A new study from Cisco predicts that the projected value of the Internet of Everything, the networked connection of people, processes, data, and things, will be $19 trillion over the next decade (2013-2022). That’s a $4.4-trillion increase to the $14.6 trillion attributed to the private sector, by adding in the public sector. Last year the IoE was supposed to have generated more than $600 billion in profits, while leaving an additional $544 billion of potential profits on the table.
Cisco CEO John Chambers was in fine form at the Consumer Electronics Show (CES) when he announced the study and IoE’s potential to make his company the number 1 IT vendor. “It will be bigger than anything that’s ever been done in high tech.”
IoE could boost global corporate profits by 21% by 2022, according to the network giant.
To support this conclusion, Chambers said consider what is possible today. In 1984 there were 1,000 devices connected to the Internet, by 2015 mobile devices will be greater than the total population and by 2020, 50 billion objects will be connected to the Internet. This year 10 billion devices will have 77 billion mobile apps downloaded.
“This is not about technology at all. It’s about how we change people’s lives.”
With billions of users, tens of billions of networked objects, hundreds of billions of downloads and trillions of dollars, it’s easy to understand why Cisco and the rest of the networking world are excited about the future of IoE. According to the latest study, which focused on the public sector and a number of real-world examples, IoE can help governments create value by saving money, improving employee productivity, generating new revenue (without raising taxes) and enhancing citizen benefits.
- smart buildings can generate $100B by lowering operating costs by reducing energy consumption through the integration of HVAC and other systems;
- gas monitoring could generate $69B by reducing meter-reading costs and increasing the accuracy of readings for citizens and municipal utility agencies;
- smart parking could create $41B by providing real-time visibility into the availability of parking spaces across a city; residents can identify and reserve the closest available space, traffic wardens can identify non-compliant usage, and municipalities can introduce demand-based pricing;
- water management could generate $39B by connecting the household water meter over an IP network to provide remote information on use and status; and,
- road pricing could create $18Bin new revenues by implementing automatic payments as vehicles enter busy zones of cities, improving traffic conditions and raising revenues.
Other potential government IoE benefits include:
- state agencies have the potential to realize $682 Billion in value by applying IoE solutions to processes like bridge maintenance, offender transport, chronic disease management, connected learning and wildfire suppression;
- non-defense federal agencies could capture $472 Billion through IoE solutions to improve disaster response, fleet management, cybersecurity and many other areas;
- defense forces globally can improve the effectiveness of military missions through secure connection and information sharing among soldiers, bases, vehicles and battlefield assets. Improved connections among defense forces globally could generate $1.5 Trillion in value and measurably enhance soldier safety; and,
- increased use of telework solutions could create an estimated $125 Billion in value by lowering real-estate, printing and other costs.
IoE shouldn’t be confused with IoT, the Internet of Things, i.e. sensors, machines and possibly even Skynet and its pet Terminators.
According to various research companies, M2M (machine-to-machine) connections will top 4 billion by 2017, up from almost 1.4 billion in 2012, with M2M services contributing anywhere from $31 billion to $290 billion at a CAGR of 30.1% from 2012 to 2017. At the start of October IDC predicted that the Internet of Things installed base will be approximately 212 billion things by the end of 2020, including 30.1 billion connected (autonomous) things. The IoT component of the IoE will generate revenues of $8.9 trillion by 2020 on components, processes, and supporting IT and connectivity, up from $4.8 trillion in 2012.
Whether its $19 trillion for the IoE, or just $9 trillion for the IoT subset, the bottom line is that change is coming, fast, and networks will need to support this Brave New World.