Over 14 trillion dollars, actually. In a recent white paper, Cisco visionaries Joseph Bradley, Joel Barbler, and Doug Handler say that the Internet of Things (IoT) will sooon evolve into the Internet of Everything (IoE). In the coming decade, from 2013 to 2022, the Value at Stake is estimated at $14.4 trillion. And they say now is the time to make your move.
IoE? What happened to IoT? According to Cisco, the IoT is merely the connection of things (devices) to the Internet. The IoE, on the other hand, is the connection of everything to the Internet, where “everything” includes people, process, data, and things, which they say, when combined, will turn “information into actions that create new capabilities, richer experiences, and unprecedented economic opportunity for businesses, individuals, and countries.”
OK, that sounds wonderful enough. But pretty abstract. Can we get a little more concrete? For a start, where do the 14.4 trillion dollars actually come from? What is this Value at Stake that they claim?
According to the paper, Value at Stake is the value of increased revenues and reduced costs that will accrue to businesses who move quickly to embrace the IoE and its associated technologies. They calculate that it is an “up for grabs” opportunity to increase profits by a global average of about 21 percent, coming from two sources:
1. New value based on technological innovation.
2. Acquired value through competitive advantage and increased market share.
The Power of Connection
The engine driving this huge increase in value for companies is attributed to the power of connection. The paper says that the 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.” Apparently internal factors like core competency and the knowledge found among one’s own employees is not sufficient any more. Companies in the age of the IoE will gain advantage through connecting to external sources of knowledge. We can already see this trend in motion today, and as more things get connected to the Internet, it can only increase.
As anyone with any experience with the Internet might guess, much of this hinges on the ability to provide solid security. “Robust security capabilities (both logical and physical) and privacy policies are critical enablers of the Internet of Everything Economy,” the paper states.
The growth projections for the IoE are predicated on the idea that the environment will be secure enough to reassure potential participants to sign on. Although the authors did not dwell on this point, they pointed out that security technology must be combined with sound policy and effective implementation to ensure the privacy of both companies and customers.
The bulk of the paper looks at the various sectors that will benefit most from the IoE, and one anticipated big winner is manufacturing, by bringing so-called “smart factories” on line. Close to 2 trillion dollars of value are expected to be generated within this sector alone.
Improved connectivity between machines, combined with better access to the data, are expected to increase efficiency and productivity. Rapid feedback from users and other machines will help to eliminate production bottlenecks, improve utilization of equipment, and provide hard data for system design. Even the machines themselves will benefit, as the intelligence gathered can be used to design superior, next-generation tools.
“Value in smart factories is obtained from cost-cutting, revenue growth, and better workforce collaboration,” the paper states. “With this in mind, manufacturing leaders should accelerate adoption of IoE technologies and consider initiatives that focus on improved collaboration among workers to make employees more efficient.”
Will the Internet of Things evolve into the Internet of Everything? Will people, data, process and things become well enough connected to produce billions of dollars in value in the next ten years? Judging from the way things are currently moving, we think so. It certainly make sense to plan for it.