In the most general terms, the Internet of Things includes any object – or “thing” – that can be connected to an Internet network, from factory equipment and cars to mobile devices and smart watches. But today, the IoT has more specifically come to mean connected things that are equipped with sensors, software, and other technologies that allow them to transmit and receive data – to and from other things. Traditionally, connectivity was achieved mainly via Wi-Fi, whereas today 5G and other types of network platforms are increasingly able to handle large data sets with speed and reliability.

Of course, the whole purpose of gathering data is not merely to have it but to use it. Once IoT devices collect and transmit data, the ultimate point is to analyze it and create an informed action. Here is where AI technologies come into play: augmenting IoT networks with the power of advanced analytics and machine learning.

Internet of Things definition: connected objects and devices (aka “things”) that are equipped with sensors, software, and other technologies that allow them to transmit and receive data – to and from other things

What is the IoT

How does IoT work?

IoT devices are empowered to be our eyes and ears when we can’t physically be there. Equipped with sensors, devices capture the data that we might see, hear, or sense. They then share that data as directed, and we analyze it to help us inform and automate our subsequent actions or decisions. There are four key stages in this process:

How IoT technology works
Four key stages in the internet of things
  1. Capture the data. Through sensors, IoT devices capture data from their environments. This could be as simple as the temperature or as complex a real-time video feed.
  2. Share the data. Using available network connections, IoT devices make this data accessible through a public or private cloud, as directed
  3. Process the data. At this point, software is programmed to do something based on that data – such as turn on a fan or send a warning.
  4. Act on the data. Accumulated data from all devices within an IoT network is analyzed. This delivers powerful insights to inform confident actions and business decisions.

How have IoT technologies evolved?

IoT devices generate over 40 zettabytes of data every year – which is equal to 40 trillion gigabytes. Although we can’t really quantify digital data in physical terms, we can say that if all that data were converted into 1990s floppy disks – and they were laid out in a carpet – they would cover over half the earth’s surface. For IoT to evolve, a specific set of technologies had to come together and advance concurrently. And in an almost chicken-and-egg fashion, it can be difficult to say which technological development came first in the evolution of IoT.

Screenshot of IoT software
Data from sensors is processed and displayed for improved decision-making.

What is the Industrial IoT (IIoT)?

IIoT refers to the use of connected machines, devices, and sensors in industrial applications. When run by a modern ERP with AI and machine learning capabilities, the data generated by IIoT devices can be analyzed and leveraged to improve efficiency, productivity, visibility, and more. IIoT networks typically support machine-to-machine (M2M) communication, and, as well as transmitting data, IIoT-integrated devices also regularly receive automation programming from the central system.

IIoT definition: IIoT refers to the use of connected machines, devices, and sensors in industrial applications

We are now in the midst of the Fourth Industrial Revolution – also known as Industry 4.0. The “revolution” in each of the past three industrial eras was driven by game-changing technologies. In the First Industrial Revolution, it was steam power; in the Second, the assembly line and mechanized production; and in the Third, computing power. The revolution that underpins Industry 4.0 comes in the form of industrial digitization and cyber-physical systems – and IoT is at its foundation.

Welding machine

What is the difference between IoT and IIot?

The differences lie less in how they work and more in how they are used. The bulk of the world’s IoT solutions tend to have individuals as their end users and are commonly seen in things like smart appliances, digital assistants, or geo-locators on our phones.

IIoT is a subset of IoT, and, while it is driven by the same basic technologies, its focus is much more on automation and efficiency across an entire, connected organization as opposed to an isolated user. In IIoT networks, gathering and curating data is only the first step in a more complex process. To provide maximum benefit to an organization, artificial intelligence and machine learning must be applied to that data to deliver accurate insights and optimize workflows and automated tasks.

IIoT technology in modern industry sectors

Learn how INDEX-Werke, an automotive company, used IoT technology to keep their customers’ machines running during the global pandemic.

Top six benefits of IIoT solutions

As part of an overall process of digital transformation, an IIoT network provides a powerful tool for building greater resilience and competitiveness.

  1. Improved agility: When IIoT devices share data in real-time, they contribute to an intelligence network that continually gathers, analyzes, and learns from data. This allows businesses to respond to opportunity – and risk – with speed and decisiveness. And those same devices not only send data but can also receive instructions based on data analysis to adapt and optimize their automated workflows.
  2. Healthier machines: Devices and machines in an IoT network are continually transmitting operational logs and performance data. AI and machine learning algorithms use this sensor data to gain valuable predictive maintenance insights. In fact, according to McKinsey, “Predictive maintenance typically reduces machine downtime by 30% to 50% and increases machine life by 20% to 40%.”
  3. Greater efficiency: Unfortunately, “if it ain’t broke” is often the stance that businesses take when prioritizing their operational needs. This attitude can lead to inefficient legacy processes hanging on past their prime. When an operational network incorporates IoT devices, the data they gather and transmit is entirely objective. The application of advanced analytics to such data leads to ongoing recommendations and strategies for updating processes, streamlining tasks, and achieving increased efficiency.
  4. Smarter inventory management: At the start of 2020, U.S. businesses had already spent a few years weathering political and trade uncertainties. For many, the pandemic only served to drive home just how vulnerable and reactive their inventory management systems had become. When connected to an IoT network, devices, such as additive (3D) printers can reduce dependency upon external manufacturing partners and allow businesses to retain virtual inventories and manufacture the products they need – on demand. 
  5. Safer workers: In any industrial setting, there is always the danger of injury or strain. Today, many businesses are reducing this risk with the use of IoT workplace safety devices. These may deliver warnings via wearable units such as VR headsets or monitor ongoing workplace patterns to restructure factory and warehouse floors to be safer and more ergonomic.
  6. Improved customer service: IIoT networks connect more than just the devices and machines within a business – they also integrate the customer’s experience and input.  This integration results in more seamless shopping experiences, more transparent and personalized logistics, and greater ability to incorporate customer feedback and preferences into the manufacturing and development of new products.  Real-time and meaningful engagement with customers leads to a more competitive and resilient business model.
Using the Internet of Things, Endress+Hauser, a leading laboratory instrumentation and automation supplier, improved their workflow, maintenance, and business process to cut costs and reduce down time.

IIoT solutions are an important step toward digital transformation

In 2020, many businesses got a sharp reminder of the importance of resilience and visibility across their entire network of operations. The companies that are competing – and thriving – in the modern economy are no longer looking at digital transformation as something “nice to have” down the road. Today’s best businesses embrace modern digital solutions, like IIoT, as necessary tools for achieving success and growth.

Transformative outcomes with the IoT

Explore Internet of Things data services and use your embedded sensor data to drive your transformation.