Forget smart fridges: the Industrial Internet of Things is the real revolution

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Industry 4.0 is already here and making massive differences

Forget smartwatches, smart kettles and garden sprinklers that use Bluetooth; cross-out the first two words from the 'Internet of Things' and you've got a good summary of what that buzz-phrase means so far. However, the Industrial Internet of Things – or IIoT – is real, and it's changing the industrial world right now.

What is the Industrial Internet of Things (IIoT)?

The phrase was a term coined by GE a few years ago as an update to machine-to-machine (M2M) technologies, while the German government calls it Industry 4.0, but what does it mean?

"It's not new, but the vernacular has evolved," says Mike Troiano, VP, Industrial Internet of Things Solutions at AT&T, which presently has 18.5 million machines connected to the internet. The IIoT is engineered very differently to the consumer-centric Internet of Things. "Think of jet engines, wind turbines, medical devices in hospitals … if I leave my Fitbit at home, it's not the end of the world, but a jet engine's connectivity solution has to run for up to 10 years – a consumer device might be thrown away after 18 months."

At its core the IIoT is about adding big data to create automated buildings, lighting, security, energy production, transportation, and industrial automation on a massive scale – it's the latter that currently makes up about half of the IIoT.

How does the IIoT differ from the IoT?

"The main difference is that where consumer IoT often focuses on convenience for individual consumers, Industrial IoT is strongly focused on improving the efficiency, safety, and productivity of operations with a focus on return on investment," says Bill Morelli, Associate Director, M2M & IoT at IHS Information Technology and Telecommunications. "There are also companies that take an even broader view who see it as a way to more tightly integrate supply chain activities with trusted partners."

What's the difference between the IIoT and M2M?

"M2M is a subset of IIoT, which tends to focus very specifically on machine-to-machine communications, where IoT expands that to include machines-to-objects/people/infrastructure," says Morelli. "Also, with IoT we see an expectation for more intelligence at the edge of the network, so the machine has the ability to not just communicate its status, but can potentially initiate an action in a more autonomous fashion."

The IIoT is about making machines more efficient and easier to monitor

Why do we need the IIoT?

The IIoT is for mission-critical problems, and it's changing economics. For instance, there are companies out there that have been building simple streetlights on poles for 100 years, but with cost savings from using more efficient LED light bulbs it could be possible for them to fit each light with a radio that sends an alert when the bulb finally goes. Or even fit it with a seismic sensor to measure earthquake technology, or an emergency callbox, or even digital signage, or a camera.

"You take a 'dumb asset' and you've made it intelligent by using wireless technology ... the light bulb company can now sell services to municipalities," says Troiano. As well as expanding a business, the IIoT is being used to drastically cut costs – a car rental company that uses sensors to detect exactly how under-filled a returned rental car is could potentially save that company millions.

Compare those two examples with the consumer-driven applications like the 'smart' light bulb that can be controlled by an app, or the ability to listen to internet radio while you're driving; both are clever, but they're not going to save anyone millions of pounds. In the wider economy, the IIoT is critical in reducing unplanned downtime of production facilities and plants.

What is the role of big telecoms firms in the Industrial IoT?

It depends what part of the IIoT you are looking at. "For pure Industrial Automation, there will not be a strong cellular play," thinks Morelli, who states that 95% or more of the current IIoT is using wired technology, and much of that is just starting to convert to IP. "Looking at the broader 'Industrial' definition, there are absolutely strong plays for cellular including fixed and mobile asset tracking, commercial transportation and video surveillance, to name a few," he says.

"There are other scenarios where cellular will be used in conjunction with low-power mesh technologies, like for metering. Beyond this, the cellular carriers also see an opportunity to provide professional services, beyond just the connectivity, and are working to offer more robust solutions to encourage growth – like the AT&T M2X program."

Launched commercially at CES 2015 after a year in beta, AT&T M2X is a managed service for developers creating new IoT solutions. "In the Industrial IoT world, connecting devices and machines to the internet only has value if you can effectively store, analyse and leverage the data that's being transmitted," says Troiano. "M2X Data Service allows businesses of all sizes to manage and better utilise the data they collect from connected devices."

IIoT is now enjoying a growth spurt

Why has there been relatively little talk about the IIoT until recently?

The IIoT is built to last and, consequently, doesn't grab headlines. "The equipment in the industrial market tends to have very long lifecycles – in many cases 10+ years, so the pace of innovation tends to be slower by nature," says Morelli. "In addition, it has historically been a very fragmented market, dominated by proprietary communication protocols."

However, the benefits of the IIoT are starting to attract the attention of CEOs, MDs and other upper management – real-time data on production, and more advanced analytics to improve productivity and efficiency are hard to resist. "Also, we have started to see industry initiatives," says Morelli. "And many of the big IT companies like Cisco, Oracle and SAP, and industrial manufacturers like Rockwell, Siemens and ABB are working to address many of the unique challenges that have held back the growth of IIoT."

 

'Track and trace' is transforming international trade

Is 'track and trace' key to the IIoT?

The IIoT in its purest form is rapidly changing global trade. There are companies that now track pallets of goods around the world from port to cargo ship to plane to truck and, eventually, to a warehouse, shop or home.

"One of our customers now monitors seafood imported from Thailand to Chicago," says Troiano. "It's on the ocean for several days, then it goes onto a third-party truck, onto a railway, then onto another truck, and finally to its own distribution centre near Chicago.

"They need to know that the seafood has been within a certain temperature range for the entire journey, and now they have sensors on the containers that look at the location, temperature, humidity, and they can even see if the doors have been opened at any point during the journey, which can speed up the process of getting it through customs."

Such mobile asset tracking is expected to quickly become the norm for high-value or perishable goods shipments, though the cost of those all-important sensors is crucial. "We try to track and trace where those pallets are, when they're arriving, and what the condition of the products on them is," says Jean Holley, Group SVP & CIO at US logistics company Brambles, which ships products globally for CostCo and WalMart.

"To do that for millions and millions of pallets and containers, it's got to be cheap – the pallet costs $20 and we make $5 profit, so the technology can't cost more than $3." However, that does depend on what's on the pallet – if it's holding a million-pound jet engine then that sensor becomes a no-brainer.

As well as increasing efficiency, that kind of tracking technology also gives companies more freedom to push contracts to third-party couriers that they may have no previous relationship with. If something goes wrong, blame is easily apportioned using real-time data. In the era of the Industrial Internet of Things, there are no hiding places.