IoT and IIoT: key differences between the two technologies

IoT и IIoT: ключевые отличия двух технологий
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27 February 2018
Nowadays, IoT and IIoT technologies have become widely popular. Consumer-oriented IoT (abbreviation of Internet of Things) and industrial IIoT (abbreviation of Industrial Internet of Things) are quite different, despite their names and a certain similarity between their top-tier concepts. The concepts behind these technologies have been developing in parallel while borrowing ideas from each other. Moreover, the similarity of the terms, IoT and IIoT, makes some people with small knowledge of the subject wonder why the latter does not penetrate our life as easily as the former. Is it because companies’ management teams are incompetent or reluctant to streamline production efficiency? To dismantle the myth, Alexander Drozdov identified essential differences between IoT and IIoT. The author does not aim at an exhaustive survey of the technologies, but the aspects mentioned below are sufficient for the business community to understand the difference.

What do the two technologies have in common and what is the difference between them?

The only common feature of these technologies is that they offer versatile standardized protocols enabling devices from different manufacturers to easily communicate with each other, exchange information, and make decisions based on that information.

Key differences between IoT and IIoT

In this section we are going to discuss the basic differences between IoT and IIoT.

Purpose of creating. The Internet of Things (IoT) was set up to make people’s life more comfortable. It is designed to make our domestic routines easier, cheaper, and safer. On the other hand, the Industrial Internet of Things (IIoT), as the term suggests, is aimed at gaining production benefits and higher business profitability.

History of development. IoT is a smooth development of the smart home technology, while IIoT suggests improvement of existing production telemetric and telematic systems.

Cost of failure. In case of IoT, the cost of failure is small. If heating is not turned on before you come home, you can turn it on yourself when you are back: it is not a big problem. The same is true of smart security systems that are usually backed up by some basic devices. It is different with IIoT: if a mechanism malfunctions or a half of a network fails, the production suffers significant losses or completely closes down.

Cost of solution. IoT-based solutions are inexpensive and usually do not have many sensors. Customers generally buy IoT devices because of their recognizability, image, and novelty. On the other hand, IIoT solutions cost a lot, as very many devices need to be installed at a production facility. Besides, IIoT devices are expensive because they are expected to be highly reliable, safe, and efficient under various (often corrosive) conditions. Decisions to implement IIoT at production sites are made when they are economically sound.

Speed of implementation. The implementation of IoT is very fast because smart devices and parts are purchased as replacements for existing equipment or in the course of repair works. The introduction of IIoT is slow, as it very often demands a full upgrade of the production infrastructure. It is typical to implement IIoT in steps, so proposed solutions should be scalable, upgradable, and compatible with some parts of the legacy infrastructure.

Maintenance cost. The maintenance of IoT devices is inexpensive. It is enough to replace failed equipment, which does not affect user’s expectations. In contrast, the maintenance of IIoT devices is expensive, because complex solutions are used, they are often extremely difficult to replace, and failure of units may result in partial or total production interruption.

Complexity of algorithms. IoT devices use simple algorithms to automate routine procedures, like making tea, turning on the light and so on. In contrast, IIoT devices employ sophisticated multitier algorithms based on modern mathematical algorithms. The use of neural networks in IIoT makes it possible to manage risks, predict production efficiency, simulate any part of the process flow, and so on. Processing of information. IoT devices process information in the real time, but delays up to dozens of seconds are acceptable. This is inacceptable in IIoT where the maximum delays can be no longer than dozens of milliseconds.

Traffic volume. IoT devices usually generate no more than a couple of MB a day of traffic, whereas IIoT can generate enormous traffic, up to 1 PB (petabytes) per day.

Employment. IoT does not reduce jobs: you do not have to fire your housekeeper after buying a smart tea pot. At the same time, IoT does not create new jobs. As for IIoT devices, their introduction results in reduction of routine and manual operations. As a result, old jobs are cut and vacancies for highly-qualified personnel capable of servicing smart industrial systems and analyzing incoming information appear.

Data security. In IoT devices there is a high risk that confidential data are intercepted, which may end up in stealing money from bank accounts. Hacking an IoT device is dangerous, as intruders may enter your home. However, in case of IIoT any intrusion into the industrial infrastructure may cause a real disaster. That is why security is of critical importance here.

The utilization areas of the two technologies

As follows from the above, IoT and IIoT are completely different technologies with different target audiences are aimed at different tasks. The top priority of IoT is to assure comfort for everyone. Further, it helps control expenses, thus saving money. Generally, IoT is for domestic use. Smart house systems are a good example. IoT can manage not just heating and lighting, but also electronic door locks, surveillance, automatic lawn watering and so on. IoT can be helpful in optimizing electric power consumption by automation of electric meters. For this purpose, all meters should be connected to the same network in which cost tracking is already performed, power, water, and utility gas consumption are analyzed and so on. The owner of the household can save money thanks to IoT devices that turn off the light of water when they are not needed. Thus, utility costs can be brought under tight control.

The Industrial Internet of Things is valuable in a different way, maximizing energy efficiency of production lines. The IIoT technology is best matched to industrial tasks and specific industrial areas. For example, IIoT is often used for municipal lighting. IIoT is based upon the interaction of sensors monitoring the work of production units and mechanisms, which plays an important role in oil and gas extraction, mining, municipal lightning and so on. For example, street lamps can be turned on and off according to data from motion detectors. By implementing IIoT into production, it is possible to make a digital twin of a product. This reduces the percentage of defective goods, helps find out the root causes of waste, streamlines all production processes and technologies due to the detail monitoring of each step in the line of production. It results in optimizing the production line.

To make production efficient, it is necessary to gather all the information from sensors and analyze it, thus optimizing each system component. Before, a machine operator had to take readings from uncoordinated detectors and form the whole picture of the workflow unassisted. Certainly, this approach was both inefficient and time-consuming. IIoT can connect all sensors into the same network which collects and processes information from various production lines in real time. As a result, the percentage of defective goods decreases and efficiency improves.

IIoT generates huge amounts of information, thus enabling an objective assessment of the performance of various production lines. Owing to IIoT, the volume and relevance of data grow, as well as the speed of their presentation and processing. Uncoordinated machines give way to a centralized production line which makes it possible to control each of its sites as well as the impact of the enterprise on the environment.

IIoT has an advantage of monitoring the environment around the plant. Modern demands to production include environmental control, that is why companies strive to adhere to existing environmental standards. IIoT devices assist in studying the atmosphere composition, the pollution level, humidity data, and so on.

Summarizing the above, let us reiterate that the key difference between the technologies is that IoT is used in our everyday life, while IIoT is used in production. The technologies bear similar names and are based on similar principles, but their uses are different. They develop in parallel, so they do not cross each other’s paths and are unlikely to do so in the future.


Currently, IoT and IIoT technologies are on the rise and they are attracting a lot of attention from various areas. Based on these technologies, various applications for people, business, and production are created. Companies should be aware how IoT and IIoT can by applied to get economic benefits and whether it is possible to scale and transfer results obtained in one industry to other areas.

The success that major companies like Netflix and Amazon could reach largely stems from applying Big Data technologies, but other corporations failed to use them efficiently in their business models. Here, IIoT offers higher flexibility in introducing a technology to production than Big Data. However, in this case it is very important to set up convenient business models and analyze them properly. This is the only way to avoid the popular errors are made while creating an IIoT-based business.