IoT Gateway (Edge Gateway)

An IoT gateway – also referred to as an edge gateway – is the central interface between machines, sensors, and controllers on the shop floor (OT layer) and higher-level IT systems such as MES, ERP, or cloud platforms. Without this connection point, production data cannot be reliably transferred or meaningfully analyzed.

In practice, an IoT gateway does far more than simply pass data through: it translates industrial communication protocols, preprocesses data locally, and protects OT networks from direct internet exposure. For manufacturing companies looking to digitally connect their machines, the gateway is an essential component.

What Does an IoT Gateway Actually Do?

An IoT gateway sits architecturally between field devices and the cloud or MES. On one side, it speaks the language of the machine – for example OPC UA, Modbus, Profinet, or Ethernet/IP. On the other side, it communicates in IT-standard protocols: HTTPS, MQTT, REST, or WebSockets.

This protocol translation has a direct operational consequence: a 2008 injection molding machine with a proprietary controller can be connected to a modern cloud MES through a gateway just as easily as a new CNC machine with native OPC UA. The machine itself does not need to be modified.

In addition to protocol translation, a modern IoT gateway handles the following core functions:

Local data preprocessing at the edge: Raw data from sensors – vibration, temperature, cycle time – is filtered, aggregated, and condensed locally. Instead of an uncontrolled high-frequency data stream, only relevant values or events are forwarded. This significantly reduces transmission costs and system load.

Network segmentation and security: The OT network and the corporate or cloud network remain physically and logically separated. The gateway acts as a controlled handover point – often a baseline requirement in safety-critical production environments such as automotive, food, or pharmaceutical manufacturing.

Offline buffering: If the connection to the cloud or MES is temporarily interrupted, the gateway stores data locally and transmits it once the connection is restored. Production data is not lost during short network outages.

Edge analytics and rule logic: Many gateways allow threshold rules or simple calculations to run directly on-site – without a roundtrip to the cloud. If a current signal exceeds a defined limit, the gateway can immediately trigger an alarm or event.

IoT Gateway vs. OPC UA Server: What's the Difference?

This question comes up frequently in practice, especially when modern machine controllers already include a built-in OPC UA server.

An OPC UA server integrated into a PLC provides data from that one controller – structured, standardized, but limited to a single source. It cannot aggregate, buffer, or combine multiple machines into a unified data model.

An IoT gateway, by contrast, consolidates data from ten, twenty, or hundreds of different sources – regardless of whether they use OPC UA, Modbus, or a proprietary protocol. It harmonizes the data, enriches it with context (line, machine, shift), and distributes it to multiple target systems simultaneously: MES, historian, BI platform, cloud.

For a single new machine in a pilot setup, an OPC UA server may be sufficient. For scalable operations across multiple lines or plants, the gateway is the more robust architectural choice.

Typical Use Cases in Manufacturing

Brownfield integration: Older controllers that don't support modern protocols are retrofitted via gateway adapters. The machine manufacturer does not need to be involved, and no software update to the controller is required. In practice, this is one of the most common use cases, since machine parks in production environments are rarely homogeneous.

OEE and performance monitoring: Machine status, part counts, downtime reasons, and cycle times are collected at the edge, converted to a unified format, and passed to the MES or an OEE dashboard. KPIs are then comparable across lines – even when machines come from different manufacturers.

Condition monitoring and predictive maintenance: High-frequency process values – vibration, current, pressure, torque – are preprocessed at the edge. Only condensed metrics or outlier events are forwarded to the cloud. This makes predictive maintenance economically viable even for companies without unlimited cloud bandwidth.

Multi-site rollout: Centralized gateway management enables remote configuration and updates across many locations. New machines can be integrated into the data model within hours rather than weeks using predefined mappings.

IoT Gateway in Cloud MES Architecture

In a modern digital factory architecture, the IoT gateway occupies a clearly defined position: below the MES, cloud platform, and data lake – and above the PLCs, sensors, and field devices.

This position has three practical implications. First, OT networks don't need to be directly connected to the internet or the corporate cloud – the gateway handles controlled data forwarding. Second, all upstream systems see a unified data model, regardless of how heterogeneous the machine park is. Third, local responsiveness is maintained even if the cloud connection is disrupted.

For companies deploying or implementing a cloud-native MES, the IoT gateway is not an optional add-on. It's a necessary component of a stable, scalable architecture.

Frequently Asked Questions About IoT Gateways

How much does an IoT gateway cost? Costs vary significantly depending on the vendor, feature scope, and the number of supported protocols. Industrial solutions typically range from €500 to €5,000 per device for hardware, plus software licenses or SaaS fees for management. In cloud-native MES approaches, gateway software is often included as part of the overall package.

Can an IoT gateway be operated without cloud connectivity? Yes. Many gateways can deliver data locally to an on-premise MES or local historian without any cloud connection. Offline buffering works regardless of whether the target is a cloud or an internal system.

What happens if the gateway fails? In the event of a gateway failure, no new data is typically transmitted to the MES. Modern solutions therefore include redundancy mechanisms such as failover and local buffering, and send alerts when connections drop. The machines themselves continue to operate – only data collection is affected.

How does an IoT gateway differ from an industrial router? An industrial router connects networks at the IP level but does not understand OT protocols and performs no data transformation. An IoT gateway is specifically built for OT/IT convergence: protocol translation, data modeling, and application logic are core functions that a router does not provide.