The Industrial Internet of Things Decoded

As manufacturers move from legacy installations towards Industry 4.0 systems driven by the Industrial Internet of Things (Industrial IoT), they’re faced with the problem of decoding what, exactly, they’re buying into. There’s a raft of confusion regarding the terminology. Clear definitions are an essential ingredient when considering process implementation. It’s key that both suppliers and customers are certain regarding what will be provided, and what benefit will be brought to the business.

We’ll cover the broader subject of Industry 4.0 in a separate post, but for now we can define Industrial IoT as being the non-human parts of Industry 4.0. What that really means is still contentious and various proponents of Industrial IoT have provided vague definitions that leave too much room for ambiguity.


So what do we at Facteon think Industrial IoT is? We define it as:

The technologies and architectures that support the collection, storage, movement and analysis of industrial-related data.


You could say that’s also a broad definition and doesn’t bring more clarity to the table. But Industrial IoT is a broad concept and detailing the possible technologies themselves is an endless task. A better approach is to put the technologies aside and instead, define the  main characteristics of Industrial IoT solutions. Doing so will also help separate the reality of Industrial IoT from misconceptions about what it is.

One of the common misconceptions about Industrial IoT is that it’s about truly real-time data. But access to real-time industrial data isn’t new. What actually separates Industrial IoT from previous systems is the ability to do it at scale and at low-cost. A more important concept is “real-time information”; information that can be both accessed and acted on instantly.

Another misinterpretation is that Industrial IoT allows you to visualise data in new ways. But again, there’s nothing new here. Yes, data visualisation is a part of Industrial IoT, but it isn’t really bringing anything new to that and is certainly not defined by it.

So what is Industrial IoT? I see it as encompassing a set of five main characteristics: Scalable, Modular by Nature, Accessible, Timely across Time and Adds Value. These characteristics are vital to a successful Industrial IoT solution.



Industrial IoT solutions need to be designed to grow and to do so in a cost-effective manner. The traditional approach to solutions involved designing a fit-for-purpose solution that fulfilled a defined need and most likely also had a lifespan defined by the investment it represented. By definition, such solutions were usually replaced rather than extended as business needs changed.

Industrial IoT, however, is focused on data and we know that data tends to keep growing, so the solution needs scalability built-in from the outset.


Modular by Nature

I hesitate to use terms like micro-service or service-oriented architecture because they have specific meaning within IT that could confuse the matter when talking about Industrial IoT. We can say that an Industrial IoT solution should be modular in its nature and have as few dependencies between its component services as possible to ensure there are no bottlenecks to data access.

In traditional Supervisory Control and Data Acquisition (SCADA) models, for example, the system works by being the gatekeeper to your data. This turns out to be a poor design since your data is only accessible through your SCADA system. Whatever the limits of the SCADA system are, they become the limits of your data. The two services should actually operate independently with a smart interface. That’s what we mean by modular.

Modularity becomes an absolute necessity in making your solutions future proof, so that they can be modified, upgraded or replaced easily and cost effectively as needs change. Technology moves at a rapid rate and you shouldn’t attempt to predict where it might end up in ten years’ time. Traditional industrial digital solutions tend to be monolithic systems designed to do everything and end up constraining you when what you need to do changes. Instead, make sure your solutions are flexible to start with, so you can end up where you need to be.



When you acknowledge that information is at the heart of your solution and that its ability to both scale and be accessed without bottlenecks is important, then it’s no surprise that accessibility needs to be a key characteristic of your solution. Your access to the information shouldn’t be constrained by your location or by the device you’re using.

It’s worth noting that while cloud services may – and often will – form part of an Industrial IoT solution, they are not a hard requirement. The solutions should be thought of as existing in the realm in which the data is consumed; not the physical networks and servers that the solutions span. In the operations world, for example, if you need to visualise, analyse or act upon data to operate a manufacturing line – and that’s all the data is being used for – there may be no real need to push it to the cloud. The cloud isn’t a characteristic of Industrial IoT, but merely one of the technologies used in support of it.


Timely Across Time

This characteristic goes back to the point that Industrial IoT isn’t actually about making data faster or more real-time. Real-time data from the physical world isn’t new. What is new with Industrial IoT is the ability to do this at scale, at low-cost and to access instant information derived from data of any age.

With an Industrial IoT solution I should, for example, be able to instantly pull up both the current data from a sensor and the average value of that data from the same sensor for the past few years. It’s about enabling instant action to be taken based on the analysis of information across time. This also feeds into the benefits of plug-and-play data science tools now available to manufacturers, but I can cover this in another post.


Adds Value

Finally, there’s the stark reality that a solution that isn’t adding value to the business isn’t a solution you need. The basis of an effective Industrial IoT solution is that you don’t, and shouldn’t, buy more than you need. It should after all be designed to be modular and scalable. Business requirements, not technology, should be the driver.

Pulling your solution from business needs rather than pushing the technology on the business isn’t a new concept. However with Industrial IoT, the technologies we now have on hand mean solutions can be designed in a more cost-effective, scalable, timely and accessible manner. The low price of data, connectivity and hardware means businesses can afford to make some mistakes on the road to the desired solution. There is possibly no greater value-add than a platform that gives you the freedom to innovate.


Bumps Along The Way

There are some traps to be aware of. Industry 4.0 and Industrial IoT, like any major innovation, forces dominant market players to adapt and change. But the pace of that change might not keep up with the marketing from those players about the state of their offerings. Dominant players with older solutions still have the largest market share and their customers will naturally tend to want to stick with a proven supplier if that supplier is pitching new Industrial IoT solutions.

But before these vendors make the full journey to offering true Industry 4.0 and Industrial IoT solutions they are likely to provide partial offerings where some Industrial IoT elements are added to existing solutions. The danger for manufacturers is that in sticking with existing vendors they may believe they are taking a low-risk path to Industrial IoT adoption but instead end up going down a rabbit hole. One that is tied to a vendor who is not providing the flexible solution they need while charging them a premium price that will make replacing that solution a few years down the road an issue.

The reality is that on the road to making your factory intelligent you will have to deal with some unknowns and it will ultimately be worth the risk. It will certainly be better for your business than continuing to operate with a no longer fit-for-purpose solution that will only get more unsuitable as time goes by. It’s likely worth facing or working with the unknown. This is a definite risk, but it may be less of a risk than continuing to offer an unsuitable solution. The road to making your factory intelligent is a risk. But working with an expert who actually understands these pitfalls and perhaps has experienced them first hand, will likely lessen this risk. 


The Facteon Advantage

At Facteon, we’ve been down this path ourselves and we believe that designing solutions around the core characteristics is the key to providing good, cost effective Industrial IoT architecture that isn’t just adding functionality and some longevity to existing systems, but instead offers a truly new way of providing solutions for manufacturers.