Editor's note: This article was originally published in August and is being republished from the archives due to its continued relevance.

What's in a name? If the industrial internet were called by another name, its value would remain the same—and in the industrial sector, that value is return on investment.

The terms "industrial internet," "industrial internet of things," and "Industry 4.0" are often used interchangeably as umbrella terms covering related systems and processes. As long as technology implementers understand they're referring to the same thing, substance matters more than wording.

For businesses, these three terms can be considered synonyms.

The basic form of the industrial internet, as defined by Richard Soley, executive director of the Industrial Internet Consortium (IIC) and chairman and CEO of the Object Management Group, in an interview with CIO Dive, is "the application of internet technology in industry."

For many companies, the industrial internet of things is the backbone of the industrial internet; it collects input through sensors for data analysis and to drive business intelligence. Industry 4.0, meanwhile, originates from Germany's strategic technology modernization plan, "Industrie 4.0."

In the short term, manufacturing is facing the most rapid disruption from the industrial internet, buthealthcare、smart citiesandsupply chain managementuse cases are also close at hand.

According to Soley, companies that haven't started may have already missed the first-mover advantage—even if they've avoided the "burned fingers" that some early adopters experienced—but if they don't act now, they may soon find themselves too far behind.

The concept behind the industrial internet isn't new, but in recent years, declining computing power and hardware costs have made it possible to broadly modernize and digitally transform industries that are centuries old.

Data analytics, supply chain optimization, robotic process automation, and digital twins are also key capabilities increasingly built around a company's physical products.

Although still in its early stages, the industrial internet is maturing rapidly. Since becoming an evaluation area in 2016, the field now has analytics and AI/ML systems, disappearing IoT and data silos, robust APIs, and numerous vendors, many with clear specializations,according to Forrester. After driving public cloud and building infrastructure, vendors have shifted focus back to the public cloud because their customers are continuously migrating there.

The tortoise race: slow and steady wins

Industrial internet solutions can range in scale from connecting every device in a production plant via sensors to seemingly insignificant objects like lighting.

Current (powered by GE) is a startup that combines efficient solutions like LED lights with software to create smart commercial environments. Chief Revenue Officer Deron Miller told CIO Dive that commercial real estate is one of the biggest opportunities for internet-connected technology.

Adding sensors to lighting systems can optimize commercial spaces and efficiency. But the challenge lies in convincing new customers who haven't yet integrated IoT, software, and data into systems like lighting. He said you must prove the ROI and business investment value before implementation.

To win sought-after cybersecurity, data analytics, and AI experts, industry must fight the perception of being an "unsexy" space.

—John Miller, Director of the MAPI Council

Although many "lighthouse" industrial internet projects have been implemented, relatively few organizations are moving beyond pilot stages or running the industrial internet across most of their operations. There's no one-size-fits-all solution, and starting from scratch can be time-consuming and expensive.

But this is a tortoise's race, not a hare's. Soley said companies must test solutions in one team or plant, then roll them out to the rest of operations—and be aware that failure is possible because it's an important element of success.

Paul Miller, senior analyst at Forrester Research, told CIO Dive that when starting out, the focus shouldn't be on "I want an IoT solution." Entering with that mindset can lead to more failures than successes by overlooking key stakeholders and goals.

John Miller, director of the Manufacturers Alliance for Productivity and Innovation (MAPI) Council, told CIO Dive that attaching sensors to machines or across a plant doesn't serve the business, but a strategy that identifies where the problem is, how to solve it, and what's needed can distinguish a factory full of devices from an IoT environment that serves the business. IoT is an answer, but it must work alongside other capabilities, especially data analytics.

Companies just starting out can partner with organizations like MAPI or the IIC to connect with companies, experts, and resources that have already tried it. For example, the IIC offers testbeds to help companies develop new industrial internet technologies.

Business model disruption

Migrating to the industrial internet isn't as straightforward as swapping out servers. Many industrial players are used to investing in a few pieces of equipment that run for decades, but now they also have to focus on software and digital services, Paul Miller said.

This is shifting the sales model from a few million-dollar hardware pieces to a large number of software and service applications: it may be less "sexy," but it's more aligned with the digital economy. For vendors, success depends on a combination of innovation, breadth of capabilities, and a broad partner ecosystem, Paul Miller said.

Interoperability between systems is increasingly a priority. Since few players can offer end-to-end solutions, it's crucial that companies can run solutions from different industrial internet providers in parallel.

This is shifting the sales model from a few million-dollar hardware pieces to a large number of software and service applications: it may be less "sexy," but it's more aligned with the digital economy.

—Paul Miller, Senior Analyst at Forrester

Many customers want to choose the applications they want; if different vendors' software is better than their sensor provider's, then an open system at the top will allow them to pick the tools that best fit their needs, Deron Miller said. Data and how it's processed are key, and APIs are the key tools providing that flexibility.

Companies like Siemens, Philips, or GE are trying to connect the entire product lifecycle, but the risk of overly proprietary technology looms, he said.

Business opportunities also extend to workforce opportunities. Siemens has grown its digital business by 80% over the past three years, and with the IoT integration services market expected to triple by 2025, the company expects to capture more growth in the future, CEO Joe Kaeser said in a statement provided to CIO Dive. The company plans to hire 10,000 workers over the next seven years to meet integration demand.

Biggest issues: talent and security

The talent war is hitting the industrial sector hard. Even with the best tools and technologies, true transformation and progress may not happen unless companies have teams that can understand and apply the data.

To win sought-after cybersecurity, data analytics, and AI experts, industry must fight the perception of being an "unsexy" space, John Miller said. With many plants located in rural areas, attracting talent from urban areas and tech hubs is a challenge.

Even with comparable pay, this is prompting many companies to reconsider incentive packages and benefits to attract and retain talent. High turnover in the field has hit companies that spend significant money training new employees, John Miller said.

The concept behind the industrial internet isn't new, but in recent years, declining computing power and hardware costs have made it possible to broadly modernize and digitally transform industries that are centuries old.

With AI and data analytics talent in high demand, filling open positions through traditional channels can quickly become difficult. Companies don't have to delay due to a lack of expertise. Soley said the best way to build expertise is to build testbeds for the relevant systems.

Following the talent issue is the security issue. The core of the industrial internet is adding more sensors and data points to improve efficiency and productivity, but more digital endpoints mean greater vulnerability to devastating attacks.

Soley said perimeter security with firewalls alone isn't enough. Understanding system robustness, control, access, and technical security is crucial to protecting expensive and widespread deployments.