$19T: Cisco ups the ante on Internet of Everything

Cisco CEO John Chambers at CES 2014

Cisco CEO John Chambers at CES 2014

Last year, Cisco Systems made quite a buzz when it declared that the Internet of Everything (the networking giant’s preferred name for the Internet of Things concept of connected systems and devices) would be worth $14.4 trillion over the next ten years. It then called on its partners to help make that happen, and to pick up the opportunity.

If anyone thought Cisco might dial down the volume on its Internet of Everything message in 2014, that idea was shattered early, as CEO John Chambers used a good portion of his CES 2014 presentation to discuss the IoE phenomenon. IoE, he said, is now going to worth $19 trillion in value delivered and saved over the next decade, and the move towards connecting everything via IP could bump Cisco’s profits by 21 per cent over that same timeframe.

By our math, that means over the course of less than a year, Cisco managed to find an additional nearly $5 trillion of value to assign to the Internet of Things. Where’d that extra money come from? That’s simple. According to Cisco, its research last year included $14.4 trillion in money made or saved via Internet of Things by private sector companies, taking into account 21 different use cases for the technology. Now its research indicated that the public sector worldwide will make or save another $4.6 trillion over the next ten years using the Internet of Everything, including 40 use cases.

It stressed that the Internet of Everything, particularly in the public sector, is not a futures gamble. It’s something that many governments of various sizes are building on today.

“We truly believe 2014 is going to be an inflection point for the Internet of Everything,” said Wim Elfrink, executive vice president of industry solutions and chief globalization officer at Cisco.

The networking giant has a friend in the city of Barcelona, one of its favourite case studies for smart and connected cities. Manel Sanroma, CIO of Barcelona City Council, said that the Internet has changed our lives and our industries, but it has not changed our cities. Yet. He and his team are working on changing that. The city has undertaken a huge number of Internet of Everything projects over recent years, including transportation, water management and water management. It’s gone as far as rolling out a converged citywide WiFi network to support all of these projects, and it estimates its efforts over the last few years have been worth $3 billion.

“It’s the Internet mingling with the city,” Sanroma said. “It’s the integration of the Internet of Everything into the lives of citizens. This is a huge opportunity for our city and for cities all over the world.”

In all, he attributes 44,000 new jobs and some 1,500 new startup companies in the Barcelona area to the smart city efforts. And specific efforts are seeing significant results. He values the city’s smart water management at $58 million, smart parking at $53 million, smart lighting at $47 million, and smart buses at $28 million. And while it’s been a while coming for Barcelona, the work of that city and other pioneers will help ease the way for cities in the near future, as best practices start to truly bloom.

“For us, it’s taken ten years. But now for many cities, they’ll be able to get there in a year or less,” he said.

The scale may not quite be the same, but the city of Midland, Texas also has a find Internet of Everything story to tell. Since 2009, the city has been building its own traffic management system, connecting traffic lights around the city. 180 wireless access points connecting 199 networked traffic signals and 70 pedestrian walk signals have helped the city of nearly 114,000 modernize their infrastructure. Gary Saunders, transportation manager for Midland, said that as a result of the project – the largest in the world of its kind at the moment – vehicles traveling within the city make 18 per cent fewer stops for red lights, and see a 27 per cent decrease in delays. All that adds up to a ten per cent drop in fuel consumption as a result of the new systems. And adding to that, the Saunders said the city is saving $1.2 million per year in reduced number of manual interventions to fix or optimize traffic signal networks.

The examples of Barcelona and Midland are just a small part of the $4.6 trillion that Cisco attributes to the Internet of Everything in the public sector, but it does support the company’s belief that there are real opportunities, here and now, for Cisco and its partners.  And the case studies also back up another main point of Chambers’ presentation from CES.

“This is not about technology at all. It’s about how it changes people’s lives forever,” Chambers said in his keynote.