Today in industrial sectors factory floors have also embraced the multitude of Internet of Things (IoT) power with Industrial Internet of Things (IIoT) i.e. industrial IoT. No doubt, this is due to the pervasive use of Internet of Things (IoT) applications and other smart technologies, This according to IndustryARC research, is estimated to reach $123.89 Billion by 2021 and is estimated to grow at a CAGR of 24.4% during the forecast period 2018–2023

Whether it is a smartphone, smart city, or smart home, not to mention, we are currently living on the edge of the smart era. And IoT is one of the critical drives behind it. IDC forecasts, “Smart appliances will experience strong spending growth over the five-year forecast period and will help to make consumer the fastest growing industry segment with an overall CAGR of 21.0%.” Whether it is a smartphone, smart city, or smart home, not to mention, we are currently living on the edge of the smart era. And IoT is one of the critical drives behind it. IDC forecasts, “Smart appliances will experience strong spending growth over the five-year forecast period and will help to make consumer the fastest growing industry segment with an overall CAGR of 21.0%.”

GE Digital predicts the benefits to the global economy through IIoT will be:

• 46% of global economy that can benefit from the Industrial Internet
• 100% Industrial Internet potential impact on energy production
• 44% Industrial Internet potential impact on global energy consumption

What is the internet of things industrial application or industrial internet of Things (IIoT)? It allows the machine to machine communication through smart sensors, actuators. In addition to that, the involvement of advanced Big data analytics radically transforms a dumb device into a source of real-time analytics.

So, in a nutshell, IIoT is transforming industrial operation in an unprecedented way. However, is the Industrial Internet of things the same as IoT? What are the technicalities working behind? What are the core benefits, scopes, and challenges associated with it? Let’s have an overview!

Read more – Is Big data and IoT a perfect match?

The background of IIoT

Before we go into the history of how the Industrial Internet of Things came into the picture we need to be clear about the following key terms associated with IIoT:

1. IACS – Industrial Automation and Control Systems (IACS) is also known as Operational Technology (OT).

2. CPS – Cyber-physical systems are centralized or distributed systems. It is comprised of physical and digital components that interact with each other.

3. Industry 4.0 – This is the fourth industrial revolution characterized by CPS capable of communication. This enables making autonomous and decentralized decisions. Furthermore, it ultimately increases industrial productivity, efficiency, safety, and transparency.

4. Supervisory control and data acquisition (SCADA) – It is made of two elements

1. A distributed system to monitor and control centrally

2. A network of intelligent devices consists of sensors and control outputs

5. Industrial internet – As defined by GE – “The definition of the Industrial Internet includes two key components: The connection of industrial machine sensors and actuators to local processing and the Internet; The onward connection to other important industrial networks that can independently generate value. The main difference between the consumer/social Internets and the Industrial Internet is in how and how much value is created. For consumer/social Internets, the majority of value is created from advertisements.”  

However, the IIoT is not limited to the above five things. It also relies on cloud computing, edge computing, embedded systems, and generic computing technologies. So, we can say IIoT is the use of certain IoT technologies within a cyber-physical system (CPS) to making a machine to machine (M2M) communication and enabling the automated industrial application.

Some Major invention timeline directly related to the history of IIoT

1983: Ethernet is standardized
1989: Tim Berners-Lee creates Hypertext Transfer Protocol (HTTP)
1992: TCP/IP allows PLCs to have connectivity
2002: Amazon Web Services launches and cloud computing starts to take hold
2006: OPC Unified Architecture (UA) enables secure communications between devices, data sources, and applications.
2006: Devices start getting smaller, and batteries and solar energy are becoming powerful and more economical.
2010: Sensors drop in price, enabling them to be put into pretty much everything
2011 – BOYD (Bring your own device) becomes mainstream and industrial automation took new momentum
2016 – IIoT started to implement in many sectors.

Are IoT and IIoT same?

The IIoT is a subset of the Internet of Things and also an essential part of it. In other words, we can say it is an internet of things industrial application. In IIoT, computers, sensors, and networks interact to generate data, which improves processes. The Internet of Things creates a system of connected smart devices. Furthermore, its use makes smart connected machines and devices of the industry through the Industrial Internet of Things. In addition to that, the Internet of Things is limited to consumer-level devices. However, its power is extended at the industrial level through IIoT.

From a technological perspective, IoT and IIoT have many technologies in common such as sensors, data analytics, machine–to–machine communication, and the use of cloud platforms.

However, from the usage perspective, there is a big difference between the two. IoT application is not limited to a particular vertical, and it can connect smart appliances across verticals. But IIoT is limited in industrial sectors like oil, gas, manufacturing, etc.

The difference between the Industrial Internet of Things and Consumer Internet of Things as depicted by Vector Software – source – courtesy Vector Software

Benefits of Industrial Internet of Things

The application of IIoT leverages the below-mentioned benefits in industrial sectors.

-It helps to create smart factory applications that ultimately produce intelligent warehousing.

-In the oil and gas mining sector using IIoT, it is possible to perform predictive analysis and remote maintenance.

-IIoT plays a significant role in building connected logistics systems and supply chain management.

-Overall digital transformation in the energy and utility sector through the smart grid. This is a key in supply and network distribution.

-It plays a pivotal role in predictive maintenance of machinery using real-time data generation.

-In the supply chain industry, IIoT helps in asset tracking. It sends instant alerts to the stakeholders if the asset is at risk of damage. So, the stakeholders can locate the asset and take appropriate prevention accordingly.

-In the manufacturing industry IIoT helps in better facility management.

-Industrial security systems

Provides asset insights using analytics, which helps in asset optimization and customer behavioral patterns, ultimately helping in better performance management.

-Remote health monitoring

Industrial Internet of Things applications

Mainly IIoT is dominating below industry sectors –

1. Manufacturing

2. Energy and utilities

3. Transportation and logistics

4. Healthcare

As per the statistics provided by IDC, it is evident that IoT is going to take momentum with a fast CAGR.

Now, industry-wise, manufacturing is the largest IIoT market. It plays a significant role in asset management, maintenance, and field operations. Why manufacturing industry is leading in IoT that is driven by several factors like –

-Industrial revolution (Industry 4.0)

-Digital transformation in the manufacturing arena like automation, increased efficiency

-Customer-centric analysis using predictive analytics.

-Intelligent manufacturing

-Better asset management

The transportation and logistics market comes in the second-largest market position for IIoT for implementing advanced freight monitoring and communication systems. Another boosting system that works behind this transformation is the digital supply chain concept. Additionally, for freight monitoring transportation market will get a more expanding scope in IIoT.

Energy and utilities come in the third position, where IIoT involves in a smart grid for gas and electricity. These are vital in network and supply distribution.

Apart from the above mentioned broader industries, IIoT is also used in –

-Healthcare industry for remote health monitoring, maintenance of equipment

-Aviation industry

-Agriculture

-Smart cities

Industrial Internet of Things Challenges

Though IIoT has an enormous possibility to grow, there are some significant challenges associated with business and technicalities. The major three challenges are –

Data Integrity

Industrial data is the key to the use of IIoT. This is the most important factor based on which all the predictive analysis can be performed. This helps to get the business value out of it. However, the industrial data pattern is the most complicated one. Because it hugely varies in frequency, and not to mention, the volume of data is also significant. Hence, to find the business insights out of such a complex structure becomes a challenge.

Cybersecurity

Internet of Things is an endeavor of universal connectivity where it is evident that data is vulnerable to malicious threats. According to the Morgan Stanley / Automation World survey, cybersecurity in IIoT is a growing concern for the industries. This is because IIoT devices often use IoT for connectivity. Hence, using a hybrid IoT solution in IIoT is an open solution for most companies.

Upfront investment

IIoT often involves robots to integrate with sensors. No doubt, this is a complicated process and needs upfront investment. Hence, it becomes a financial overload for organizations.

Apart from that, there are some more internal challenges like –

–Lack of skilled resources

–Internal system barriers

–Standardization issues

–Liabilities of existing technologies

Below is a graphical representation of challenges based on Morgan Stanley and Automation world survey –

Final verdict –

The IIoT has enormous market potential in the coming years. From predictive maintenance to customer insights, overall IIoT will improve operational efficiency along with productivity. However, to overcome the challenges, few steps need to be adopted like ensuring embedded security, building partnerships to get a better ecosystem, etc.

Also, before implementing IIoT in business, it is required to clarify the use cases matched with business cases. Based on that, the strategy needs to be implemented. In this case, running a pilot project can work a lot.

Last but not least, it is evident that IIoT is enabling connected services in industry 4.0. As per Morgan Stanley’s statement, “IIoT is likely to be a key driver of market outgrowth, although it is still too early to be comfortable with the degree and timing of adoption.”

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