‘Internet of Everything’ (IOE) to generate $14.4 trillion in value through 2020 … entrepreneurs and corporates need to move fast!

‘Internet of Everything’ (IOE) to generate $14.4 trillion in value through 2020 … entrepreneurs and corporates need to move fast!

Article: 'Internet of Everything' to generate $14.4 trillion in value through 2020, predicts Cisco, Enterprises must transform to tap into business opportunities, February 25, 2013 | By Fred Donovan


  • "Cisco (Nasdaq: CSCO) predicts the "Internet of Everything" will generate $14.4 trillion in value through 2020, creating a significant business opportunity over the next decade."
  • "Businesses must transform themselves to take advantage of the potential profits and cost savings from the Internet of Everything, which is the interconnection of people, processes, machines and objects, Cisco said in a new report."
  • The main factors driving this development are $2.5 trillion from reduced costs through asset utilization, $2.5 trillion in improved employee productivity, $2.7 trillion for eliminated waste in supply chain and logistics, $3.7 trillion in improved customer experience and $3 trillion in reduced time-to-market through innovation.
  • Cisco identified many potential uses for the Internet of Everything, including the smart grid, smart buildings, connected healthcare and patient monitoring, smart factories, connected private education, connected commercial vehicles, connected marketing and advertising and connected games and entertainment.
  • To capitalize on the potential uses, robust security capabilities will need to be developed and privacy policies put in place. Otherwise, the disclosure of confidential corporate data and/or personal information might discourage the adoption of the Internet of Everything, the report warned.
  • Cisco has laid out a bold vision for the future. While $14.4 trillion in value might seem like an unrealistic prediction, there is no question that there will be ample business opportunities for enterprises from the interconnection of people, processes, data, machines and objects in the coming decade.
  • "All of this leads to a world of intuitive connections between people, processes, data and things on the network--the Internet of Everything. What does this mean? It means the trends we've been discussing over the past several years are all having a cumulative effect, and putting new demands on IT," Warrior wrote in a Huffington Post article.
  • The potential is immense, as 99.4 percent of physical objects that may be part of the Internet of Everything in the future are not currently connected, the report noted.
  • "The onus is on IT to make applications available anytime, anywhere for employees and allow businesses to move with greater agility and speed. The goal is to move to a world of anything delivered 'as a service' from the cloud," she added.
  • More than 50 billion devices will be connected by 2020 and there will be a 44-fold increase in data creation by then, 34 percent of that in the cloud, according to Padmasree Warrior, chief technology officer with Cisco.
  • "As the things that are connected to the Internet become smarter and more capable, much of the computing, analytics, and decision making will take place at the 'edge' of the Internet. This shift from 'dumb' data to 'smart' information at the point of decision, as well as at the core, will allow the Internet to be more helpful, relevant, and secure," he wrote in a recent blog.

Embracing the Internet of Everything To Capture Your Share of $14.4 Trillion
More Relevant, Valuable Connections Will Improve Innovation, Productivity, Efficiency & Customer Experience, Joseph Bradley Joel Barbier and Doug Handler, Cisco, February 2013

  • To get the most value from IoE, business leaders should begin transforming their organizations based on key learnings from use cases that make up the majority of IoE’s Value at Stake. These use cases include smart grid, smart buildings, connected healthcare and patient monitoring, smart factories, connected private education, connected commercial (ground) vehicles, connected marketing and advertising, and connected gaming and entertainment, among others.
  • Robust security capabilities (both logical and physical) and privacy policies are critical enablers of the Internet of Everything Economy. The IoE Value at Stake projections are based on increasingly broad adoption of IoE by private-sector companies over the next decade. This growth could be inhibited if technology-driven security capabilities are not combined with policies and processes designed to protect the privacy of both company and customer information.
  • IoE is further being driven by several factors. First, powerful technology trends — including the dramatic increase in processing power, storage, and bandwidth at ever-lower costs (Moore’s law still at work); the rapid growth of cloud, social media, and mobile computing; the ability to analyze Big Data and turn it into actionable information; and an improved ability to combine technologies (both hardware and software) in more powerful ways — make it possible to realize more value from connectedness.
  • Second, barriers to connectedness continue to drop. For example, IPv6 overcomes the IPv4 limit by allowing for 340,282,366,920,938,463,463,374,607,431,768,211,456 more people, processes, data, and things to be connected to the Internet. Amazingly, IPv6 creates enough address capacity for every star in the known universe to have 4.8 trillion addresses.
  • Third, form factors continue to shrink. Today, a computer the size of a grain of salt (1x1x1 mm) includes a solar cell, thin-film battery, memory, pressure sensor, and wireless radio and antenna. Cameras the size of a grain of salt (1x1x1 mm) now have 250x250-pixel resolution. And, sensors the size of a speck of dust (0.05x0.005 mm) detect and communicate temperature, pressure, and movement. These developments are important because, in the future, things connected to the Internet may be hard for the human eye to even see.
  • Finally, IoE reflects the reality that business value creation has shifted to the power of connections and, more specifically, to the ability to create intelligence from those connections. Companies can no longer rely solely on internal core competencies and the knowledge of their employees; instead, they need to capture intelligence faster, from many external sources. This will occur through connections enabled by the Internet of Everything.
  • Value at Stake, according to Cisco, is the potential bottom-line value (higher revenues and lower costs) that can be created or will migrate among companies and industries based on their ability to harness IoE. Cisco predicts that the IoE Value at Stake will be $14.4 trillion for companies and industries worldwide in the next decade (see Figure 2).5 More specifically, over the next 10 years, the Value at Stake represents an opportunity to increase global corporate profits by about 21 percent.6
  • 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 value in either of two ways (see “Use Case” section for specific examples):
  • By capturing new value created from technology innovation
  • By gaining competitive advantage and grabbing market share against other companies less able to transform and capitalize on the IoE market transition7
  • From an industry perspective, four out of 18 industries make up more than half the total Value at Stake (see Figure 5).10 The amount includes manufacturing at 27 percent, retail trade at 11 percent, information services at 9 percent, and finance and insurance, also at 9 percent. The remaining 14 industries range between 7 percent and 1 percent.
  • Challenges abound for today’s business leaders. The rapid pace of change creates confusion and misinformation, which often leads to poor decision making or, worse, inaction. When combined with price transparency and global supply chains, many of the same technology trends that are ushering in the IoE era are also enabling new entrants to become viable threats in just weeks and months rather than years.
  • In this environment, winners and losers are determined faster than ever before. With $14.4 trillion Value at Stake, IoE presents an important opportunity to increase market share, gain competitive advantage, strengthen and grow your customer base, and increase profitability. And because the stakes are high — over 10 years, companies stand to lose more than a year of profits if they do not embrace IoE — the time to act is now.

The original report can be downloaded from here.