For decades, it has been the aspiration of many jihadist groups to secure and govern their own territory. The few groups actually proclaiming to have done so did it most often in the form of an Islamic emirate. However, the resurrection of the early Islamic empire, the caliphate, remained a distant vision. Even al-Qa’ida considered itself only a precursor for the eventual formation of such a caliphate in a utopian future. The Islamic State (IS) on the other hand felt no such constraints. Following its successes in 2013/2014, the terror group believed it had at its command the necessary manpower, money, and territory to make a plausible claim for an Islamic state. Against conventional wisdom, this has so far not redounded to IS’ detriment, but rather provided the terror group with a range of benefits that form crucial elements of its strategy. In the second part of this series of articles, the author argues that the caliphate is the second key factor for the success of IS.