by Tom Comstock on Thu, Dec 19, 2019

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Growing noticeably in the past few years, the Internet of Things (IoT) has become something of a ubiquitous term in the technology world. Forecasts anticipate tens of billions of potential things to be connected over the next decade(s) and revenue projections well into the trillions of dollars per year. While the adoption of IoT technology is still in an early stage, the market is beginning to mature. No one should be surprised that these three letters are popping up in sequence so often.


However, there’s an important distinction to make between the Internet of Things as applied to the consumer space—the self-replenishing fridges, the driverless cars, the control of your thermostat from your phone—and the Industrial Internet of Things (IIoT). The addition of that fourth letter alters the term to apply more to the concept of Smart Connected Operations within a plant or production facility to create products and services.

The research spotlight will elaborate on this IoT-IIoT distinction, explain what is an IIoT platform,  and give recommendations on how industrial organizations can grow using IIoT in this rapidly changing market.

Defining the Industrial IoT

The IoT refers to the network or networks encompassing the use of standard Internet Protocol (IP) technologies to connect people, processes, and things to enable new cyber-physical systems. The Industrial IoT should be understood as a subset of the broader IoT, where these connections exist mainly to produce physical goods for the marketplace as well as to maintain the physical assets of production.

Whereas previously, the Internet has generally been understood as comprising a network of computers, the adoption of mobile, embedded sensors, and other technologies are expanding this definition to include people and objects outfitted or embedded with smart sensors. As this trend grows over time with improved technology and less expensive hardware, the number of connected “objects” will trend toward all-encompassing. By 2020, this network is expected to include:

  • Devices
  • Sensors
  • Instrumentation
  • Materials
  • Mobile and fixed assets
  • Products
  • People

Today most manufacturing companies have a legacy of information and automation technology solutions that have been implemented over several decades. Most of these solutions are built on a mix of open and proprietary communication protocols that were the industry standard at the time of their development. Given these systems do not easily interoperate with one another, the communication sticking point becomes a significant roadblock to realize Industrial IoT capabilities; creating the need for  an IIoT Platform that can integrate the information from these legacy systems.

IIoT Platform

The IIoT Platform is a future-looking framework that categorizes the technology capabilities needed to deliver Smart Connected Operations, Smart Connected Assets, and the Smart Connected Enterprise. LNS has been actively blogging and talking about the growing market activity, the progress, and development in constructing the IIoT Platform.

LNS Research has identified six critical capabilities for manufacturers to capture the real value of the IIoT Platform:

1. Connectivity, Transport, and Security

This layer includes:

  • All necessary hardware and software to connect to and network devices, equipment, and leverage sensors;
  • Support for the existing and emerging standards for integrating machines, Clouds, and applications;
  • Capabilities to move data to the appropriate application, domain (Edge, premise, Cloud) or user. (One of the critical differentiators of IIoT is the ability to break the ethernet limitation: IIoT Platforms are explicitly attempting to leverage a wide range of alternative networks including wired, wireless,s and other lower power alternatives. Per, LNS Research the wide-scale deployment of 5G telecommunications will be a crucial acceleration point for IIoT.)
  • The technology to quickly and efficiently identify and manage devices and trigger events;
  • Industrial cybersecurity capabilities focused on the device and operational security that are foundational to the whole IIoT Platform stack. (Besides, many vendors also offer more typical IT cybersecurity capabilities focused on data security.)

In many ways, the fundamental concept of IoT is really around this layer. It is the increasing ability to cost-effectively connect things/devices/equipment in ways that were previously impossible or too costly, and offers the potential to leverage them in smart-connected ways.

2. Data Conditioning and Contextualization

The days of thinking that moving all the data to a data lake will magically provide answers are over. Early products and projects found that data without context is of marginal operational value. Increasingly vendors and implementers are focused on the sources, quality, and manipulation of industrial data. Vendors now offer products and services to clean (eliminating spurious and anomalous data), stage, aggregate and orchestrate operational data.

A key and defining capability for IIoT Platforms is to go beyond structured data from an SQL database (such as financial or inventory levels) to leverage unstructured (video, social) and semi-structured (most importantly time series) data. The goal is to unify all this data into an IIoT data model (today primarily around assets only). Given that operational insights are a core benefit of IIoT platforms, these capabilities are critical.

3. On-Premise, Edge, and Cloud

Includes the various Clouds across an enterprise to implement computing and storage capabilities wherever they are most needed—at the Edge, within the plant, at the enterprise, or outside the firewall. While the early discussion of IIoT was focused almost exclusively on the Cloud, practical realities and technology innovation, have driven conversation around Edge and on-premise with the most momentum around the Edge in 2019. Increasingly, solutions allow users to deploy any functionality wherever they need or want them.

Core to understanding IIoT offerings is to recognize the scope of their Cloud offering (whether delivered directly or via their Cloud partners such as Microsoft Azure or Amazon AWS). To enable an IIoT application, a vendor directly or with a Cloud partner(s) must deliver the core Infrastructure as a Service (IaaS) capability that provides virtualized computing resources (network, servers, data centers, storage, back-up, load-balancing, security, etc.) over the internet.

To deliver on the vision of an IIoT Platform, vendors directly or with their Cloud partner(s) also need to provide Platform as a Service (PaaS). IaaS delivers an IT computing infrastructure over the internet. PaaS goes beyond to provide application hosting for the development environment inherent in the IIoT Platform. As a result, PaaS platforms offers compute and storage infrastructure, text editing, version management, compiling (if required) and testing services to help developers/enablers create new mashup applications quickly and efficiently.  PaaS also enables development/enablement teams to collaborate and work together regardless of their physical location.

4. Development Tools and Libraries

The IIoT platform includes the necessary tools to quickly create new mashup software applications that leverage all other areas of the IIoT platform, and move existing legacy applications on top of the platform with ease. Whether these are “development” or “enablement” tools is a matter of semantics. All vendors are seeking to enable less technical users to create these mashup software applications and are promoting “low code” or “no code” capabilities.  Sophisticated applications typically require an advanced understanding of IT/ operational technology (OT) systems and programming or data science. The goal of the development here is to define and enable the execution of workflows, bots or robotic process automation upon findings.  

There is a distinction within the vendor offerings about the scope of the mashup software applications that are enabled: all must provide the ability to create analytics applications focused on monitoring data streams (asset monitoring for example). Some offers go beyond monitoring to enable control applications (the ability to shut down or slow an asset based on those findings for instance).

This layer also includes the use of a broad set of statistical and optimization tools to monitor and analyze structured and unstructured data to enable unprecedented insights. This would consist of capabilities that are often described (rightly and wrongly) as artificial intelligence (AI) or machine learning (ML). Typically included would be the following types of Analytics Models: statistics based, AI/ML, first principles/physical, and operational research/applied mathematics. Also, an IIoT platform includes a broad set of analytics tools like search, data exploration/mining, image/video, and natural language processing.

5. Applications and Analytics

IIoT is a dynamic market. One of the most pronounced trends is in the strategic repositioning of several vendors from platform/toolkit to application providers. The driving force is simple: industrial organizations are typically looking for business improvement rather than technology toolkits. Increasingly, vendors are offering relatively packaged applications to solve specific operational challenges (remote asset monitoring, smart utility networks, quality, connected worker, device deployment, production monitoring, etc.). These applications may be the exclusive offering of the vendor or part of an offering that also includes the development environment.

There is a distinction between monitoring and control with many vendors focused only on monitoring/analytics applications. In analytics, LNS sees the applications ranging the full spectrum, from descriptive to diagnostic to predictive to full prescriptive analytics. Previous research has indicated that IIoT platforms/analytics are differentiating from existing practice in providing full prescriptive capabilities.

One of the most potentially impactful mashup applications that can be delivered via an IIoT platform is Digital Twins. LNS Research has written about the use of Digital Twins in discrete and Digital Twins for plant and process primarily for the process and batch industries. As of April 2018, there are few, if any, out-of-the-box Digital Twin applications available. IIoT Platform providers are well (best?) positioned to deliver this key and valuable capability.

6. Ecosystems

Beyond the capabilities and applications of the IIoT platform, vendors are now working hard to establish ecosystems around their product platform. Some companies are pursuing a model like the Apple iPhone: seeking independent application providers to write business applications using their platforms. Vendors hope that this will speed functionality to market and allow them to gain market share indirectly. Some companies are going so far as to build virtual marketplaces to enable commerce around these applications. Others are aligning partners to deliver components of the platform, services or industry-specific functionality.

As you might expect, no one vendor is best class in all these areas yet. Many vendors have begun to specialize in delivering parts of the solution. Several companies have strategically repositioned themselves around Connectivity or Transport for example.

Recommendations to Survive the Changing Environment

LNS Research sees a real shake-up coming to the IIoT landscape. There is no need for 600 different IIoT platforms or even ten. As companies continue to reposition itself, there will be accelerated M&A in the IIoT space with the collapse of the less committed, more poorly funded initiatives.

In this environment, what is an industrial organization to do? LNS Research has five recommendations:

  1. Lead IX with IIoT | Most industrial enterprises should consider the deployment of IIoT technologies in pursuit of Continuous Improvement and Industrial Transformation (IX) Initiatives. There is no question about IIoT’ potential to redistribute market share and wealth within and across industries. In our IX Readiness Research we found “Industrial Transformation Leaders” – those succeeding in their transformation program – were 44% more likely to deploy IIoT technologies as a part of their program than the “Followers.” Evaluation and deployment of IIoT Platform technology are imperative if you are going to compete effectively into the future.

  2. Monitor the Market | Organizations should actively pursue IIoT initiatives fully understanding that this is a mega, long term trend with significant vendor change likely in the future. Leading manufacturers will be those that can implement IIoT in the near term while understanding the change in direction/vendors may be required as IIoT platform suppliers deliver dramatic new capabilities over time. Therefore, continual market monitoring mechanisms need to be put in place by organizations to leverage this exciting opportunity fully.

  3. Build for Smart Connected Products | The priority for discrete manufacturers should be to redefine its products and transform the customers’ experience. Evaluating the potential of IIoT to enable Smart Connected Products in your market is imperative; you want to be the disruptor, not the disrupted. Data is the focus – what data do your design engineers need to fuel disruptive or transformative ideas? How can IIoT deliver that data to the design engineers today and into the future? Smart Connected Products should be viewed as a long-term initiative in which new capabilities to add to devices will define and evolve.

  4. Enable your Suppliers | Remember what is good for the goose is good for the gander: be sure to push your key suppliers to build IoT capabilities within their products to help accelerate your Smart Connected Assets and Operations initiatives. This is especially true in asset-intensive industries such as oil & gas, chemicals, mining, and automotive assembly. You may be able to gain most of the advantages of IIoT without deploying it yourselves directly in your operations.

  5. Transformation can be Disruptive | We strongly recommend using the updated Industrial Transformation Framework to develop an Operational Architecture that supports Strategic Objectives and Operational Excellence while simultaneously drives the IIoT platform requirements.

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