Nowadays, the term IoT (internet of things) have become extremely important in our life. This technology is used in many fields such as education, health, industries, agriculture and infrastructures. In order to learn and understand how this technology works, many practical learning tools are used. The aim of the thesis is to introduce a iot simulation tool, where student can simulate or build and manage the systems for better understanding of the philosophy behind iot networks. The tool used is Cisco packet tracer which is a software developed by Cisco that is used to create and simulate a virtual network, basically a wireless network, without the need for any network hardware. The tool is free of charge, and suitable to work with almost all the operating systems. Cisco packet tracer allows users to have a practical networking technology knowledge. In this thesis, "Cisco packet tracer" is used to design an internet-based home automation system or smart home.