Internet of Things (IoT) refers to the concept of connecting any device with an on and off switch to the internet. It gives you the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction. For example: a coffee machine indicates that a specific part needs to be replaced, otherwise it will be broken.
The majority of internet users will consist of semi-intelligent devices, so-called embedded systems. Thereby objects become an entity on the internet, it can communicate with people and other objects, and it can make autonomous decisions based on this.
But how does it actually work? An IoT system consists of a number of separate components that communicate with each other. Some only measure something, some collect data, some send commands, and some do all of this. These parts are sometimes near to each other and sometimes on the other side of the world. The components can communicate with each other via the internet.
You can also collect, distribute, and sell information about a device, the use and user of the device (which in itself can result in a new type of customer loyalty or a new income stream).