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Understanding the Value of the Internet of Everything

BY: JOSEPH BRADLEY 04 JANUARY 2014

We are living in an age of unprecedented technological transformation, one that stands to eclipse even the first Internet boom.

This next wave of change is being driven by a massive upsurge in connectivity, from 10 billion connected “things” today to 50 billion in 2020. The world may seem connected already. But, consider that only 1 percent of the objects around you are endowed with smart connectivity. For now, that is — the situation is changing fast. Your car, your refrigerator, your parking space, the bridge you drive over, the shelves at the local retailer and the supply chain that feeds them — all of these “dark assets” are being “lit up” with smart connectivity, altering our lives in profound ways.
Cisco calls this the Internet of Everything (IoE). We define IoE as the intelligent connection of people, process, data and things. And, of course, the “people” element is paramount, since the whole point of technology is to create a better life experience for everyone.
 
For enterprises, IoE represents a vast opportunity. Cisco estimates that the Value at Stake from IoE is a staggering $14.4 trillion for the private sector over the next 10 years.
 
Let’s take a closer look at the four elements of the IoE:
 

• People: The ways in which we connect to the Internet have changed in the last three decades — from terminals to desktop computers and a variety of mobile devices, including laptops, smartphones and tablets. But that’s nothing compared to the wave of transformation we are now entering. Google Glass and smart watches are just the beginning of an array of wearable technologies that will radically change the ways we consume and share information. In the next few years, these capabilities will grow profoundly.

• Process: Connecting processes is not something most people think about but already the Internet has revolutionized the ways businesses manage their supply chains and the ways consumers shop—to name just two. As we continue to “instrument” our world, we’ll have visibility into processes we could never see before, providing opportunities to make these processes faster, simpler and more efficient.

• Data: The world is awash in data. By the end of 2013, we will create more new information every 10 minutes that we did in all of human history up to 2008—most of it rich media. Not only is the volume of data increasing exponentially, the data itself is becoming richer and new types of devices that never existed before are starting to create even more data—for example, sensors on food to alert you before it spoils. Big Data analytics are helping us make sense of this avalanche of information—identifying and combining relevant data points in ways that reveal new insights and enable better decision making.

• Things: We predict that 9.4 percent of physical objects are still unconnected, highlighting the vast potential of connecting the unconnected. But real growth will not be in the things we expect to be connected, such as computers, phones and tablets; the exciting part of this growth is in the unexpected things that are just beginning to be connected. Possibilities are endless for connected cars, water-delivery systems, bridges and much, much more!

While it’s clear the Internet of Everything is built on the connections among people, process, data and things, it is not about each of these four dimensions in isolation. The power of the Internet of Everything is in the intersection of all of these elements.
 
At Cisco, we estimate that the Value at Stake from this transformation — the aforementioned $14.4 trillion for the private sector — represents an opportunity to increase global aggregate corporate profits by about 21 percent.

In other words, between 2013 and 2022, $14.4 trillion of value (net profit) will be "up for grabs" for enterprises globally — driven by IoE. IoE will both create new value and redistribute (migrate) value among winners and laggards, based on how well companies take advantage of the opportunities presented by IoE. Those that harness IoE best will reap this windfall by capturing new value created from technology innovation and/or by gaining competitive advantage and grabbing market share against other companies that are less able to transform and capitalize on the IoE market transition.

It's my hope that as we prepare for the upcoming 2014 International CES in Las Vegas, organizations and governments can better understand how the Internet of Everything is driving transformation. Challenges and opportunities presented by this change prove that the time to begin realizing IoE’s Value at Stake is now.

More information about Cisco’s vision of the Internet of Everything can be found here. We also invite you to drop by our booth at CES, hear some of our executives speak about IoE (including Chairman and CEO John Chambers) and join the conversation with #IoE, #CiscoCES, #CES2014. 

Joseph Bradley

Managing Director, Internet of Everything Practice

Cisco Consulting Services

As managing director of the Internet of Everything (IoE) Practice in the Cisco Consulting Services organization, Joseph Bradley is responsible for ensuring... More

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