Spikes can help determine whether there is an issue by looking at how rapidly a reading is changing. For example, an outdoor IoT device may have a different operating temperature in the South Pole compared to one in direct sun in Death Valley. One way of finding out whether there is an issue with the device is by looking at how fast the temperature is changing. Z-Spikes are a typical time-based anomaly detection. It is used because it only looks at that device's readings and can give a value independent of environmental factors.
Z-Spikes look at how the spike differs from the standard deviation. They use a statistical z-test to determine whether a spike is greater than 99.5% of the population.