The IoT Technology Stack Explained

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The Internet of Things (IoT) is transforming the world around us, but the core of this change lies within the IoT technology stack.

The Internet of Things (IoT) has grown so fast and is now taking shape as one of the 21st Century’s most valuable technologies. Numerous industries, from agriculture, logistics and supply chain, automotive, healthcare, manufacturing, and even municipal and local government, now rely on IoT to collect and transmit vital data. 

Despite a chip shortage, IoT connections worldwide grew by eight percent in 2021 to over 12.2 billion active devices. The global IoT market was valued at 384.70 billion US dollars and is projected to grow at a CAGR of 26.4 percent to 2,465.26 billion US dollars by 2029. 

Now, one of the foundational pillars of any system is the set of resources that must come together for the system to be built and function. In technology, this set of resources is commonly referred to as a tech stack. This same concept applies to IoT and as the Internet of Things is becoming increasingly entrenched, it’s important to understand the making of the IoT tech stack. 

Let’s discuss this, starting with basic definitions.  

What is IoT 

Put simply, the Internet of Things, in short IoT,  is a term that refers to the interconnectedness of objects and devices through the internet. This could include anything from your home thermostat to your car. And as more and more devices become connected, the IoT is quickly becoming one of the most important technologies of our time. IoT devices range from simple household devices to complex industrial tools. 

What is a technology stack?

A technology stack, also referred to as a solutions stack or technology infrastructure, is a group of technologies used to develop applications. The core elements of a simple technology stack consists of a back-end, the server-side and the front-end or client-side.   

The term «stack» refers to the fact that the various components are layered on top of each other, with each layer providing a different set of capabilities. For example, a typical technology stack might include an operating system, a web server, a database, and a programming language. Each technology in the stack is used for a specific purpose, and together they provide all of the necessary components for a complete technology solution. When choosing a technology stack for a new project, it is important to consider the specific needs of the project and select the technologies that will best meet those needs. There is no one perfect technology stack for all projects, but by carefully selecting the right combination of technologies, it is possible to create a custom stack that is well-suited to the specific requirements of the project.

What is an IoT stack?

Having understood what a tech stack is, it’s now much easier to understand what an IoT stack is. So then, an IoT slack is simply a collection of the items that are used to build IoT applications. It’s the range of technologies, tools, standards, and procedures that cover the connection of devices, the apps that use the devices, and the data they collect and transmit. In other words an IoT stack encompasses all that is required from the device to the aim and goal of IoT. A good IoT stack should also ensure that the entire process is secure, accurate, and cost-effective. 

The core layers of IoT tech stack

An IoT technology stack consists of three core layers that play a vital role, from connecting devices to building scalable apps with clear goals.

Layer one: IoT endpoints and devices

The first IoT stack layer consists of the physical “things.” They include sensors, actuators, and other devices, often called smart, intelligent, or connected devices. There are numerous smart devices, such as: 

  • Smart thermostats
  • Smart light bulbs
  • Smart meters
  • Connected valves and pumps
  • Smart building components
  • Intelligent street lighting
  • Automated luggage weighing and scanning in Smart airports
  • Smart wearables like a smartwatch
  • Smart home appliances 
  • Smart cars.  

IoT devices are mainly concerned with collecting and transmitting data; thus, there is a communication component. The physical devices that collect the data are connected with communication and processing units.  

Sensors are vital components of any IoT technology stack and are indeed the backbone of intelligent and smart solutions. All IoT solutions depend on sensors and transducers. Sensors detect, measure, and indicate physical quantities such as temperature, moisture, light, motion, and pressure. They convert these quantities into signals that machines and human beings can understand.

Actuators are also essential components of an IoT solution. In an automated solution, sensors collect vital data, but instead of communicating it to human beings, they transmit it to an actuator to take action. For instance, in an automated AC, a sensor will detect that there is nobody in a room and send the information to the actuator, which will turn off the AC.  

Sensors are becoming increasingly small, accurate, and efficient, which has led to their integration into a wide range of systems. This proliferation of sensors has been made possible by advances in technology, including miniaturization techniques, improved signal processing and data management capabilities, and lower power consumption. Sensors are now being used in a wide variety of applications, from monitoring traffic conditions to measuring air quality. As the cost of sensor technology continues to decline, it is expected that even more innovative uses for sensors will emerge.

Layer two: IoT gateways

An IoT gateway performs certain critical functions: internet connectivity, processing,  compilation, encryption, and description of data among others. This is the layer that makes it possible for IoT devices to communicate with each other and exchange data. IoT gateways can either be software or hardware but are a combination of both in most cases. The increase in IoT applications has led to the evolution of gateways, which have grown in scope and functionality. 

An IoT gateway plays a vital role as a bridge or intersection between IoT devices and the environment, technologies, and platforms where the collected IoT data is utilized. There are several types of gateways, such as industrial gateways, home automation gateways, and edge computing gateways. 

This layer of the IoT stack is critical in ensuring cybersecurity and safeguarding against data breaches.  

Layer three: the platforms

The platform layer of IoT refers to the service infrastructure that enables the delivery of IoT services to customers. This layer is responsible for automating processes and delivering rich data analytics. It delivers value to customers by providing a platform for them to enjoy IoT-powered benefits.

Once IoT devices collect data and transmit it to the gateways for compilation, the end users need to access this data and use it. The platform can be a cloud service or an on-premise software suite. It provides a web-scale infrastructure to support IoT solutions and business operations.   

The platform may also be referred to as the application or business layer, which delivers app-specific services to the user. It defines the areas where you can deploy IoT-specific applications, such as smart health, smart homes, and cities. 

Different IoT platforms allow businesses and users to gather and interpret data which is key in delivering the right service or product at the right time. These platforms focus more on business services, outcomes, user cases, and user benefits. They provide services such as device management, and connectivity support.    

This layer also ensures that IoT solutions provide the best user experience by providing user interface designs with numerous features. Several languages and tools are used to achieve this. 

The future of IoT tech stacks: Top 5 trends to watch

What trends should you be watching out for? Take a look at these trends that are shaping the future of IoT stacks.

1. IoT is here to stay

The Internet of Things is not going anywhere,  it’s here to stay. It's been growing in popularity for the last few years and there's no sign of it slowing down. In fact, it's only going to become more prevalent in the years to come.

Why? First of all, the cost of IoT devices continues to drop, making them more affordable for businesses and consumers alike. And as we continue to see advancements in artificial intelligence and machine learning, the potential for what IoT devices can do is expanding by the day.

Just think about all the possibilities: a world where your car can talk to your home thermostat and adjust the temperature based on your preferences, or where you can track your fitness progress with real-time data from your wearable device. All these will call for much more enhanced and robust IoT stack .

2. Rise of edge computing

With the continued growth of the Internet of Things, we're seeing a massive increase in data volumes. That's why more and more companies are turning to edge computing to handle all that data.

What is edge computing? It's a distributed computing paradigm in which data and processing are brought closer to the sources of information and/or devices that generate them. In other words, it's a way to reduce the load on centralized servers by moving some of the processing power to the edge of the network.

This is a huge shift in the way we think about data, and it's something you need to be aware of if you're planning on building an IoT app. The days of shipping all your data back to the server for processing could come to an end. If this comes of age, big changes will need to be made in the IoT tech stack compositions and contents as we know them today. 

3. Quest for data privacy

Imagine a future where you can't walk into a store without being bombarded with ads for the products they think you should buy. It's not hard to see why data privacy is such a big concern when it comes to the Internet of Things.

As more and more devices are connected to the internet, the amount of data being collected is staggering. And a lot of that data is being used to target ads at us. But it's not just ads. Data is also being used to track movements and understand human habits.

There are a lot of concerns about how all this data will be used, and who will have access to it. But there are also some exciting possibilities for how it could be used to improve our lives. These privacy concerns mean that IoT tech stacks will have to increasingly be built in a way that factors privacy as a critical component of the stack. Maybe a rich security layer? 

4. Battle for standards

There's going to be a real need for some kind of standardization. Right now, we've got a few competing standards, and this is going to lead to some headaches down the road. Which IoT stack standard will prevail? No one knows for sure, but it's going to be an interesting battle to watch. In the meantime, it's important to stay flexible and be prepared for any eventuality.


If we were to summarize the key layers of an IoT tech stack as things stand today, we would simply say that an IoT tech stack is made up of three core parts: the sensors that collect data, the gateways that process and transmit that data, and the platforms that store and analyze the data so that it delivers value to the user. 

It’s important to note that the three layers here are not the only ones that make up the IoT tech stack. It’s just that these are the fundamental layers that are necessary for any IoT application to be functional. Depending on your project, you can scope more layers to serve different functions. Just remember that your stack should include all the necessary tools to get the job done and make sure the system is interoperable, so that you can easily connect with other systems.

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