When it comes to the Internet of things (IoT), there are few, if any, companies more at the forefront of that vision than Sierra Wireless Inc. (TSX:SW)(NASDAQ:SWIR).

The IoT is having everyday devices interconnected to the web, feeding each other and us information, updates, diagnostics, and even performing routine tasks.

It could be your car indicating to you by email that it’s time for service, along with all of the components that need to be replaced, and then contacting your service dealer and scheduling the appointment for you (naturally, after looking up your availability on your smartphone calendar).

The IoT could also revolutionize small tasks around the house. Imagine your alarm clock realizing you are awake, so it begins to read off the morning headlines that are based on your preferences. Then contacts the coffee maker downstairs to start brewing a pot.

A growing opportunity

For Sierra, the IoT connection is in the connectivity of data–something that every single IoT-enabled device will need. Sierra is leading the field in terms of 4G LTE and LTE advanced solutions as well as interchangeable modules and embedded software.

The wireless embedded mobile market is slated to balloon to $214 billion by 2020 as per Radiant Insights. And that’s just the beginning. Cisco Systems is forecasting that during that same time frame there will be nearly 50 billion things connected to the Internet, double of what there is right now.

Sierra is a leader in the field, and all of those 50 billion things will need connectivity of sorts to the Internet.

Risks and challenges with great potential

Apart from the hardware, Sierra also provides data analytics software. This gives Sierra a unique opportunity to be part of both the hardware and software front of the IoT revolution.

That being said, while the opportunity for Sierra is crystal clear, there are still risks and challenges. The company is an IoT pure play without a secondary segment to fall back on should the sales of IoT hardware and software fail to materialize.

Sierra also faces competition from a growing number of vendors entering the M2M (machine-to-machine) module space that the company currently specializes in. While Sierra has a leadership role in that segment, this could start to hit margins once competition heats up.

Finally, Sierra needs to be cognizant of other large technology companies. Sierra, despite its leadership role in the IoT space, is still very much floating around the market at a small-cap status–which is approximately $700 million.

While this makes the stock more volatile than the larger companies, the concern here is primarily a larger company that realizes what Sierra already knows about the IoT and then tries to beat them out of the gate.

Sierra currently trades at just over $22 and, in my opinion, represents one of the biggest opportunities on the market. Should the IoT vision take off and Sierra continue down its current path, long-term investors will be very pleased.

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Fool contributor Demetris Afxentiou has no position in any stocks mentioned. David Gardner owns shares of Sierra Wireless. The Motley Fool owns shares of Sierra Wireless.