The Internet of Things (IoT) is a concept where everything in the world is connected to everything else via an IP address. The IoT is no longer the dream of futurists, it's soon to become a reality in the view of networking vendor Cisco Systems.
Cisco detailed its views on the IoT during its Editors Day event, parading out a conga line of distinguished technologists and engineers to talk about the future connected world.
"The value at stake of the Internet of Everything is $14.4 trillion," Rob Lloyd, Cisco's president of Development and Sales, said during the event.
The value from the Internet of Everything (IoE) comes from multiple areas. The first is that it will improve the utilization of things and make the world more efficient, which Cisco pegs at $2.5 trillion. Lowering expenses by improving employee productivity makes up $2.5 trillion of Cisco's IoE estimate. Supply chain and logistics improvements that will reduce the cost of producing and delivering goods and services is worth $2.7 trillion for IoE. Cross selling opportunities that will deliver better customer experiences via IoE represents $3.7 trillion. Unlocking new innovation potential through research and development as well as new models for competition is worth another $3 trillion.
In Cisco's determination, the Internet of Everything has the potential to grow global corporate profits by 21 percent in aggregate by 2022.
One of the myths about the Internet of Things is that it's about giving intelligence to common household appliances like toasters and freezers. Padmasree Warrior, CTO of Cisco, argues that it's about much more.
"This isn't just about having a fun conversation about your refrigerator, coffee machine or toaster talking to you, it's about deploying sensor on a manufacturing floor that enables an enterprise to be more efficient," Warrior said. "That requires information from data to be processed, so with analytics we can drive a smarter decision making process."
Billions in R&D
Cisco isn't just talking about the potential for innovation, they are also investing heavily in it as well.
Pankaj Patel, Chief Development Officer at Cisco, said that during Cisco's fiscal 2012 the company invested $5.5 billion in research and development. He added that Cisco has over 25,000 engineers globally working on innovations. Those engineers have created over 13,000 patents in Cisco's portfolio, generating new patents at a rate of approximately 1,000 new ones each year.
Patel added that acquisitions and partnerships further extend the innovation capability of Cisco.
"Cisco's IoT strategy leverages the three successful architectures the company has today, which are data center, intelligent networks and the cloud," Patel said.