What is the Industrial Internet of Things?

Gartner predicts there will be 25 billion connected things by 2020. But only a small fraction of these devices are in the consumer market—the vast majority will be used to streamline communications for businesses and government organizations.

So most of the Internet of Things, then, will be the Industrial Internet of Things—a network of unseen sensors and devices used by industry to collect data, automatically manage processes, and inform better decisions. Companies that use the Industrial Internet of Things will find they gain competitive advantages. They may even find their business model changing.

The World Economic Forum reported five times more sensors used in 2014 than 2012. There’s increasing funding from major corporate venture funds as well as governmental support. Companies that want to get the advantages of the industrial IoT need to start thinking about it soon.

Benefits from Connecting to the Industrial Internet of Things

Verizon’s State of the Market Internet of Things 2015 report identifies multiple benefits companies will derive from integrating connected devices into their operations:

  • New sources of earnings. Rather than selling a finished product, companies can sell machine time and quality levels. The “as-a-Service” model of business is coming to industries that typically sold only hard goods.
  • Improve asset utilization. Through predictive maintenance, availability and uptime can be improved. In addition to increasing utilization, monitoring and fine-tuning operational parameters can improve the efficiency of equipment and reduce wastage.
  • Comply with standards. IoT-connected equipment can help companies comply with environmental standards.
  • Improve employee safety. By monitoring equipment, the local environment, and even employee movement, connected devices can help prevent incidents or identify when an accident has occurred.
  • Keep assets safe. Remote monitoring and control of security systems will help protect business assets from theft or damage.

Achieving these benefits is going to require a lot of work by companies. PricewaterhouseCoopers sees companies needing to climb four rungs to fully integrate the IoT into their operations:

  • Begin data collection. This requires analysis of the company’s assets and a vision of how the IoT will be used, plus deploying the sensors and communications networks needed to collect this information. For many industrial companies, this may require retrofitting older equipment.
  • Perform real-time analysis on the collected information and use the analysis in a localized way at a machine level. This would be achieved by letting a machine schedule its own maintenance, for instance.
  • Start consolidating information and present it in a way human decision makers can interpret. At this level, the information gathered by sensor-connected devices begins to be combined with outside information sources to inform decision-making.
  • Use data everywhere. Finally, companies become truly data-driven. The information gathered by sensors is used not only to direct internal operations but is also shared with supply chain participants and customers, increasing the data’s impact.

The Industrial Internet in Action

Companies in both heavy and light industries are already getting benefits from the industrial IoT. Need some inspiration? Here are examples of how the industrial IoT is already in use, plus thoughts on other ways it might be used in the future.

Oil, Gas, and Mining

  • Schlumberger is using unmanned marine vehicles provide the ability to monitor subsea conditions without any crew or support.
  • Rio Tinto’s “Mine of the Future” relies on autonomous vehicles (including trucks and trains), plus automated drilling.
  • GE’s locomotives have hundreds of sensors collecting millions of pieces of data each hour.
  • Sensors check pressure and instruct valves to open or close.
  • Unmanned aerial vehicles can be used to monitor pipelines.

Automotive, Transportation, Logistics

  • Rolls Royce builds sensors into its ships that can detect and display hazards to the crew, plus automatically navigate around them.
  • In its Total Care offering, Rolls Royce sells engine use per hour (“as-a-Service” model).
  • Capturing and analyzing data lets transportation companies reduce fuel usage.


  • Sensors at a GE battery manufacturing plant gather statistics about the plant environment and machine operations to analyze in order to find out which conditions result in the best products.
  • Improved inventory tracking reduces lossage.
  • Worker productivity can be improved by redesigning processes based on the collected, analyzed data.
  • Maintenance will be performed when most needed, rather than on a schedule or after a breakdown.

Agriculture and Food

  • Farms using connected tractors can apply precise amounts of seed and fertilizer.
  • Monsanto offers customized seeds based on specific soil composition and weather.
  • Irrigation can be targeted to provide water to only the plants which need it.
  • Industrial ovens used in fast food restaurants download new recipes from the Internet instead of needing technicians to visit and manually load the data from USB.


  • Pharmaceutical companies use optical sensors to verify the opacity of packing. Every unit is checked, rather than sampling, as was previously done.
  • Patient-generated data lets providers tailor treatments or send needed reminders.

Barriers to the Industrial Internet of Things

Despite potentially massive benefits from the industrial Internet of Things—McKinsey estimates benefits of up to $11 trillion per year in 2025—there are significant barriers to it as well. The primary concerns are the cost of deploying all those sensors, and then protecting them.

Each connected device is a potential access point for a cyber attack. The risks go beyond merely loss of data; because these connection points are attached to and control physical devices, there are safety risks as well. Companies’ liability may extend beyond the kinds of identify theft management services commonly offered to breach victims of traditional online attacks.

Despite the risks, the benefits of the industrial Internet of Things are too tempting for companies to ignore. Surveys show that 65 percent of responding firms are either already deploying or planning to deploy IoT. Keeping up with competitors will require getting connected. In order to make the most of IIoT technology, choose an experienced consulting team to help you plan your initiatives.

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