Businesses will realize $544 in profit this year as a result of interconnected systems, but will leave almost as much on the table
Cisco partners at the company’s annual Partner Summit earlier this month in Boston may be forgiven if their eyes glazed over somewhat every time a Cisco executive started to talk up “The Internet of Everything.”
Cisco’s extension of the concept of the Internet of Things, or sensor-driven, machine-to-machine Internet traffic into a kind of anything-to-anything network of free-flying data was first and foremost on the company’s mind at its gathering in Boston. And while the company has big numbers to back that up – its figures estimate $14.4 trillion in net profit will be driven over the next 10 years by this movement – it seems very much like a “watch this space” message. Many solution providers that Channelnomics talked to at the show were intrigued by the possibilities, but saw little applicability to their business today.
However, the company’s latest research on the subject may change those eyes from glazing to popped, as the company says that across 21 different use cases for the Internet of Everything (IoE), companies around the world will capture $614 billion in value this year alone. But the bigger news for channel partners is how much is being left on the table. Cisco’s study says that businesses feel there’s another $544 billion this year that could be captured through Internet of Everything types of solutions, but ultimately will not be.
The numbers, presented by Cisco president of sales and development Rob Lloyd, suggest that solution providers should be checking out their customer base to see where more realtime data analysis would drive business value. Lloyd’s advice to customers is to “do the things that impact your business the most first.” For example: for manufacturing firms, doing more realtime data analysts and remote tracking of physical assets would drive significant value. For energy firms, integrating data from smart sensors might be the thing that would make the biggest difference. And so it goes for partners, who can help translate some of the promise of these interconnected networks of people, processes, and things into business value for customers.
Cisco is fond of reminding that the Internet of Everything is not a solution – one cannot find a SKU for IoE at distribution. Rather it’s an approach to gathering, dealing with, and acting upon information and new and faster ways. Among the 7,500 business and IT decision makers worldwide that Cisco polled on the subject, Lloyd said the ones who were driving the most value from their investments around IoE were absolutely investing in “high-quality technology infrastructure and tools”, most notably to drive efficiency and convert data into information locally. But Cisco found that more than 50 percent of the value businesses are getting are from people-related changes rather than technology-related changes. Two of the things Lloyd cites as a difference-makers were adopting and following “inclusive practices” that allow people to make fast decisions once data is presented, and developing effective information-management practices to maximize the use of the of the data a corporation collects.
Lloyd’s first category of differentiation is pretty extensive – it involves changing things like business models and company cultures, dismantling command-and-control structures on which many companies are built and establishing processes and systems whereby information is fed to the right people at the right time, and those people are empowered to act on it as quickly as possible. It might be intimidating territory for many solutions providers who come at projects from a technology rather than a business process profile. But the second category, developing effective information management practice, is something that is certainly within the grasp of many solution providers.
Cisco’s network of partners might not be able to capture all of that $544 billion over the next six months, or even a majority of it, but given that those polled seem to expect all of that extra profitability to disappear in a puff of smoke, even baby steps towards tackling customers’ data collection, management, and analysis challenges could generate nice profit margins for both solution providers and customers.