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Internet of Everything (IoE) Economy

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What is the value at stake in the Internet of Everything (IoE) economy? Learn more: http://cs.co/IoE_IBSG

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  • Slide 11 is interesting - but what appears to be missing is Industrial Service Lifecycle Management.

    Assuming that the 'manufacturing' bubble includes PLM and MRP - that is NOT where the growth and profits are for manufacturers.

    Look at aviation, aerospace and defense - engine manufacturers moved into the SLM market over a decade ago (GE, RR, UTC, ...) and have been followed by component and most recently airframe manufacturers - all offering Total Care, Power by the Hour, Performance Based Logistics, Total Technical Services, ...

    SLM now accounts for over 50% of A&D OEM's revenue and 70%+ of A&D OEM net profits!

    After autonomic computing, aerospace autonomics enabled by IoE has been around and advancing since the mid-90s.

    The question I have for IoE in general is - what's the data standard? What's the semantic web?

    Again, in A&D, we started moving toward an international industry XML schema based data and transaction standard in the late 90s - and now, 15 year later, we have achieved global data / transaction interoperability via the ASD SX000i family of standards - applicable to planes, trains, ships, and automobiles.

    So the Industrial Internet of Everything is set - question is - how will the retail IoE deal with this challenge and how long 5 years, 10 years or more?
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  • welll i think that cisco has a good perception of the world and the internet
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  • really good
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  • Well said Jamie!
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  • How we prepare ourselves and customers to address this transition is critical and inevitable. Significant profits are at stake to either be won or lost. Let Cisco and Cisco Capital help you take advantage of this opportunity.
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Internet of Everything (IoE) Economy

  1. 1. The Internet ofEverything (IoE)Value at Stake in the IoE Economy @CiscoIBSG For more information: http://cs.co/IoE_IBSG© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Public 1
  2. 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© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Public 2
  3. 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© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Public 3
  4. 4. IoE brings together people, process, data, and things to make networkedconnections more relevant and valuable than ever before—turning information intoactions that create new capabilities, richer experiences, and unprecedentedeconomic opportunity for businesses, individuals, and countries. Source: Cisco IBSG, 2013© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Public 4
  5. 5. The Internet of Everything builds on the foundation of the Internet of Things byadding network intelligence and security that allowsconvergence, orchestration, and visibility across previously disparate systems Internet of Things Internet of Everything Intelligence Convergence Visibility Security Source: Cisco IBSG, 2013© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Public 5
  6. 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© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Public 6
  7. 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© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Public 7
  8. 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© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Public 8
  9. 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© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Public 9
  10. 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© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Public 10
  11. 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© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Public 11
  12. 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© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Public 12
  13. 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© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Public 13
  14. 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© 2013 Cisco and/or its affiliates. All rights reserved. Cisco Public 14
  15. 15. Thank you.@CiscoIBSG For more information: http://cs.co/IoE_IBSG

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