An IoT gateway works by receiving data from IoT sensors, which it can then send onwards to the cloud; it also receives information from the cloud which then goes to the device itself to help it perform necessary functions, such as regulating environmental changes and detecting possible issues with functioning. All information moving from an IoT device to the cloud, or vice versa, goes through the connected IoT gateway. By managing this connection, the gateway can perform security tasks, help manage devices and translate protocols.
One benefit of an IoT gateway is added security for the IoT network and data. Because the gateway protects information moving in both directions, it protects data moving to the cloud from leaks, as well as prevents unauthorized control of IoT devices from outside parties.
Traditional IoT gateways are non-intelligent and perform basic gateway functionalities. However, non-intelligent gateways have recently been pushed out by "smart" IoT gateways, which are able to perform edge analytics on data produced by IoT devices before it is sent to the cloud. This makes analytics much faster and cuts down on storage for the vast amount of data produced by IoT products. However, performing edge analytics instead of keeping all IoT data may not be an effective solution in some situations, as this process causes the loss of a lot of raw data.
IoT gateways can also be used to convert non-cloud connected legacy devices to the internet for brownfield development. By connecting a gateway to a device's sensors, the data can be analyzed or transported directly by the gateway, even though the device itself would be unable to do so.