The Internet of Things is a very nascent area, and as with all maturing topics, the language surrounding it can be a little confusing. This is especially true when the terms are so new, and not always self-explanatory.

So, what are the Internet of Things (IoT), the Industrial Internet of Things (IIoT), and Industry 4.0?

Well, IoT (the Internet of Things) is obviously the broadest of all the terms, and it encompasses the Industrial Internet of Things (IIoT) as well as Industry 4.0.

However, IoT also includes the consumer’s Internet of Things. Devices like Nest thermostats, Philips Hue lightbulbs, and August smart connected door locks, for example fall into this category. As mentioned previously on this blog, smart home, or consumer IoT is languishing at the moment for a variety of reasons.

The Industrial IoT (aka IIoT), on the other hand is starting to really take off.

When you talk about the IIoT, you talk about everything along the value chain. Not only manufacturing, but also connected vehicles, transportation optimisation, instrumented agriculture, smart cities, and so on. This space is now starting to see serious investment because the technologies are hitting the right price point, the standards are starting to come together, and successful examples such as the SAP-TrenItalia implementation which is providing savings of €150m per annum on a €50m total investment demonstrate the viability of such investments.

Organisations such as the Industrial Internet Consortium (IIC) work with companies to set the standards, best practices and processes of the Industrial Internet. This work is vital for the success of the IIoT. This is why SAP is heavily involved in this organisation, with SAP EVP Dr Tanja Reuckert being Vice Chair of the Steering Committee.

Here’s my interview with the IIC’s Executive Director, Richard Soley.

And finally we come to the term Industry 4.0, which you can also hear mentioned in conversations about the internet of Things. What exactly is Industry 4.0? Well it refers to digitisation of manufacturing specifically – it focuses primarily on production and the shopfloor within manufacturing organisations.

The term refers to the fourth industrial revolution, and unsurprisingly it has its roots in Germany. Industry 4.0 (sometimes called Industrie 4.0) also has a number of organisations working with industry to create standards. One of the most active is Platform Industrie 4.0, a body which has its roots in the manufacturing arena, and is now converging with the IIC with respect to standards. And again, because Platform Industrie 4.0 is so heavily involved in setting the standards for Industrie 4.0, SAP are deeply engaged.

So, to summarise, IoT is the overarching term referring to all aspects of the Internet of Things, IIoT is IoT as applied to industry, while Industry 4.0 is IIoT specifically for manufacturing organisations.