The Internet of Things (IoT) brings with it promises of smart cities with improved efficiency, increased transparency, and enhanced public services. However, few studies have empirically and systematically investigated the reasoning behind the decision to adopt IoT within municipal organizations. In this paper we study the adoption and diffusion of IoT in Swedish municipalities. We outline areas of application and perceived value creation and conclude that the main reasons for adoption and diffusion can be traced back to 1) the simplicity of the IoT solution, and 2) clear incentives. Among the municipalities that have not embraced IoT, commonly cited barriers are economic factors and that other, more politically charged, issues take priority. This paper extends our understanding of public sector perception of IoT, as well as provides a comprehensive outlook on drivers for IoT-adoption.