The IOT (Internet of Things) is a global network infrastructure, linking physical and virtual objects through the exploitation of data capture and communication capabilities. The Soft Spread Spectrum (M-ary Spread Spectrum) has not only strong anti-interference ability of conventional Spread Spectrum, but also high bandwidth utilization of M-ary modulation. What's more, it has lower probability of intercept, and can adjust the communication rate and spreading gain. So it's suitable for IOT. Since the spreading code is a cyclic shift of the same sequence, FFT is proposed to get cross-correlation characteristics of the signal for demodulation algorithms , instead of the traditional multiple correlation accumulators demodulation algorithm, so that it can dynamically change the data rate and spreading gain in IOT communication system. To deal with the spreading code of arbitrary length, the new calculation of cross-correlation is designed with the cost of double length of FFT. To do so, the application of the proposed algorithm is expanded. The experimental verification based on FPGA platform shows that the algorithm can reach the theoretical level.