Cisco has come up with its own - $14.4 trillion, the amount of incremental value it believes can be generated over the next decade from harnessing a pervasive network where absolutely everything is connected to the web.
Cisco's figure for the value generated by the internet of things would equate to a 21% rise in global corporate profits by 2022. “The opportunity here - and the challenge - is the next level of scale,” said Rob Lloyd, president of sales and development at Cisco, speaking at the firm's annual editors' conference at its headquarters. And of course, this potential will not be reached without some key technical breakthroughs – notably more programmable networks – which Cisco aims to lead.
Massive figures like this are more to do with publicity and general impact than accuracy. However, Cisco did break down its prediction a little. Its $14.4 trillion will come from five main changes - $2.5 trillion from better asset usage; the same amount again from increased employee productivity; $2.7 trillion from transformed supply chain logistics; $3.7 trillion resulting from better customer experience; and $3 trillion from entirely new innovations enabled by the IoT.
The first step towards this explosion has been the shift of applications and data from servers to mobile devices and video, but Lloyd pointed out that 99% of electronics in the world today are still not connected to the internet.
When this massive base is brought online, the internet of things will result, involving all kinds of consumer devices and appliances, plus industrial equipment, cars, sensors, RFID tags and even humans with embedded wireless.
Cisco's internal research suggests that the first vertical markets to drive this growth – and start to reap the profits – will be manufacturing, followed by public sector, energy, healthcare, financial services, transport and wholesale/distribution.
“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[ing] these major market trends.” He believes a major difference from the computer age will be that the internet of things will be funded by business units, not by IT budgets, as all commercial functions become reliant on analytics, mobile devices and the cloud, and no longer regard these as a separate “technology” unit.
But there will be implications for the IT function of course, notably its convergence with networking activities. Cisco's chief strategy and technical officer, Padmasree Warrior, said net-works would have to become more programmable, automated, dynamic, agile, and secure to cope with billions of devices and an app-based economy – to be “orchestrated rather than just being configurable.”