1.
A Futurist Perspective
Innovating for the Internet of Everything
Joseph M. Bradley
General Manager and Founder, IoE Practice, Cisco Consulting Services
@JosephMBradley
September 16, 2014

2.
Convergence of Mobile, Social, Cloud, and
Data Is Driving Digital Disruption
Digital Disruptors
This year, the number of
Globally, An estimated machine-77 billion to-machine
apps
In By 2012 2020, alone, about we 50 created
billion
objects more data connected than previous
to the
mobile-2/3 of the connected world’s mobile devices data
will
exceed traffic will the be number video of by people
2015
Digital
Digital
Disruption
Disruption
IP traffic will be will downloaded
grow 20-fold
from during 5,000 2012 Internet
years
2014
to 2017
on earth
In 2012 alone, we created
more data than previous
5,000 years
By 2020, ~50 billion
objects connected
to the Internet
An estimated
77 billion apps
will be downloaded
during 2014
2/3 of the world’s mobile
data traffic will be video
by 2015
Globally, M2M IP traffic
will grow 20-fold
2012 – 2017
This year, the number of
mobile-connected devices
will exceed people on
earth
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 2

3.
Implications of Digital Disruption
10 Every company is a technology company
9 Change isn’t constant, it’s instant
8 Value is in the platform, not the product
7 The majority doesn’t rule…but you do
6 Experience trumps functionality
5 Digitization…the gift that keeps on giving
4 Fail fast and often to win
3 Data is everywhere, insights are scarce
2 Insight is the new currency
1 Context, not content is king
This year, the number of
Globally, An estimated machine-77 billion to-machine
apps
In By 2012 2020, alone, about we 50 created
billion
objects more data connected than previous
to the
mobile-2/3 of the connected world’s mobile devices data
will
exceed traffic will the be number video of by people
2015
Digital
Digital
Disruption
Disruption
IP traffic will be will downloaded
grow 20-fold
from during 5,000 2012 Internet
years
2014
to 2017
on earth
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 3

4.
Are You Ready?
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 4

5.
Value Is Not in the Number of Things, But the Connections
of People, Process, Data, and Things
Process
Delivering the right
information to the right
person (or machine)
at the right time
Things
Physical devices and objects
connected to the Internet
and each other for intelligent
decision-making; often called
Internet of Things (IoT)
People
Connecting people
in more relevant,
valuable ways
Data
Leveraging data
into more useful
information for
decision-making
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 5

6.
IoE Drives $19 Trillion In Value Over 10 Years
Asset utilization:
$2.5T
Supply-chain / logistics
Private
Sector
$14.4T
Includes both industry-specific
efficiency : $2.7T
Employee Productivity:
$2.5T
Improved customer
experience :
and horizontal
use cases.
$3.7T
Innovation:
$3.0T
Increased Revenue:
$125B
Reduced Costs:
$740B
Employee Productivity:
$1.8T
Defense:
$1.5T
Public
Sector
$4.6T
Includes cities, agencies, and
verticals such as healthcare,
education, defense
Citizen Experience:
$412B
Total IoE Value
at Stake
$19.0 Trillion
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 6

7.
IoE Is Already Here
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 7

8.
Creating Opportunity from
IoE Innovation
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 8

9.
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 9

10.
Where Do You Begin?
Gesture Wi-Fi
Recognition
IR Motion Door Hinges
Associate
Mobile
Digital
Signage
Customer
Mobile
Video
Cameras
Parking
Space Sensor
Central Compute
Platform
Wi-Fi Badge
Shelf Weight
Sensors
Big Data
Repository
Wi-Fi Tags
Fast Data
Processing
Weight Mat
Action Enablement
Wisdom from
the Cloud
eCommerce &
Semantic Web
Business Systems
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 10

11.
Cart Path Tracking
Visit # Zone
Lingertime(s)
in minutes
Amount
spent
909334 Apparel 152 $0
Meats 286 $19.88
Checkout 447 $8.88
Entertainment 97 $0
Girls 162 $0
Foods 1946 $110.85
H&W 201 $24.75
Hardlines 129 $0
Home 366 $28.70
TOTAL 3786 $223.48
In-store Analytics Identifies
Time and Amount Spent
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 11

12.
Out-of-Stock Identification
1
0.75
0.5
0.25
FastRetail Identifies Out-of-Stocks More Quickly than Current Systems
Stock Level
1
0.75
0.5
0.25
Out of Shelf
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 12
Multi-day view
0
0
Current System reported shelf stock level
FastRetail reported level
Single day view
Shelf inventory depleting while
system inventory increasing Shelf inventory zero

13.
Checkout Optimization
Economics: $100M / yr. Savings for 1,500 Store Chain
Current State With FastRetail
Cashier Hours/Day:
Cost/Day:
Average Queue Length:
95% Queue Length:
Average Wait Time:
95% Wait Time:
Utilization
Weekday Weekend
150
$ 1800
2.5
2
1:13
3:49
70%
200
$ 2400
2.7
3
1:31
4:01
78%
Weekday Weekend
140
$ 1680
1.6
1.7
0:29
1:55
77%
180
$ 2160
1.9
2.5
1:09
4:00
86%
An estimated annual savings of
$50-$70K can be achieved
at one large store in a year
2-3 FTE Free per large store
to redirect to other tasks
95-percentile wait time
cut by ½ on weekdays
Up to 50%+ reduction in
average wait time
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 13

14.
Retailer Value at Stake: 12% Higher Profits /
0.8 Percentage Point EBIT Margin Gain
Next-gen workers
$182M contribution to EBIT driven by higher employee
productivity and lower real estate rentals (telecommuting)
Innovative payments
$28M contribution to EBIT due to lower
merchant processing fees
Connected marketing and advertising
$60M contribution to EBIT resulting from more
targeted, location-based advertising
Reduced out-of-stocks
$20M contribution to EBIT generated by
reduced out-of-stock occurrences
Increase in IT costs
IT connectivity cost of $41M to enable IoE
Revenue
base:
$20.0B
Projected
revenue:
$20.8B
12,800 13,312
4,400 4,366
800 832
2,000 2,249
25,000
20,000
15,000
10,000
5,000
0
As-it P&L To-be P&L
Retailer P&L ($ mn)
EBIT D&A SG&A COGS
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 14

15.
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 15

16.
Public Sector Leading the Way: Top 10 Insights
Public sector organizations leading IoE innovation
Cities using comprehensive strategies to capture IoE value
A powerful network foundation expands the “art of the possible”
Scalable pilot projects build support, momentum and expertise
Data analytics magnify the impact of IoE
It’s an app world
IoE solutions must address people and process, not just data and things
Transparency and open data drive stakeholder engagement
5
9 IoE is a catalyst for breaking down organizational silos
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 16
1
2
3
4
6
7
8
10 Senior leadership and tangible public benefits essential or IoE success

17.
Nice City Increased Parking
Revenue 40-60% without Raising Taxes
Process
Innovation
 Pricing
 Payment
 Finding spaces
People
Impact
 Traffic wardens
 Citizens/drivers
 City planners
 Increase compliance by 30%
 Parking Revenue increase 40 – 60%
 City data sales
 Reduced congestion, time-to-park
 Dynamic pricing — revenue increase
New Things
Connected
 Parking spaces
 Parking meters
Value
Impact
New Data
Flows
 Space availability
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 17

18.
Barcelona: Smart City Creates $3B in Value
Smart Lighting Smart Buses Smart Water Smart Bus Stop Smart Parking Smart Waste
 Reduced costs, more revenues,
better productivity and citizen
experiences
 Created 47,000 jobs
Smart citizens
Smart Water: $58 million
Smart Parking: $53 million
Smart Lighting: $47 million
Smart Buildings: $124 million
Connected Learning: $170 million
Revenue Citizen Experiences Jobs Productivity Cost Avoidance
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 18

19.
What To Do Now
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential 19

20.
Last Year, Companies Left 47% of IoE Value on the Table
$613B (53%) Value
Realized
in 2013
$544B (47%) Value
“Left on Table”
in 2013
2013
$1.2T
Value at Stake
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 20

21.
What We’ve Learned: Infrastructure, Inclusion,
and Information
To Capture More IoE Value, Companies Must:
1 2 3
Adopt and
follow inclusive
practices
that foster
collaboration
Develop
effective
information
management
practices
Invest In
high-quality
technology
infrastructure
and tools
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 21

22.
A New Platform for Business and IT Is Required
Internet of Everything
New Breed Big Data &
IoT
of Apps
Analytics
Hyper-Aware Predictive Agile
Fast IT
Mobile Cloud
Infrastructure
automation
IT-as-a-Service Application-centric Security
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 22

23.
Let’s Get Started
TWITTER SLIDE SHARE EMAIL LINKEDIN
@JosephMBradley JosephMBradley
josbradl@cisco.com JosephMBradley
© 2013-2014 Cisco and/or its affiliates. All rights reserved. Cisco Consulting Services Cisco Confidential 23

24.
Thank you.