The Internet of Things (IoT) architecture involves 4 key stages: (1) networked sensors and actuators that collect data, (2) systems that aggregate and convert sensor data, (3) edge IT systems that perform initial data processing, and (4) data centers that analyze, manage and store the data. While IoT provides advantages like large data collection and time/cost savings, it also faces challenges regarding security, privacy, connectivity compatibility and ensuring device longevity.