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IoT technology is expected to offer advanced connectivity of devices, systems, and services that goes beyond M2M communications and covers a variety of protocols, domains, and applications.

By 2025, Internet nodes may reside in everyday things – food packages, furniture, paper documents, and more [SRI BI 2008]. The emergence of various applications includes building and industrial automation and cars that can interconnect millions of objects for sensing things like power quality, tire pressure, and temperature and that can actuate engines and lights. This trend quickly made it of the utmost importance to extend the IP protocol suite for these networks [Borman 2010].

It is predicted that there will be between 20 billion of IoT‐connected devices [Gartner 2015]. The IoT is expected to grow to 50 billion connected devices in 2020 [Cisco 2011] and to provide valuable information to consumers, manufacturers, and utility providers. IoT is one of the platforms of today's Smart Grid, smart city, and smart energy management systems.

The most common and relevant IoT applications to Smart Grid and DER systems include energy management, distribution automation, building and home automation, and infrastructure management.