The World is Changing… again… The only constant is changeOver the past six years business demands for productivity, increasing globalization and the consumerization of IT have changed dramaticallyThere has been a rapid evolution in the technology responses implemented to meet business demands. And all these changes can be summed up in five major technology transitions (Mobility with Video, Cloud, all leading to a new breed of applications, and the Internet of Things with machine to machine connections and automated contextual decision making, Big Data & AnalyticsWhat does this all mean? And how does it affect business today?For organizations of all sizes, this means new growth opportunities with advances in productivityCompanies and organizations are being faced with the demand for technology as a service inside the Enterprise. Employees want the ability to access any application, any time, anywhere – from the device of their choice. It means employees are demanding the same technology experience expectations in their workplace that they have in their personal lives (Amazon.com, Online banking, etc.)And the emergence of new business modelsIncreasing expectations from users around the world with security, regulation and compliance requirementsTechnology responses start with Technology Architectures that enable security, flexibility, speed and scale for the business Together, this changing world results in increasing expectations of IT to accommodate the technology transitions while dealing with the business implications that we are all faced with
7.1B People, 5B cell phones, 2B broadband connections, 1BFacebook users; 500M on Twitter50B devices by 2020 (15B today and 1,000 in 1984)15,000 iPadsand 45,000 Smartphones at Cisco 20B mobile app downloads in 2012; 40B since 2008400,000 enterprise mobile app downloads at Cisco in 2012Average enterprise user downloads 7 "enterprise" apps – at a medium size company with 5,000 people they have 21,000 app downloadsMore than 160 million lines of code in Cisco network operating systems, 710 APIsMore than 6,800 unique software features (1,000+ new features every year)7,000 of 9,300 patents are software-related13 out of 14 recent corporate acquisitions have been software companies80% of Cisco R&D engineers focus on softwareWith each iteration of our forecast, there are literally volumes data and factoids that can be extracted from our research. There’s definitely a lot of information, but here are some of the key takeaways from our discussion today:From a top-line growth perspective, by 2017, annual global mobile data traffic will reach 11.2 exabytes per month (or a run rate of 134 exabytes annually).In terms of year-over year growth, global mobile data traffic grew 70% in 2012.Global mobile network speed is a key traffic driver―it doubled in 2012 and will increase 7-fold by 2017.Mobile video is still the top mobile application―by 2017, more than 66% of the world’s mobile data traffic will be video. The introduction and adoption of mobile devices is outpacing new mobile subscriber and even global population growth. By 2017, there will be more than one mobile connected device (10.3B) for nearly every member of the world’s population (7.6B).
Important to step back and define the Internet of EverythingPeople + Process + Data (the “Internet” as we know it today) + Things (the“Internet of Things”) all joining the Internet creating Intelligent ConnectionsCiscodefinition: “The Internet of Everything” brings together people, processes, data, and thingsto 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.”And it’s really the value of these connections that are more important than the number of “things” that are connectedIoT vs. IoE?:IoT = now / IoE = futureIoT = things only… big current opportunity… one component of IoE / IoE = people + processes + data + things IoE = connections… connections matter most… focusing on exact number of “things” misses big picture… how many things matters less… potential connections between everything matter more… outcomes of connections matter most (better decisions, new opportunities, richer experiences, improved quality of life)IoE builds on foundation of IoT, adding network intelligence … allows convergence, orchestration, visibility across previously disparate systems.
Value at Stake Defined = 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 capture the Internet of Everything over the next decade (2013-2022).The Internet of Everything creates $14.4 trillion in Value at Stake—the combination of increased revenues and lower costs that is created or will migrate among companies and industries over the next 10 years. By comparison, current annual corporate profits represent a value of $6.8 trillion globally, so we are talking about 2.1X annual corporate profits worldwide. The Value at Stake is combination of both benefits derived within one vertical industry as well as benefits derived horizontally across industries.$9.5T (66% of total value at stake) derived from specific vertical industries (e.g. Smart Grid, Connected Healthcare)$4.9T (34%) derived horizontally across industries (e.g. knowledge-worker productivity, travel avoidanceIoEhas the potential to grow global corporate profits by an estimated % (about 2 percent a year) in aggregate by 2022.From another perspective, companies worldwide could lose over a year of total profits if they do not start harnessing IoE.The five main factors that fuel IoE Value at Stake are: (1) Asset Utilization (reduced costs) of $2.5 trillionSG&A and COGS reduction from improved business process executionImproved capital efficiency(2) Employee productivity (greater labor efficiencies) of $2.5 trillionImproved labor efficiencyFewer or more productive man hours(3) Supply chain and logistics (eliminating waste) of $2.7 trillionImproved process efficiencyReduced waste in supply chain(4) Customer Experience (addition of more customers) of $3.7 trillionImproved customer lifetime valueAddl. market share (more customers)(5) Innovation (reducing time to market) of $3.0 trillion. Improve RD&E speed, reduce TTMCreate new business models and new sources of revenueTo get the most value from IoE… business leaders should begin transforming their organizations based on key learning's from use cases that make up the majority of IoE’s value at Stake
IoT focused prioritization of IoT verticals-Leveraged our database of IoT use cases and original scoring based on 4 filters (IoToppty size, market readiness, Cisco fit, and ecosystem/insertion point attractiveness) -Mapped IoT use cases against 'primary' verticals (similar to verticals included in IoT taxonomy) -Prioritized IoT verticals based on scoring, with value at stake estimates ranged due to use cases being applicable to multiple verticals -Identified top 6 IoT verticals with 2 horizontals (SPs as delivery channel, IT enablers including RE, BYOD, Collab)
Cisco Pilots Developed Over the Last 5+ YearsWe Started On Incubation Concepts 5+ Years Ago5+ Years Ago S+CC, 4+ SmartGrid, 2+ Connected Industries…The point here is that there is sufficient opportunity for the entire industry across a number of segments and value-chains (these being select only)Value at Stake / Value in Use: defined as the value creation potential for customers (by adopting the IoT solution/use case) this is global for private and public sector for IoTSource: Cisco, 2013 (in conjunction with McKinsey)We have 6 business architectures… would like to speak about 3 today:S+CC:$1.1T Value at Stake Education, Energy, Traffic, Entertainment, Safety, Healthcare, Real Estate, Gov’t9 Iconic Projects / 100s ProjectsToronto, Songdo, Rio, Skolkovo, London, Sydney, China, Barcelona, etc.Connected Energy: $670B Value at StakeBC Hydro… Vancouver 1,700 poletop routers 1.6M smart meters Router talks to any intelligent end point. Electric meters, gas / waterConnected Industry: $1.4T Value at StakeIncludes: Connected VehiclesDefenseIndustrial/M2MAutomation
Sources: Gartner, Cisco VNI, Cisco IBSGAs these major trends occur, and IT budgets move into different lines of business, we’re seeing resulting differentials that need to be addressedEnterprise IT spend is increasing; not by much, but if you look at the distributed spend, companies have consistently been spending more but trying to manage increasing user demands and customized needs and applications for lines of businessBy 2016, global IP traffic will reach 1.3 zettabytes annually (110 exabytes per month); growing 4-fold from 2011 to 2016And user expectations continue to grow as well with the proliferation of devices in the workplace and the “anywhere, anytime” demandThis creates a differential that results in an experience differential – people are looking for the same experience in the workplace that they are achieving at home or in their personal livesAdd to the complexity of the matter, the emergence of cloud – public, private – all providing your users and companies with the applications and services they need to keep your business competitive And all the As A Service demands are resulting in a velocity differential – new companies can go to market faster because they aren’t dealing with a legacy infra, they can just procure their infrastructure as they need itAnd when you bring the consumerization of technology together with the industrialization effect that Cloud is having on IT, all of a sudden we are looking at a world where people are connected to people, to machines, machines are connected to other machines and all these connections are leading to decisions made and actions taken – by people and machinesIt’s a multiplying effect on the differentials that creates a greater one where information technology needs to enable businesses/companies to act quickly with agility to changing user and business challenges