How IIoT Is Rising in the Industry

What Is Industrial Internet of Things (IIoT)?

To this day, there are still many interpretations, and everyone has their understanding. Some narrowly define it as the application of IoT technology in manufacturing plants, known as smart factories; others broadly interpret it as all IoT technologies used in industrial sectors as IIoT.

This precisely indicates that IIoT is still a constantly evolving entity, with two definite elements: “Industry” and “Internet of Things”. IIoT is the integration of industrial needs with IoT technologies that can enhance industry efficiency. I personally lean towards the broader concept of IIoT.

At the Huawei Connect Conference on September 18, Huawei released the architecture of its Power IoT solution (as shown below), which is a typical case of IIoT applications. From this architecture diagram, we can see that IIoT is a comprehensive integration of intelligent perception, control, information transmission, big data, cloud computing, and industry applications.

Architecture of Huawei’s Power IoT Solution (Source: Huawei Connect Conference)

How Big Is the Market for IIoT?

Compared to Consumer IoT (CIoT), Industrial IoT (IIoT) is penetrating various industries at a speed exceeding expectations. Technologies such as industrial robotics, artificial intelligence (AI), cloud and edge computing, IoT, 5G, and VR/AR are accelerating their integration into IIoT applications.

What is the market potential for IIoT? Here are some predictions regarding the market size of IIoT from several well-known consulting firms:

From the chart, it is evident that due to different statistical standards, the predictions for the IIoT market size vary among companies; however, they all agree that the absolute market capacity and growth rate are enormous. The rapid growth of numerous industrial connections supports this vast market development.

According to an IoT Analytics report from August this year, by 2020, 50% of the equipment in global factories will be connected to networks through various technologies. By 2023, the number of IIoT connected devices will surpass that of CIoT.

In the coming years, China’s IIoT scale will also develop rapidly. Experts predict that by 2021, the market size of IIoT in China will reach 645 billion yuan, exceeding 90 billion US dollars, which aligns with the market forecast range from consulting firm IoT Analytics.

Currently, industries such as manufacturing, retail, transportation, and energy are very interested in IIoT. For instance, China is currently placing great importance on the construction of a ubiquitous power IoT, which is one of the reasons Huawei released its power IoT solution at the Connect Conference.

In the manufacturing sector, earlier this year, Sany Heavy Industry signed a comprehensive strategic cooperation agreement with ZTE in Changsha to jointly promote the upgrade of the smart manufacturing industry and accelerate the development of IIoT.

Why Is IIoT Rising?

Compared to Consumer IoT, IIoT started a bit later, so why is it predicted to surpass CIoT by 2023? We believe there are several driving factors:

Government Intervention

The leaders in IIoT are primarily Germany, the United States, Japan, and China. Taking Germany as an example, in the early 21st century, observing the rapid development of American IT companies in the information sector, and with emerging Asian countries like China joining the global manufacturing competition, the sense of crisis in Germany’s traditional manufacturing industry has greatly increased.

At the same time, the costs of raw materials, energy, and labor are rising, and consumer demands for end products are becoming more diversified, putting immense pressure on manufacturing enterprises. The German government and companies hope to change the rigid production mindset by integrating new-generation information technology into the industrial system to create more “flexible” and efficient production line models. Thus, in April 2013, Germany officially launched the concept of “Industry 4.0” and formed a project team involving government, enterprises, universities, and research institutions.

For the United States, while software and information technology are advanced, the long-standing idea of “R&D at home, production abroad” has led to a backward state in most industrial production. With the weakening of energy issues, the U.S. hopes to see a return of industrial manufacturing, necessitating the development of IIoT technology. Meanwhile, as a major manufacturing nation with a well-established industrial chain, China lacks high-end industrial automation technology and core information technology, compounded by the continuous loss of demographic dividends. Therefore, in 2015, the Chinese government formally proposed the “Made in China 2025” initiative, aiming to create a robust industrial production structure.

Demand from Enterprises and Markets

Large enterprises with monopolistic characteristics, like Siemens and GE, do not have an urgent need for IIoT because they possess the ability and resources to achieve the integration of industrialization and information technology. IIoT merely serves to further enhance their efficiency and profitability.

In some countries, the true demand for IIoT comes from numerous small and medium-sized enterprises (SMEs). Most of these enterprises lack the necessary technological accumulation and funding to achieve their own industrial and informational integration, thus urgently needing IIoT technology to improve efficiency and profitability and enhance their competitiveness.

These SMEs are often clients of large enterprises or components of the industrial chain, and their good development can, in turn, promote the growth of large enterprises. This is the real motivation for large enterprises to participate in national or governmental industrial IoT development platforms. A typical example is Siemens’ digital factory software platform, Mindsphere, which serves a vast number of small and medium manufacturing enterprises.

Keysight’s support for Industry 4.0’s digital factory software platform, PathWave, is also suitable for some industrial enterprises undergoing digital transformation. Its powerful data analysis and pre-diagnostic capabilities can significantly improve production efficiency and product quality. (Scan the QR code below to download the PathWave white paper for more details.)

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How IIoT Is Rising in the Industry

Promotion of Related Technologies

The technologies of IIoT are also divided into two major categories: industrialization technologies and information technologies. Industrialization includes industrial robotics, additive manufacturing technologies (3D printing), and sensor technologies; information technologies include cellular/digital communication technologies, big data and cloud computing technologies, and data chain technologies. The development and mutual integration of these technologies are driving IIoT’s growth at a pace beyond expectations.

Japan, as an industrial powerhouse with a high level of automation, initially did not show much interest in IIoT technology, considering it merely an upgrade of industrial automation. However, the development of IIoT applications has far exceeded the scope of industrial automation upgrades, leading Japan to realize that a new industrial revolution led by IIoT is on the horizon. Thus, in 2015, they organized the “Industrial Value Chain Initiative” to catch up in the IIoT field. This shows that the advancement of related technologies has driven IIoT beyond industry expectations.

IoT communication technologies have long been applied in various aspects of the industrial field, such as WiFi technology used in industrial gateways, LTE technology, LoRa, NB-IoT technologies used in smart water meters, and the 230M 4G LTE private networks currently used in power grids or mines. These technologies have, to some extent, promoted the development of IIoT. However, the requirements for real-time and stability in precise closed-loop industrial control have not been effectively resolved. The commercialization of 5G communication technology, which offers high speed, low latency (<1ms), and massive capacity, has elevated the development pace of IIoT to a new level.

The 5G Industrial Alliance (5G ACIA – 5G Alliance for Connected Industries and Automation) was established in early 2018 at the initiative of several major companies. In China, the research and development of 5G in industrial sectors such as power, aviation, high-end machinery manufacturing, and autonomous driving is receiving significant attention from the government and relevant enterprises. Keysight is also a member of the 5G Industrial Alliance, providing testing solutions for 5G IIoT testing. (Scan the QR code at the end to download the white paper to learn about Keysight’s 5G testing solutions or IoT testing solutions.)

Some members of 5G ACIA (Data source: www.5g-ACIA.org)

Huawei is also a member of the 5G Industrial Alliance, and the aforementioned Huawei Power IoT solution is based on 5G wireless data transmission IoT technology. New IIoT terminals or entities, such as motors and robots, are shown below. (Source: 5G Industrial Alliance white paper)

Unlike traditional IoT terminals, some terminals operate in harsh or complex application environments, posing new challenges for testing. The 5G Industrial Alliance is committed to researching and establishing relevant testing standards. As a global leader in 5G testing, Keysight is undoubtedly involved in this.

It is clear that government intervention, enterprise demand, and technology drivers are the three driving forces behind the rapid development of IIoT. Compared to Consumer IoT, IIoT is gaining momentum.

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How IIoT Is Rising in the Industry

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