In this paper, the most recent progress as well as challenges of distributed optical fiber sensing (DOFS) in industrial applications is discussed. Compared to the vast market of sensors used to measure strain or temperature, the success of distributed optical fiber sensing (DOFS) at the industrial level is very limited, at best. One of the reasons for this lack of the wider acceptance is the mismatch between the commercially available systems and actual industrial requirements, especially for the spatial resolution and precision. These requirements are organized and clarified in the paper. It also describes the hybrid Brillouin-Rayleigh system, which exhibits capabilities surpassing those of strain gauges. The principles of the system are illustrated considering the fiber calibration methodology. Formulas required for determining strain, temperature, and hydro-pressure are derived and discussed. Finally, the examples of applications are presented.