Cisco pegs potential profit value for Internet of Everything at $14.4 trillion

Summary:Cisco is projecting that the Internet of Everything has the potential to grow global corporate profits by 21 percent in aggregate by 2022.

SAN JOSE -- The value at stake for the Internet of Everything is $14.4 trillion that businesses and customers can capture in the next decade, according to Cisco.

In other terms, Cisco is projecting that the Internet of Everything has the potential to grow global corporate profits by 21 percent in aggregate by 2022.

See also:
Tapping M2M: The Internet of Things

"The opportunity here -- and the challenge -- is the next level of scale," said Rob Lloyd, president of sales and development at Cisco, while speaking at Cisco's second annual Editors Conference at the company's Silicon Valley headquarters on Wednesday morning.

The focus of the media presentation was to draw back the curtain on some of the networking giant's pilot programs for smart and connected communities, energy, and industries that have been in development for at least the last five years.

In the last 30 years -- and Lloyd declared for his entire career -- IT has been based on moving apps into a server environment. Now, he continued, that world has changed to where apps are being delivered in mobile apps and video environment, as seen through the proliferation of iOS and Android, especially.

According to Cisco, two-thirds of the world's mobile data traffic will be video by 2017.

"The network needs to be much more orchestrated rather than just being configurable," Warrior added.

Lloyd clarified that for Cisco, the Internet of Things makes up the Internet of Everything -- the former of which he defined the Internet of Things as the sensors, the actuators, RFID tags, consumer devices, and industrial equipment that will converge in the world of IT.

However, Lloyd cited that 99 percent of electronics in the world today still aren't connected to the Internet. The next step, therefore, is the Internet of Everything in which those devices will be brought online.

"If you look at those business imperatives and think of them in the context of those major technology trends, there is an entirely new role of IT coming out," Lloyd said. "The role of the network is critical to unlock these major market trends."

For the Internet of Everything, Lloyd said that means taking people, process, data -- all the things done so far in connecting the first 10 billion connected devices -- to unlock capabilities we haven't seen yet.

So where are those opportunities? Based on internal research, Cisco believes that there are at least seven verticals that will move more quickly, starting with manufacturing followed by the public sector, energy/utilities, healthcare, finance/insurance, transportation, and wholesale/distribution.

But Lloyd stipulated that the Internet of Everything will be driven by business funding -- not IT funding -- as we embrace consumer devices (a.k.a. BYOD),  the cloud, and data analytics to drive insights.

Cisco's chief strategy and technical officer Padmasree Warrior explained further, asserting that the next decade of work will be about making all of these processes more efficient.

For the network, Warrior outlined some of the technology implications, asserting that networks need to be more programmable, automated, dynamic, aware, agile, and secure in the face of a growing "app-based economy."

"The network needs to be much more orchestrated rather than just being configurable," Warrior added.

Warrior also reflected that the discussion -- at least around big data -- is finally moving from data collection to data usage.

Looking forward at Cisco's business strategy for at least the next three to five years, Warrior said that Open Stack and open source technology will be "critical enablers," also highlighting partnerships with Citrix and Red Hat to move up the stack, improve efficiency for its applications, and provide more business value.

Cisco chief development officer Pankaj Patel described how the networking giant is attempting to innovate its products to keep up with its ambitious predictions for the Internet of Everything movement.

Patel touted that Cisco spent approximately $5.5 billion on research and development during the 2012 fiscal year alone, describing this as "huge" compared to some of its competitors.

He also highlighted roughly 70,000 partnerships, more than 160 acquisitions, and over 13,000 patents registered as more evidence supporting Cisco's dedication to the Internet of Everything.

One project that Cisco is currently working on is Seamless Cloud, which is touted to be a multi-faced, global framework that enables customers to evolve existing infrastructures for the demands of the Internet of Everything. Network resources can be connected, appear as one entity, and be programmed to specific devices depending on demand and performance.

Underneath the hood, Cisco's Seamless Cloud consists of a new set of APIs designed to create a graphed abstraction model of all network components as well as the Cisco ONE toolkit for programmatic access to network resources to optimally configure IT resources. Cisco is using OpenStack to enable global collaboration among developers with the intention to produce "the ubiquitous open source cloud computing platform."

Topics: Networking, Cisco, Enterprise 2.0, Enterprise Software, Unified Comms

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

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