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IoT Architecture: Complete Explanation with Examples

Want to learn more about IoT? We explain what IoT architecture is, the components and layers that make it up, and the different types of IoT architecture.

What Is IoT Architecture?

IoT architecture consists of the devices, network structure, and cloud technology that allows IoT devices to communicate with each other. A basic IoT architecture consists of three layers:

  • Perception (the sensors, gadgets, and other devices)
  • Network (the connectivity between devices)
  • Application (the layer the user interacts with)

These layers support IoT devices through data collection and processing. This architecture goes beyond the OSI model to include the transformation of data into usable information. These insights allow businesses to take immediate action through the use of automation, machine learning, and artificial intelligence.

The Importance of IoT Architecture

Administrators use IoT architecture to manage and support IoT devices. IoT devices can be anything from an internet-connected light bulb to pressure safety sensors in a chemical plant.

These devices use small sensors to collect data about their environment and send that data to a server for processing. Servers process this data to create information and insights for businesses. Many times this information is used to automate tasks that improve uptime and efficiency across multiple business systems.

IoT architecture makes this all possible by ensuring data gets where it needs to and is processed correctly. Without proper IoT architecture, networks would become unreliable, defeating the entire purpose of investing in IoT in the first place.

The Five Layers of IoT Architecture

IoT architecture can be explained in either three or five layers. Many agree that the three-layer model is simple to understand but leaves out some key details regarding how the data is used. Below is a breakdown of each layer, what it does, and why it’s important.


The perception layer represents the physical IoT devices themselves. This can include health monitors, lighting systems, autonomous vehicles, robotics, and security systems. Each IoT device collects data that requires processing.

IoT sensors are inexpensive and can collect hundreds of different data points for processing. The data collected will vary depending on the goals of the organization. For example, agricultural IoT devices can record atmospheric data, moisture levels, solid temperature, and airflow to improve crop yield and revenue.


The transport layer is responsible for sending collected data to the cloud or edge device for processing. The transport layer relies on internet gateways to move data from the physical perception layer into the processing phase.

Administrators typically rely on cellular and Wi-Fi networks to move data through the transport layer. There are a few different technologies system admins can use during this stage:

  • Cellular 4G LTE / 5G
  • Wi-Fi
  • Bluetooth
  • Low-Power Wide-Area Networks

Administrators can design their IoT architecture with a mix and match of transport protocols. Ultimately the transport protocol you use should be able to reliably support data from the sensor to the closest internet gateway. We cover this concept in more detail in our IoT connectivity article.


Once the data reaches the cloud or edge device the server can transform this data into information. Modern IoT architectures leverage machine learning and artificial intelligence that create value by analyzing this data.

For example, if an IoT sensor is recording a high fluctuation in temperature, artificial intelligence can alert to this anomaly by monitoring the current temperature compared to its baseline. In this case, the server might be able to send a command to an HVAC unit to lower the temperature and resolve the issue.


Processing typically occurs without human intervention, but humans still need to tell the server what to do when certain rules are met or thresholds are broken. The application layer is where administrators manage IoT device orchestration, create rule sets, and set service-level agreements for their IoT architecture.

If you’ve ever used an app to turn your lights on at home, you’ve used the application layer to do so. Reliable IoT architectures use the application layer to control and manage their networks from a centralized dashboard. This centralization reduces complexity, especially in enterprise IoT networks, which in turn improves efficiency and security.


Finally, we arrive at the business layer, where information is transformed into business intelligence that drives decision-making. Stakeholders and executives can use the insights collected at the application layer to make better business decisions.

The business layer typically relies on reports and live dashboards for business intelligence. Information collected from the application layer can be enriched further at this level through other integrations. For example, business intelligence analysts can correlate cost savings based on electricity consumption before and after smart lighting sensors were installed.

IoT Architecture Use Cases

It’s clear how IoT architecture transforms data, but where is it most useful? Below we’ll explore a few real-world IoT architecture examples to show how these networks create value.

IoT in Healthcare

Hospitals and clinics can generate a lot of untapped data that could be used to improve patient care and increase operational efficiency. IoT architecture can help bridge the gap between isolated patient data and the health insights doctors can use to make better decisions and respond to alerts more quickly.

Devices such as health monitors, EKG machines, ventilators, and staff devices generate data that can be transformed into valuable healthcare insights. Below are a few examples:

  • Real-time patient health monitoring and alerts through IoT health sensors.
  • Equipment and inventory tracking with GPS/Bluetooth-enabled sensors.
  • Preventive maintenance with IoT sensors that automatically create work orders.
  • Remote surgeries through IoT-enabled robotic equipment.

IoT in Manufacturing

The manufacturing industry was one of the earliest adopters of IoT technology with many companies seeking a competitive advantage. IoT sensors can help manufacturers gain insight into processes that aren’t even connected to the internet.

For example, replacing manufacturing equipment is expensive and requires downtime. This leaves many factories relying on older machines that don’t support internet connectivity. Businesses in this case can use IoT sensors to collect data and wirelessly transmit that information without having to replace the machine.

Below are some examples of how manufacturers can benefit from IoT architecture:

  • Measuring change over time through short-range IoT sensors.
  • Developing demand forecasts by monitoring production rate in real time.
  • Tracking the cycle time to understand your baseline efficiency.
  • Monitoring fluid levels, conductivity, and other data points for preventive maintenance.

IoT in Agriculture

When we think of IoT, many of us forget that farmers are taking advantage of IoT architecture to help improve their yield, predict outputs, and even autonomously manage their crops. A major challenge with IoT architecture on farms was the limited infrastructure and level of coverage required.

Thanks to private 5G, farmers are now able to design and build their own 5G networks to support their IoT architecture across hundreds of acres of land. A few different ways farmers use IoT architecture include the following:

  • Monitoring soil temperature to plant crops as early as possible.
  • Using autonomous tractors and farmer equipment powered by GPS.
  • Finding the root cause of machinery issues with root cause analysis via a mobile app.
  • Automatically adjusting water, temperature, and humidity levels for indoor growing operations.

The Future of IoT Architectures with Private 5G

The future of IoT architecture is quickly evolving to keep pace with advancements in enterprise 5G network evolution, which will help administrators deploy more reliable IoT architectures and process data faster than ever before.

Private 5G allows administrators to launch their own 5G mobile network similar to how organizations own and control their own Wi-Fi networks. Organizations using the private model have full control over their cellular resources, budget, and coverage.

In the past, IoT architecture using cellular for transport had to rely on commercial networks for service. This presented a few problems, especially for enterprise-level operations. Commercial cellular networks can throttle bandwidth, limit speeds, or charge overage fees if data usage surpasses a set amount.

This can prove disastrous for networks using IoT architecture in environments like healthcare facilities or enterprise systems. Unfortunately, commercial 5G plans can leave IoT networks with little resources during peak traffic times when they’re needed the most.

Another common issue on commercial cellular networks is the lack of interoperability between the cellular network and internal applications. Commercial cellular networks fail to identify internal applications, devices, and enterprise systems. This leaves administrators with little control over how they divide and control cellular resources across their IoT architecture, and apply the crucial network security policies that are in place for enterprise connectivity.

Private 5G solves these problems by giving administrators full control over their IoT network resources, infrastructure, and service levels. For example, with a 5G IoT network, administrators can set granular throughput and latency SLAs for specific applications across their environment. These rules are enforced by artificial intelligence algorithms that continuously monitor and change network conditions to ensure SLAs are met.

The Celona Solution

Celona partners with enterprise organizations to provide private cellular 4G LTE and 5G wireless networks as part of their IoT architecture and as a seamless turnkey solution.

As part of a Celona 5G LAN, cellular access points can be quickly deployed throughout an enterprise facility, enforcing service level objectives to key IoT applications and enabling proactive monitoring on throughput and latency requirements.

By adopting cloud networking principles, a Celona 5G LAN makes implementing private cellular wireless for IoT architecture and systems an out-of-box experience. With its ability to directly integrate with enterprise network security policies, its onboarding can be done alongside existing wireless and IT infrastructure, without interrupting business operations.

If you’re building your IoT architecture and network for the future, Celona can help. Check out our private cellular wireless network planner to estimate the size of your Celona network indoors and outdoors, or test-drive a Celona 5G LAN solution.

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