The document discusses the potential value of connecting the currently unconnected "things" through the Internet of Everything (IoE). It finds that while only 10 billion out of 1.5 trillion "things" are currently connected, connecting the unconnected could create $14.4 trillion in value for businesses over the next decade. Specifically, two-thirds of this value would come from industry-specific use cases while one-third would come from cross-industry use cases. The document provides examples of potential value across different industries and geographies to demonstrate how companies could benefit from embracing IoE.

1. The Internet of
Everything (IoE)
Value at Stake in the IoE Economy
@CiscoIBSG For more information: http://cs.co/IoE_IBSG
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2. 99.4% With only 10B of 1.5T “things” connected globally,
of “things” are there is vast potential in connecting the unconnected
unconnected
96.5% The consumer segment accounts for the vast majority of
of things are
“things” in the world
consumer objects
64% On average, there are about 200 “things” per person in the
of things are in world; nearly 2/3 of the total number of “things” are in
developed developed countries, although these countries account for
economies only 14% of the global population
Source: Cisco IBSG, 2013
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3. Internet of
Mobility / BYOD
Fixed Computing Internet of Things Everything
(the device goes
(you go to the device) (age of the device) (people, process, data,
with you)
things)
50B
10B
200M
1995 2000 2013 2020
Source: Cisco IBSG, 2013
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4. IoE brings together people, process, data, and things to make networked
connections more relevant and valuable than ever before—turning information into
actions that create new capabilities, richer experiences, and unprecedented
economic opportunity for businesses, individuals, and countries.
Source: Cisco IBSG, 2013
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5. The Internet of Everything builds on the foundation of the Internet of Things by
adding network intelligence and security that allows
convergence, orchestration, and visibility across previously disparate systems
Internet of Things Internet of Everything
Intelligence
Convergence
Visibility
Security
Source: Cisco IBSG, 2013
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6. The potential bottom-line value (higher revenues and lower
costs) that can be created or will migrate among companies
and industries based on their ability to harness IoE over the
next decade (2013-2022)
Includes
• Shifts of benefits among competing firms in an industry
• Shifts of benefits among different industries
• New-to-the-world revenue growth from innovation
• Cost savings from more efficient processes
• Allowances for implementation costs
Does not include
• Extent of losses at firms that don’t transform
• Consumer or government value creation (private-sector focus)
• Social benefits
• Value estimates for reduced risk of operations
Source: Cisco IBSG, 2013
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7. $14.4 trillion
$9.5 trillion $4.9 trillion
From industry-specific From cross-industry
use cases (66%): use cases (34%):
smart grid, connected future of work
commercial vehicles, etc. (telecommuting), travel
avoidance, etc.
IoE has the potential to grow global corporate profits by
~21% in aggregate by 2022
Source: Cisco IBSG, 2013
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8. • SG&A and CoGS reduction from
Asset utilization: improved business process execution
$2.5T • Improved capital efficiency
Employee productivity: • Improved labor efficiency
IoE net $2.5T • Fewer or more productive man-hours
Value at
Stake Supply-chain / logistics • Improved process efficiency
efficiency: $2.7T • Reduced waste in supply chain
(2013-2022
10-year • Improved customer lifetime value
NPV)* Improved customer
• Additional market share (more
experience: $3.7T
customers)
* Net present value
• Improved RD&E speed, reduced TTM
Innovation: $3.0T • New business models and new sources
of revenue
Source: Cisco IBSG, 2013
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9. Value at Stake
(in $ billions)
M2M $6,372 45%
M2P or P2M $3,501
55%
P2P $4,519
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000
While machine-to-machine connections are increasingly
important, person-to-person and person-to-machine still represent the
majority of the Value at Stake in the IoE Economy.
Source: Cisco IBSG, 2013
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10. 50.0%
45.0%
Japan
40.0% ($0.7T)
United States
(Value at Stake / industry size)
($4.6T)
35.0%
Degree of impact
30.0% Canada
($0.4T)
Western and
25.0% Eastern Europe
($4.3T)
20.0%
15.0% China
($1.8T)
10.0%
Spheres sized by
5.0% amount of Value at Stake Rest of world
($2.6T)
0.0%
$0 $5,000 $10,000 $15,000 $20,000 $25,000
Geography size (value added $B)
Source: Cisco IBSG, 2013
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11. 100.0%
90.0%
Information
80.0% services (9%) Spheres sized by
(Value at Stake / industry size)
70.0% amount of Value at Stake
Degree of impact
60.0%
Manufacturing
Administration
50.0% Retail trade (27%)
(11%)
40.0%
30.0% Education Finance and insurance (9%)
Company Healthcare
20.0% management
Professional services
Wholesale
10.0%
0.0%
$0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000
Source: Cisco IBSG, 2013
Industry size (value added $B) Sample Size = 807
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12. 2013 2022 Greater reach and scaling
Current state Potential with IoE of professors; new
Scale professors and best business models: scale
Physical attendance with
quality of instruction — any globally without physical
professors
device, anywhere
venue constraints; reduced
Scale content: recordable textbook costs
One-time instruction in and replicable
one location instruction, anytime, any
venue
Learn at your own pace; focus
Static, linear content with
on relevant content only;
low control
richer, interactive content
University and library Greater availability
hours only (your time, catch up)
User searches for content
Content proactively offered
(pull); costly
(push); free content; ability
textbooks, “one size fits
to customize curriculum
all”
Source: Cisco IBSG, 2013
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13. • Global survey of ~8,000 decision makers in the world’s
12 largest economies
• Timing: Beginning of May
• Goal: show how well companies are taking advantage of IoE as
well as where they can improve in capturing IoE Value at Stake
• Measure quality of information that flows across IoE networks
• Determine gap between Value at Stake and actual value of IoE
that companies are capturing
• Connectedness score will allow executives to make better
decisions to capture more value by increasing
innovation, productivity, efficiency, and customer experience
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14. • 99.4% of the “things” in the world are still unconnected
• The “Internet of Everything” (IoE) connects the unconnected:
people, process, data, and things
• The value of these connections is more important than the number of
“things” that are connected
• $14.4 trillion in “Value at Stake” can be created or will migrate among
companies and industries based on their ability to harness IoE over the
next decade (2013-2022)
• Real-world use cases demonstrate the potential value of IoE for
companies and industries
• Because the stakes are high — over 10 years, companies stand to lose
more than a year of profits if they do not embrace IoE — the time to act
is now
Source: Cisco IBSG, 2013
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15. Thank you.
@CiscoIBSG For more information: http://cs.co/IoE_IBSG