Misconceptions About the Industrial IoT

Due to the real potential to help companies gain a competitive advantage, the industrial Internet of Things (IoT) continues to generate a lot of interest. But all the hype has inevitably led to some misconceptions, which remain significant barriers to realizing the full value of the industrial IoT.

Here, we explain the faulty thinking behind four popular misconceptions:

Misconception 1: Industrial IoT is IoT

Industrial IoTIoT
Millions of sensorsBillions of sensors
$100 to $1,000 per sensor$5 or less per sensor
Some to No InstallationNo Installation Required
Distribution is a few dozen to thousands in one location – thousands of sitesDistribution is a handful to a dozen in one location – millions of sites
Connection over wireless sensor networks and fit-for-purpose backhaul networksConnects to the general internet
Designed for industrial use – More rugged and accurateDesigned for the consumer market
High ecological or monetary consequences from an error or hackingLow ecological or monetary consequences from an error or hacking
The industrial IoT is very different from the consumer Internet of Things. Table 1 shows some of the significant differences between the two. The scale is totally different, the price point is different, and the implementations are different.

Misconception 2: Industrial IoT is about technology and too expensive

Industrial IoT is all about changing the way an organization conducts business to gain a competitive advantage.  However, many discussions about the industrial IoT start with the technology and costs, rather than focusing on the business problems to be solved. This creates the misconception that technology is what matters the most and focus turns to the overwhelming task of replacing old, out data legacy equipment. But the reality is that the technology selection is not nearly as important as the changes in organizational behavior that must take place in order to apply the technology and gain a competitive advantage. And it’s important to note that legacy assets can be connected to the industrial IoT using sensors – which is a fraction of the cost of new machinery.

A classic story is the one about a refinery that equipped workers with handhelds to perform operator rounds.  The focus was on implementing WiFi in the refinery, deploying handhelds, and implementing the mobile software.  However, operators continued to write the readings down on a clipboard and then type the data into the handheld later.  Not changing behavior defeated the efficiency gains – of saving time and resources – that handhelds were expected to deliver.

Misconception 3: The industrial IoT increases cybersecurity risk

It’s true that cybersecurity risk is a concern, especially for a company connecting systems to an enterprise that was not designed with that capability in mind. Consider the case of a manufacturer with a 30-year old programmable logic controller (PLC).  The company was happy to get the PLC to work on their network, let alone having to deal with any security issues.

But the industrial IoT does not have to increase the risk. A properly designed industrial IoT solution is more like an online banking system than an automation system – it has security built-in from the factory, and that security cannot be turned off.Cybersecurity risk can be managed by taking non-critical control loops off the legacy supervisory control and data acquisition (SCADA) systems and distributed control system (DCS) systems and placing them onto the industrial IoT.  Control systems are no longer cluttered up with applications like equipment health and corrosion monitoring, and that non-control data is securely delivered to users without going through the SCADA or DCS.

Misconception 4: Assets Are on The Public Internet

There is a critical difference between being on the public Internet and using the Internet to transport data.  When you are on the Internet, you have an Internet address that is visible.  This visible address is why one you can control a home thermostat with a smartphone via the Internet.  Despite efforts to prevent unauthorized access with security technology such as firewalls, user ids and proxy servers, the asset is visible to the Internet, so there is a risk.

Properly designed industrial IoT applications, on the other hand, are intended to use the public Internet to transport the data but remain invisible to the Internet. There are no visible addresses, and they will not respond to Internet probes such as a “ping.”  Technology such as software-defined networks is used to safely transport data from the field to the cloud over the public Internet without being exposed to the risks.

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Industrial Internet of Things (IoT) as a service enables global access of secure, cloud-based applications and solutions that quickly scale, expand and integrate based on business needs. Securely leverage and analyze all your organization’s data – where you want, when you want. Available on public or virtual private cloud on leading infrastructure providers including AWS, Azure and Alibaba Cloud. Siemens ensures reliable uptime and availability freeing organizations from costly installations, maintenance, updates and security.

To learn more about realizing value from the industrial IoT, download the MindSphere white paper.

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