience and more informed decision making.

What are examples of the Internet of things?

Examples of the IoT on a personal level include fitness apps, smart home appliances, remote healthcare devices and domestic energy control systems. Businesses leverage IoT technology in areas such as smart control of manufacturing processes, monitoring equipment for fault diagnosis and end-of-life, and optimising transport logistics.

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