1.

Sensors in the IoT device

One starts from the sensors, which capture the data that one wishes to send
back. 
The sensors themselves are simple enough. They could take temperature,
humidity, measure pressure. That's self-explanatory. 
Sensors capture electric pulse or primary analogue data sources. They can
measure temperature, humidity, light, motion, acceleration, smoke,
chemical particles, and pressure.
Sensors detect, actuators act. Actuators will operate in the reverse
direction. When triggered by the application, they take action. Electric
switches, valves, motors are actuators.
 

#2. Device connectivity

The sensors are connected to a device or a part of the device. 
And the device itself has an element that allows it to connect to the
network to transmit data to the cloud and receive commands.
The network could be Wi-Fi, the network could be cellular, it could be a
lot of technologies.
But more about this later.
Wireless access equipment includes cellular IoT modules, IoT terminals,
cellular dongles, cellular gateways, or routers.
When the connection is cellular, a SIM card or eSIM is also required as
part of the wireless access equipment hardware. 
 

#3. Application in the smart device

On the device itself – and it's the third functional block of IoT systems– is
an application. That's the logic that says, for example, "if the temperature
exceeds 20 degrees, I send a notification to the network." 
Or the logic might say, "I set to send temperature every one minute," so
that's the application, third building block, on the device.
But then, that's where the complexity starts.
The first set of jargon is in the smart device. 
You need to have the application that's running. The application runs on a
processor. That's called either an MCU, a multi-controller unit or
an MPU multi-processor unit.

#4. The network

The fourth IoT layer is the network itself that connects from the device
back to the cloud.
This device connects to the network. The network could be Wi-Fi, it could
be Bluetooth, the network could be cellular. 
Let's focus on the cellular because many IoT applications are based on it
for reliability and service levels. 
And in cellular, you've got a host of options based on the bandwidth you
want for your application or the battery.
The acronyms that you would come across would be the usual 2G, 3G, 4G,
5G of cellular. 
 

4G networks
But within 4G – which is mainstream of IoT today – there are two broad
categories.
 The LPWAN, a low-powered wide area network, has two variants:
category M (Cat-M or LTE-M) and category NB-IoT (Cat NB-IoT).
 Then you've got the mid-range bandwidth, category LTE-1 (LTE Cat 1).
And then, the high bandwidth applications typically use networks
called LTE Advanced (LTE-A) or LTE Advanced Pro.
5G networks
And very soon, with the advent of 5G, there'll be a whole new set of
acronyms that will come up. 
There's something called massive IoT, an extension in the 5G world of the
CAT-M and CAT NB we spoke about in 4G LTE environments.
Something that will be brand new on networks is called Ultra-Reliable
Low Latency Communication (URLLC). This is for IoT applications that
need extremely low latency between the data being generated and its
availability in the cloud.
So that's the kind of acronyms one will encounter along the way and the
type of technology one will have on the network itself.

#5. The application (and processing) on the cloud 

We are coming over to the cloud.
Now that the data comes back, it's stored in a database. It is
treated/processed. There are actions taken on it. That's sitting in the cloud. 
This part is a typical IT application.
A gigantic step to aid M2M evolve into IoT is the emergence of public
cloud platforms specially tuned for IoT applications. Platforms such
as AWS IoT from Amazon, Google Cloud, or Azure from Microsoft have
vastly simplified IoT and offered a common structure including security
and device management. They have also eased standardization of the
structure of messages sent from the edge device.

 #6 Data analytics

The one thing that would be different out there, though, more in IoT than
in enterprise applications, is machine learning or analytics - some people
go to the extent of calling it AI (Artificial Intelligence).
This is really different for IoT because the value in IoT is in the
data generated and the results that derive from analyzing the data
leveraging virtual data analytics.
So, this is something that will specifically come across the analytic side.
More often, that's running in the cloud, the sixth functional layer of the IoT
ecosystem.

Big data analytics can benefit the IoT-enabled smart grid, where millions
of data are collected and stored.

#7. Security
There's a seventh IoT pillar that underlies all of this.
And that's a security building block: the security at the device, the security
at the cloud, and the channel between the device and the cloud.
Security is a very broad concept and needs to be adapted to the use case.
But the general security principles established in IoT and the acronyms
used are PKI, public-key cryptography, encryption, mutual authentication,
and certificates.
Device Management and security: How do you know how your wireless
system is performing? How do you push software updates to the device?
How do you manage security? These supervisory functions are the role of
a device management platform, a sort of IoT monitoring system for your
IoT system.
Therefore, an IoT ecosystem has different elements to consider, each with
a fair amount of interdependence on the other building blocks.

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Alliances and consortia

An important factor is the attitude taken by technology providers such as
wireless module and equipment suppliers, network connectivity suppliers,
and public cloud providers leading to the emergence of protocol standards
and understandable security methodologies. 
Each plays an essential role in the IoT ecosystem and these players have
recognized that there is a need to make IoT much easier to implement.
This in turn, shortens development cycles and therefore helps to get
solutions to the market quicker and the objectives to be achieved sooner.
Today, alliances, consortia, and standardization bodies shape the IoT
ecosystem at large with agreements to ensure standardization for
compatibility, secure interoperability, safety, and quality. 
They are either focus on technology frameworks or vertical industries.
We will find, of course, the "usual suspects": ISO (International
Organization for Standardization) and ITU, ETSI, World Wide Web
Consortium (W3C), IEEE Internet of Things, IFET (Internet Engineering
Task Force).
Major alliances and consortia include Eclipse IoT, Apache Foundation,
Open Mobile Alliance (OMASpecWorks), OASIS, IEC, OpenFog
Consortium, IoT Consortium, OneM2M, AIOTI, Open Connectivity
Foundation (OCF), OMG (Object Management Group), UPnP Forum,
HYPER/CAT, OPEN INTERCONNECT (OIC), oneM2M, to name a few.
AllSeen Alliance (merged with OCF) focuses on consumer devices
while Thread Group and Apple's HomeKit focus on connected homes.
Apple's HealthKit focuses on fitness and health, EnOcean Alliance on
building automation, ESMIG on smart meters.
Open Automotive Alliance focuses on connected cars, Industrial Internet
Consortium (IIC) on industrial and work use cases, GINIVI Alliance on
transportation, HART Foundation (focused on industrial IoT).
The RFID Consortium, NFC Forum, Wi-Fi Alliance, Zigbee
Alliance, LoRA Alliance help promote connectivity standards and
certifications.
The GSMA (Global System for Mobile Communications Association) is
well known for its marketing and education activities. It represents mobile
operators' interests worldwide, uniting more than 750 operators with
almost 400 companies in the broader mobile ecosystem. 
The Internet of things Consortium, m2m alliance, IMC (international m2m
council) provide awareness, promotional tools, and activities to drive IoT
adoption.