What is an Internet of Things (IoT) Gateway: Functions, Types, Examples


The Internet of Things (IoT) concept was coined in 1999 when Kevin Ashtong proposed putting radio-frequency identification (RFID) chips on products to track them through a supply chain. Nowadays this technology is becoming more and more mature, while people try to find practical solutions to implement it in different industries. 

They came up with numerous intriguing small-sized IoT projects like gas leakage detectors or an intelligent anti-theft system. They also brought to life huge solutions for industries and manufacturers like smart agriculture (hello, drones and solid monitoring sensors) or the most well-known IoT concept: smart cities

Nowadays, this technology is blossoming: 

  • According to Global Market Insights, the IoT gateway devices market size is projected to increase 15% annually to $16 billion by 2026.
  • According to Statista, the global IoT industry revenue will reach over $1 trillion by 2030.
  • According to the 2021 White & Case Annual Review, Saudi Arabia is constructing four smart cities: NEOM, Qiddiya, the Red Sea Project, And Amaala. 
  • According to Fortune Business Insights, the major market players are: AT&T, Cisco Systems, Siemens AG, Oracle Japan. 

The article contains a comprehensive description of one very important IoT component: a gateway. The language of the article is easily understandable by people with any level of technical expertise. Tech-savvy specialists, in turn, can find a list with links to more technical texts at the end of the article. 

Enjoy reading!

What Is The Internet of Things Gateway

But firstly, let’s define the technology itself. 

The Internet of Things (IoT) is a network of interconnected devices that collect and exchange data with the system core (called cloud) and one another through the Internet. 

So, where is the gateway here

IoT gateway is a device compact in size and encased in a robust plastic housing that transmits the information from IoT devices to the cloud. Usually, it happens through Wi-Fi, but the transfer method varies depending on the particular IoT architecture. A sample of a gateway is the TG451:

a gateway TG451 model
Source: bivocom

The IoT gateway has various characteristics like: 

  • Processor
  • Random Access Memory (RAM)
  • Supported Wireless Connections
  • Security modules 
  • Operating system
  • And much more specific technical characteristics like I/O, GPIO, form factor, etc. 

All data in the system runs through these small boxes. But how does it work? 

How The IoT Gateway Works (On The Real Life Example)

a scheme that shows how IoT gateway works

Let’s examine the IoT gateway with the real-life use case of an IoT system with fridge sensors. It monitors the work of commercial refrigeration online. 

Every refrigerator comes with a bunch of sensors that gather information like temperature, humidity, door status (closed/open), video, etc. Every sensor comes with a microcontroller responsible for data capture and transfer. Together sensor and microcontroller form a sensor node (however, it’s often called just a “sensor” for simplicity).

A sensor node isn’t supposed to operate with the data locally, so it should pass the data to the cloud. So all sensor nodes use Low Power Short-Range Communication Protocols ZigBee to transmit the data to the gateway. Here the datastreams are aggregated, processed, and then passed further to the cloud through Ethernet (in some cases with moving sensor nodes it could be 5G or 4G). 

Small note: Theoretically, sensor nodes can connect to the cloud directly through Ethernet, but it’s not the optimal solution. Ethernet connection implies that every sensor should possess enough power capacity (which is a rare case for sensors) and appropriate equipment (even rarer case). 

We have already mentioned some IoT gateway functions like data transfer, processing, and aggregation. But let’s take a closer look at all of them. 

Key Functions Of The IoT Gateway

Function #1: Communication With The Cloud 

It’s the key role. The gateway connects the sensor layer and the cloud, using Wi-Fi, 4G, or 5G. The communication is bilateral: the raw data from devices goes to the cloud and commands go in the opposite direction. 

Why it matters:

  • IoT devices that don’t support the internet connection can get it with gateways
  • Centralized dataflow control
  • Monitoring IoT fleet
  • It gives remote control over the IoT fleet

Function #2: Route the traffic

internet speed check

The gateway operates as a router by managing the traffic flow. 

Why it matters:

  • Centralized traffic management easier to control and analyze

Function #3: Support of multiple transfer protocols 

Sensors use different low power short-range communication protocols such as Bluetooth Low Energy, ZigBee, Radio Frequency Identification (RFID), LoRaWAN, or medium-long range protocols like Wi-Fi, LoRa.

The gateway, in turn, transfers the data through more power-intensive protocols like cellular wireless/LTE, and Ethernet. However, the gateway should support all protocols to ensure communication. 

Why it matters:

  • All things speak in different languages. The IoT gateway facilitates their communication 

Function #4: Isolation of sensor nodes

Since the gateway becomes the only access point to IoT devices, sensor nodes become isolated from the public Internet. 

Why it matters:

  • The gateway becomes a firewall for sensors by not allowing direct connection to them. 

Function #5: Aggregation and preprocessing of the data (edge computing)

The gateway may have the local processing power to aggregate, filter, summarize, and cluster gathered data before passing it further. There are also options to configure the gateway to handle some typical issues and provide instant responses to the IoT devices. 

Why it matters:

  • It reduces the overall dataflow 
  • Lower data transmission costs
  • Improved response time to the IoT gadgets

Function #6: Security

IoT devices often demonstrate low-security levels. Security challenges top the list of IoT trends in 2022. Gateways become an effective solution here, coming with essential security mechanisms like TPM 2.0, advanced encryption, unauthorized access control. 

Why it matters:

  • Improved security
  • Prevent the diversion of sensitive data during transfer
  • Prevent the unauthorized connections outside the IoT ecosystem

Function #7: Local storage of data

Gateways feature enough local storage capacity to cache data when they are disconnected from the cloud.


Why it matters:

  • All measurements remain safe and sound

IoT gateways assume responsibility for almost a dozen of functions – we expect them to be smart enough to effectively operate. They are smart indeed thanks to the custom software they possess. 

Gateway Software

some of the gateway software brands

The IoT systems often require complex custom software solutions. The larger the application, the more complicated update management, fleet management, maintenance, and other operations become. The development of software for IoT gateways also requires huge expertise since all functions in the abstract above should be well-thought-out and carefully implemented.

Fortunately, there are a lot of software providers on the market. A list with some of them

Custom solutions:


  • Contiki – the OS for Next-Generation IoT Devices
  • Bosch Suite – the company provides the backbone to IoT projects.
  • Agile IoT – is a modular hardware and software gateway. 

Open-source solutions: 

  • Foghorn – is a lightweight edge IoT platform. 
  • Eclipse Kura –  is an extensible Edge Framework.

Specific IoT Gateways Types 

industrial IoT gateway

Industrial Internet of Things Gateways

The Industrial Internet of Things (aka IIoT) is geared toward durable devices since the industrial operations (for example, manufacturing) usually imply dealing with the hostile environment like high temperatures, increased dust levels, nonstandard humidity levels, etc. 

Speaking about the whole IoT system, It’s also expected from sensor nodes to have long battery life and be rugged enough to withstand the impact of occasional hits. Another requirement is energy-efficient communication networks. All these additional challenges should be addressed during the manufacturing of IoT gateways and sensors. 

Here we want to list some hardware manufacturers. There are many more. 

  • Eurotech – the company offers IoT-ready devices that help innovate customers’ enterprise business models. 
  • Dell – the company is focused on producing Gateways to withstand harsh industrial conditions.
  • Hewlett Packard Enterprise – provides ruggedized edge compute solutions that acquire, analyze, and act upon edge data in the harshest environments. 
  • Cisco – has several series of smart devices that simplify asset and facility monitoring as well as preventive maintenance. 

More vendors: 

brands of hardware vendors

Vehicle Gateways

This type is integrated into moving units like vehicles (that is how the name came). The way they affect our day-to-day life is considered in the next section. However, the biggest contribution here lies in the way vehicle gateways have changed the supply chain and transformed logistics. It became possible to get precise, real-time location even in challenging geographical surroundings! They also have a direct bearing on engine diagnostics, fuel efficiency, driver productivity, and safety. They brought to life such a concept as digital twins which is impossible to overestimate when dealing with highly expensive equipment (like aircraft engines) 

digital twin illustration
Source: https://www.mouser.kr/applications/digital-twins-offer-insight/ 

IoT Gateways: Usage Examples

usage example of gateway

Example #1: Real-time monitoring of industrial refrigerators

system of a Real-time monitoring of industrial refrigerators
Source: https://www.controlbyweb.com/applications/freezer-monitoring.html


This system is about monitoring multiple indicators in the industrial refrigerators, visualizing the gathered data and its management. Besides the technical complexity of the solution, let’s highlight the part we need: gathering of the information

Sensor nodes that monitor industrial refrigerators should handle really low temperatures. Direct internet connection of sensors with the 4g in such a harsh environment isn’t the optimal decision.

The IoT gateway role: 

IoT gateways gather the data from sensors with low-range protocols and then pass it to the cloud. Since they are placed outside the harsh environment, the need to handle low temperatures disappears. Simple and smart.

Case-study link

Example #2: Carsharing – locking and unlocking car with the phone

scheme that shows how carsharing works
Source: builtin.com 


Carsharing has become an extremely convenient option for drivers who don’t have their cars. Carsharing applications are as easy to use for final users as very complex in their background. The option to unlock cars through the Internet requires addressing severe security issues: the firmware that makes remote unlocking possible has already performed a lot of functions (it’s responsible for the security of the car and engine start which is quite a complicated system). 

The IoT gateway role: 

An IoT gateway covers all the security issues. It supports cellular communication and uses highly encrypted security protocols that facilitated the emergence of IoT-based carsharing. 

Case-study link

Example #3: Video surveillance system with tons of recorded data


Nowadays IoT vendors offer video surveillance solutions with excellent HD image quality. It would be impossible without IoT gateways that preprocess, filter, and compress data. 

For example, it took 340 cameras that worked 24/7 to secure a 19.000 meter square with 1354 apartments, parking lots, hallway, and front gates. The system produces tons of records that should be stored and analyzed somehow. 

The IoT gateway role: 

We have mentioned that IoT gateways may come with additional computing capacity to preprocess the data. That’s it! Thanks to edge computing the video footage is automatically analyzed locally. Thus the system doesn’t store useless records (for example, of unoccupied areas). 

Case-study link

Example #4: Flower Kiosk With 4g Connectivity

a wifi flower kiosk
Source: https://www.quickflora.com/what-is-bloomhouse 


It’s quite simple today to purchase flowers 24/7 thanks to an automated self-service retail delivery system. This IoT solution has an API that should be able to link to almost any POS, Website, or Mobile App. How? 

The IoT gateway role: 

Thanks to the IoT gateways with secure standards for communication through 4G technology! This solution can be easily distributed since the kiosk works as a self-sufficient secure unit. 

Case-study link

Building The Internet of Things System With SumatoSoft

SumatoSoft, a software development company, delivers custom software solutions and services to established and young companies that need tailored software for further growth.

One of the key areas of competence is custom Internet of Things software development for startups, enterprises, and middle businesses. The competence derives from 10 years of experience on the market and 150+ developed projects. 

Thanks to the 4.8 rating on the clutch platform, we stay sure that our software works great and delivers business value. 

If you plan to implement IoT gateways, get in touch with us and get a free quote! 

Additional Reading Material 

  • Whitepaper: What is IoT Architecture
  • Guide: IoT Gateway Manual
  • Article: How to build an IoT product from scratch
  • Guide: IoT Update Management 

Key Takeovers

  • An IoT gateway is a physical device that looks like a plastic box with sockets 
  • It connects sensor nodes and the cloud through Ethernet or cellular networks
  • There are 7 key functions of IoT gateways. They are:
    • Communication With The Cloud
    • Route the traffic
    • Support of multiple transfer protocols 
    • Isolation of sensor nodes
    • Aggregation and preprocessing of the data (edge computing)
    • Security
    • Local storage of data
  • Industrial IoT systems exist in a very hostile environment that requires Industrial sensors and gateways to be more rugged 
  • One of the best IoT custom software providers is the SumatoSoft company

Thanks for reading!


Let’s start

You are here
1 Share your idea
2 Discuss it with our expert
3 Get an estimation of a project
4 Start the project

If you have any questions, email us [email protected]

    Please be informed that when you click the Send button Sumatosoft will process your personal data in accordance with our Privacy notice for the purpose of providing you with appropriate information. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
    Thank you!
    Your form was successfully submitted!
    Let’s start
    You are here
    1 Share your idea
    2 Discuss it with our expert
    3 Get an estimation of a project
    4 Start the project
    If you have any questions, email us [email protected]

      Please be informed that when you click the Send button Sumatosoft will process your personal data in accordance with our Privacy notice for the purpose of providing you with appropriate information. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
      Thank you!
      Your form was successfully submitted!