Cisco adds real-world grounding to its Internet of Everything concept
In November 2012, Cisco introduced the Internet of Everything as a concept and stamped it with a total value of approximately USD $14.4 billion through 2022. The term and the services around it all seemed a bit futuristic at the time, but with the recent release of Cisco’s IoE Value Index, the company is claiming there is approximately $1.2 trillion in value to be made in 2013 from the Internet of Everything. In fact, the company believes businesses around the world are already tapping into the value of the Internet of Everything, something they have dubbed the fourth phase of the Internet.
What is the Internet of Everything?
Actually, Cisco’s Internet of Everything is derived from the term Internet of Things, which was purportedly first used by Kevin Ashton, co-founder and former executive director of the Auto-ID Center, who claims he first used the term Internet of Things in 1999 to describe the possibilities presented by RFID technology.
Ashton’s definition of Internet of Things holds that while there is much to be learned from the data sets we created, most modern computers rely on data generated by humans, and that’s a problem. Quoting Ashton, “today’s information technology is so dependent on data originated by people that our computers know more about ideas than things.” If computers were able to gather data without human input, it would eliminate potential human error, opening up the idea that we would be able to track and count everything with incredible precision, theoretically, reducing waste and cost.
Cisco’s Internet of Everything adds the people back into the equation. The networking giant has defined its term as the connection of people, process, data and things. That is, by literally connecting everything on the planet, humans can create vast amounts of data which creates tremendous opportunity. Cisco believes we’ve only connected about one per cent of the ‘connectable’ things on the planet, so there is not only value in the data these connections create but in connecting all the pieces. In total, a value of approximately $14.4 trillion over the next 10 years by Cisco’s estimations.
So where are we?
The key is, while it all sounds very hypothetical, Cisco believes businesses around the world are currently in a position to start profiting from the Internet of Everything, to the tune of approximately $1.2 trillion in 2013. According to Cisco’s IoE Value Index businesses will see about $613 billion this year in Internet of Everything-related value, but they’ll leave the other $544 billion on the table. The question then becomes obvious: ‘how do we tap into that lost value?’
It all goes back to Ashton’s original definition. General manager of Cisco Consulting Services, Joseph Bradley, reiterated during a recent roundtable (video embedded below) that that while most people continue to focus on the ‘things’ aspect there is enormous value to be had when technology is applied not only to data, but people and processes.
Bradley laid out three points to tapping into the full value at stake. First, there needs to be investment in high quality technology infrastructure and tools. This is the actual network – the hardware and software – that will power all the data collection and number crunching. Second, businesses with the ability to adopt and follow inclusive practices will be better equipped to tap into the value. Meaning businesses where all employees are contributing to decisions at some level are better equipped to snag the value at stake. Third, there is a definite need for organizations to develop effective information management practises so that data captured through the Internet of Everything can be processed into effective decisions instead of lost.
“The idea being, if I am presented with information, but the decision is constrained, than I am not capturing all the possible value,” Bradley said.
Who is doing this today?
Here’s where things delve back into the hypothetical realm. While there are sectors that are tapping into the value of the Internet of Everything, with companies like SmartThings that are enabling new connections to be made, no company or individual is fully taking advantage of the Internet of Everything because, remember, according to Cisco only about one per cent of things are connected, and Cisco’s $14.4 trillion value at stake number is based on that one per cent.
remember, according to Cisco only about one per cent of things are connected
There is particular opportunity for countries such as Brazil, India and China, which Cisco categorizes as “pursuing” countries in its IoE Value Index. These countries are characterized by low quality IT infrastructure and lower levels of innovation than other countries such as Japan, Germany and France (categorized as Leading Countries), but show great enthusiasm for IoE capabilities and its promise. They hold the possibility of outsized gains by jumping to state-of-the-art technologies.
A great example came from Bruno Magrai, a researcher with the Center for Technology and Society at the School of Laws of the Rio de Janeiro Getúlio Vargas Foundation, who said about 40 per cent of all Brazilian exports are associated with agribusiness, a sector that already sees a lot of smart sensors being deployed to track changing weather and soil conditions, while the use of RFID tags in other verticals such as cattle farming is widespread in Brazil. But Magrai believes there is still room for further connection of areas of the channel like production, storage and transportation, where Brazil’s infrastructure is typically inefficient.
The big picture
It’s clear that as we increase the effectiveness of sensors and the ability for computers to capture data, we push closer to an era of hyper-connectedness. Cisco’s president of Development and Sales, Rob Lloyd, simplified the value message of the Internet of Everything by saying the value [Cisco] has discovered is increased as more things get connected.
Cisco’s IoE Value Index builds on 21 specific use cases from its customers and it looked at areas of asset utilization, employee productivity, supply chain efficiency, improved customer experience and innovation. It adds some much needed grounding to the concept and but we must also keep in mind that different verticals and industries will have to take different approaches to get at the full value.
Bradley gave the example of a retailer that has already invested hugely in loyalty cards, using that information to dynamically control what is displayed to a customer online or to apply discounts upon viewing an item. At the store level, it could mean equipping employees with the information needed to make better decisions about how to approach a customer.
Cisco characterizes the Internet of Everything as the fourth phase in the evolution of the Internet. Preceded by the eras of connectivity, networked economy and immersive experience, the Internet of Everything is characterized by adding the previous eras together by connecting everything.
But there is value in thinking of the Internet of Things and Cisco’s Internet of Everything as a trend that corresponds to the evolution of the Internet and accelerate as it grows in scope, because as the world keeps connecting ‘things to other things,’ it grows the amount of value available. And as Bradley pointed out, what happens to that value if companies around the world increase those connections from one per cent to two?
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