The paper presents the LinkSmart middleware platform that addresses the Internet of Things and Services approach. The platform was designed to support the interoperability and seamless integration of various external devices, sensors, and services into the mainstream enterprise systems. The design and development of LinkSmart goes across two integrated European research projects, namely the FP6 IST project Hydra and the FP7 ICT project EBBITS. Modular architecture and functionality of LinkSmart prototype, developed by combining the service-oriented architecture, peer-to-peer networking, and semantic web services technologies, is described with focus on semantic binding of networked devices by means of underlying ontologies and knowledge-based inference mechanisms. Extensions of the solution towards the service orchestration, complex event handling, business process modelling and workflow processing are discussed and described on a mechanism of context-aware processing of sensor data.