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In the recent years, due to the proliferation of internet and smart computing there has been progress in the areas of energy, manufacturing, oil and gas, smart grid and other industrial applications. The progress in these areas is due to the advances in the emerging areas such as Big data, cloud computing, fog computing and wireless networks. The advancement in these areas has paved the way for new industrial evolution, Industry 4.0 or smart factory or Industrial internet of things (IIoT). IIoT is made up of a collection of devices, with each device being able to monitor, collect, exchange, analyze and take decisions intelligently based on the environment through proper communication channels. IIoT consists of smart solutions in the fields of electricity (smart-grid), home automation (smart-home), supply-chains (smart-automation) and agriculture (smart-agriculture). The interconnection among the different smart components of IIoT is a key requirement for IIoT systems. In this paper, a novel three-layered architecture is proposed to handle the heterogeneity of components of IIoT and thus providing a way for digital transformation of IIoT systems. The paper also provides an overview of underlying components, principles, communication standards and enabling technologies for IIoT or smart factory.