Internet of Things (IoT) Technology Industry Definitions, Terminology, and Explanations

Learn common IoT technology terminology.

This complete 101 guide will help you better understand the commonly used terminology, their definitions, and standard industry acronyms used in internet of things. Whether you are an entrepreneur developing your own IoT app, or an enthusiast looking to purchase a smart thermostat for your home, this glossary will reveal new terms commonly not found in standard dictionaries.



An acronym of IPv6 over Low power Wireless Personal Area Networks. The 6LoWPAN was originally designed with internet of things connectivity in mind, with the idea that the Internet Protocol could and should be applied to even the smallest devices, and that low-power devices with limited processing capabilities could achieve connectivity.


A device that complements a sensor in an IoT enabled system, that converts an electrical signal into action. This is often done by converting the electrical signal into non-electrical energy, such as motion. A simple example of an actuator is an electric motor that converts electric energy into mechanical energy (i.e. movement).

Application Program Interfaces (API)

A set of software commands, functions, tools, and protocols that programmers can use to develop software applications that can run on a various operating systems or websites. APIs make it easier for programmers to develop software, and create a level playing field ensuring that all users experience the same user interface when using software built on the same API.

Big Data

A term used to describe large data sets that cannot be efficiently handled by traditional data management systems. In addition, big data compatible systems can take extremely large data sets and computationally analyze them to reveal patterns, trends, and associations, especially relating to human behavior and interactions.

Bluetooth Low Energy (BLE)

A wireless personal area network technology aimed to support internet of things connected devices. It is the power and application friendly version of Classic Bluetooth that was built for the Internet of Things (IoT). It is intended to provide considerably reduced power consumption and cost while maintaining a similar communication range for IoT enabled smart devices such as personal fitness bands and beacons.


Lighter, purpose-built protocols that allow the “things” in IoT to communicate and interchange. Built for machine-to-machine communication, they are efficient, extensible data frames that have an open-source structure, private data fields, and a simple checksum.

Cloud Computing

A form of internet-based computing that uses a shared infrastructure of resources (i.e. servers, networks, software applications and cloud-based services), as opposed to a local server or personal computer. This allows users to scale up their data management and processing capabilities while reducing costs through economies of scale. Cloud vendors maintains the cloud-computing infrastructure, in which users can purchase on demand access and only pay for the resources they use.

Edge Layer

An architectural shift in IoT that breaks the norm of the traditional client-server model. This is the first layer of connectivity for devices to connect to before going to the server. Responsible for the local connectivity of devices and for managing the data collection and connection to this server.

Embedded Device/Systems

A computer with a dedicated function within a larger mechanical or electrical system; it is embedded as part of a complete device.

Industrial Internet

The integration and linking of machine learning, big data technology, sensor data, and machine-to-machine communication automation. This is done with the knowledge that the Internet of Things (IoT) will be scaled and driven by enterprises. The idea is that smart machines can more accurately capture and communicate data to help corporations find problems sooner and increase overall efficiency.

Internet of Things (IoT)

The Internet of Things (IoT) refers to scenarios where network connectivity and computing capabilities extend to predominantly physical objects that are not normally considered computers, which are embedded with electronics, software, sensors, and network connectivity and enables them to collect, generate, and exchange data over a network without requiring human-to-human or human-to-computer interaction.
*Due to the nascency of this emerging field, some assert that there is no single, universal definition for the internet of things.

Internet Protocol (IP)

A set of rules, open network protocol, and primary method used to send data from one computer to another on the Internet. Each computer (known as a host) on the Internet has at least one IP address that uniquely identifies it from all other computers on the Internet. There are currently two versions of IP: IP version 4 (IPv4) and IPv6.

IP version 4 (IPv4)

A version of the Internet Protocol (IP). IPv4 is an older version, and IPv6 is the more recent version. IPv4 offers an addressing space (i.e. unique identifiers) of about 6 billion addresses, out of which 4 billion addresses have already been used. IPv4 allows for groups of co-located sensors to be identified geographically but not individually, thus restricting the value that can be generated through the scope of data collected from individual devices and limiting potential applications for internet of things enabled devices.

IP version 6 (IPv6)

A version of the Internet Protocol (IP). IPv6 is the more recent version of the Internet Protocol (IP), which succeeds IPv4. IPv6 has superior scalability and identifiability features, in comparison to IPv4. The IPv6 address space supports approximately 3.4×1038 unique addresses, whereas, IPv4 was only able to support a 6 billion address space.


The time delay in transfer of data from one point in a network, to another point in the same network. Low-latency networks allow for near-real-time data communications. High-latency networks require more time for data communications. Thus, lower latency networks are preferred.

Local Area Network (LAN)

A computer network that links devices within a given area such as a within a house, building or group of adjacent buildings. LAN extend to a geographic range of at least 100 meters. Devices could connect to wired or wireless LAN technologies. Examples of wired LAN technologies include Ethernet, and fiber optics. An example of Wireless LAN technology is Wi-Fi.

Low-Power Devices

Electronics that have been designed to use less electric power than traditional devices. These are necessary to the future success of IoT because, as sensors become more advanced, devices need to be able to operate for longer periods of time without relying on manual maintenance or loss of data.

Machine-to-Human (M2H) Interfaces

A type of communication and set of technologies that enable machines to directly interact with human beings. Common examples of M2H interfaces include wearables, home automation devices, and autonomous vehicles. Based on collected data and algorithmic calculations, machines can convey suggestive actions to humans, who can then choose to act or not act upon the suggested actions.

Machine-to-Machine (M2M) Interfaces

A type of communication and set of technologies that enable machines to communicate with other machines and drive actions. M2M is often used interchangeably with the IoT, however, the IoT is a broader concept that includes machine-to-machine (M2M), machine-to-human (M2H) interfaces, and support systems that facilitate the management of information in a way that creates value.

Mesh Network

A type of wireless communications network in which a device transmits its own data and also serves as a relay for other nodes by providing the most efficient data path through routers.


An infrastructure of hardware components and software protocols that allow devices to share data with each other. In a network, networked connected devices exchange data with each other using a data link. Data link connections are established using either cable media (e.g. Ethernet) or wireless media (e.g. Wi-Fi).

Near-Field Communication (NFC)

A short-range wireless connectivity standard (Ecma-340, ISO/IEC 18092) that enable two electronic devices, one of which is usually a portable device such as a smartphone, to establish communication by bringing them close to each other. NFC works by using magnetic field induction that establishes communication once the devices are either touched together or brought within a few centimeters of each other (approximately 4 centimeters; 2 inches).

Network Protocol

A set of rules that define how computers identify each other on a network. One example of a network protocol is the Internet Protocol (IP) that offers unique addresses to machines connected to the Internet.


In the context of internet of things, platforms enable connectivity between ‘things’ or devices. Platforms often consist of several different component platforms such as a software platform, an application development platform and an analytics platform. True end-to-end IoT platforms consists of additional components such as device management, scalable database storage, and external interfaces.

Personal Area Network (PAN)

A network used for data transmission amongst devices such as computers, telephones, tablets, etc. PANs extend to small geographic ranges of at least 10 meters, such as inside a room. Devices can connect to wireless PAN technologies such as Bluetooth and ZigBee as well as wired PAN technologies such as Universal Serial Bus (USB).

Person to Machine (P2M)

A type of communication where humans start, change, and/or end something on a machine. Examples of P2M communications involve turning on/off a light and typing on a keyboard. This type of communication is used in your daily life and you may not realize it.

Person to Person (P2P)

A type of communication where humans communicate with other humans. P2P interaction can take place in the natural world, digitally, etc. P2P can also be by simpler things such as talking or using body language to convey a message. This type of communication does not require technology to work.

Radio-Frequency Identification (RFID)

A wireless system that uses electromagnetic fields to automatically identify and track tags attached to objects. RFID systems are comprised of two components: tags and readers. RFID tags contain electronically stored information. Passive tags collect energy from a nearby reader’s interrogating radio waves, and active tags have local power sources such as a battery. RFID readers are devices that have one or more antennas that emit radio waves and receive signals back from RFID tags.


A device that is used to ‘sense’ a physical condition or event. A sensor works by converting a non-electrical input into an electrical signal that can be sent to an electronic circuit. In the context of internet of things, sensors do not function by themselves—they are part of a larger system comprised of microprocessors, actuators, and other related components.


Connected devices that can be equipped with different types of sensors and are worn on a person’s body. They are meant to monitor, collect, and quantify data about a person’s life and environment, and allow them to interface with that data.


A wireless networking technology that uses radio waves to provide high-speed network and Internet connectivity. Wifi is widely used as an alternative to a wired LAN, allowing electronic devices to connect to a wireless LAN (WLAN) network. Wi-Fi is the standard way computers connect to wireless networks, and virtually all modern computers have built-in Wi-Fi chips.

Wide Area Network (WAN)

A telecommunications network that spreads over a large geographical area. Business, education and government entities employ the use of wide area networks to relay data among staff, students, and suppliers regardless of geographical location. WANs are internetworks that are set up by connecting a number of local area networks (LAN) through routers. The Internet is often considered to be an example of a WAN.


An open global standard for wireless technology designed to use low-power digital radio signals for personal area networks. ZigBee operates on the IEEE 802.15.4 specification and is used to create networks that require a low data transfer rate, energy efficiency and secure networking. It is employed in a number of applications such as building automation systems, heating and cooling control and in medical devices. ZigBee is designed to be simpler and less expensive than other personal area network technologies such as Bluetooth.


Zwave (or Z wave or Z-wave) is a protocol for communication among devices used in home automation, such as the residential control and automation market. Zwave is intended to provide a simple and reliable method to wirelessly control lighting, HVAC, security systems, home cinema, automated window treatments, swimming pool and spa controls, and garage and home access controls. Z-Wave automation systems can be remote controlled via the Internet, using a Z-Wave gateway or central control device which serves as both the Z-Wave hub controller and portal to the outside.