Blog that will post at 10am on the Cisco IoT blog. Sharing here for media attending Partner Summit 2014, but obviously wait for the URL on the blog itself if sharing.
1. Internet of Things
More than a Trend, a Real Business Opportunity
We live in the age of the mega trends. You name it, from high in the Cloud, to everywhere Mobility, Big
Data, Social, Analytics and more. The Internet of Things (IoT) became part of that select group of mega
trends not that long ago, and its relevance, support and understanding have been growing steadily for
the past couple of years.
But IoT is more than just a trend. For business it represents a huge opportunity to create and deliver
new and better services to their customers. How big? It depends who you ask, but no matter which
group you ask, from the most respected analyst firms to the thought leaders in the industry, they all
agree that the opportunity is massive, real, and here now.
Now, from our perspective as a technology solutions company, and reflecting on the topics we are
covering with our partners at the World Wide Partner Summit this week in Las Vegas, I believe the
following points can help to explain how relevant IoT is from a business perspective:
IoT is a Greenfield Market. The Internet of Everything (IoE) is about connecting the unconnected â
People Processes, Data, and Things - and by our estimations 99% of the Things in the world that
could be connected, remain unconnected today. The first 1% is what Cisco and our partners have
been working to connectfor the past 3 decades.That other 99% is what is called the IoT.How is that
possible? Well itâs quite simple. For the most part, the Internet as we know it is a network of
computing devices (PCâs, tablets, smartphones, servers). While the IoT is a network of âthingsâ, such
as sensors, signals, meters, motors, actuators, cameras, etc. And how big is this market? Cisco
estimates that thetotal addressable market for IoT for us and our partners will be$27Bby 2016,
growing at 42% CAGR. How is that for a net-new business opportunity?
IoT Devices are Not Computers. It is not that you canât connect a computer to these networks
(actually, sometimes you really canât). What is different about IoT is that the rest of the devices
connected to these networks are not traditional computing devices. They are usually designed for a
particular purpose only, they use different communication protocols (not IP), and they live in
disparate networks (convergence has not happened here yet). The information flows on these
networks arenot focused on moving massive amounts of data, voice and video in an any-to-any
fashion, but isfocused on automation and control tasks. And most times these devices operate in
hierarchical and closed-loop networks⊠intentionally! But in the end, these are networks, and
standardization and convergence will drive BIG efficiencies and better visibility and control across
the board, and the market (from the device makers all the way up to the application developers)
have already recognized that. For example, according with a recent Lopez Research report,
efficiency improvements of 5% in a small industrial power plant generating 15MW can save over
2. $200,000 on average per year. These devices are often rich in data but poor in information, and they
need a new level of resilience at scale. They need a new distributed computing model (Fog) and a
new platform for application enablement from the core to the edge of the network. And of course
they need a whole new approach to security (cyber and physical). Now think about this: by 2020 we
calculate we will have over 50 Billiondevices connected to the Internet, up from the nearly 7Billion
we have today. This is such a great opportunity for growth and value that can be delivered by our
partners!
IoT Lives in âOutsideâ. We have been quite successful delivering solutions for the âcarpeted officeâ
for many years now. Cisco products are present today across the DataCenter, the Campus and the
Branch Offices of small, medium and large companies around the world. Our customers enjoy the
value and reach of the networking, collaboration, security, computing and other solutions we offer
with our partners. But IoT lives outside, not inside. IoT is the land of the field networks at power sub-
stations and oil rigs. IoT is the essential infrastructure and services foundation for the industrial
networks at manufacturing sites, refineries, and train stations and tracks. These new places in the
network require a different kind of secure, manageable, scalable and reliable infrastructure that can
respond to environmental (temperature, shock, vibration, dust, water, etc.), regulatory, mobility and
multi-protocol (Modbus, Wireless-Hart, Zig bee, Serial, etc.), requirements that go far beyond what
you need in a typical wiring closet.
IoT has New Decision Makers and needsan Extended Partner Ecosystem. IoT goes beyond the
realm of Information Technology (IT) to address the Operational Technology (OT) space, particularly
in some of the industries (like manufacturing, energy utilities, and transportation) where the
technology investments are not driven by traditional IT capabilities or careabouts, but by hard
business outcomes related to the direct operation of the business and its main output. These new
decision-makers are used to working with a different type of partner, one that focuses on delivering
full solutions for operational technology needs where the traditional IT technology elements such as
network connectivity, management, security, mobility, communications and other capabilities are
embedded into a full package. This full package for OT is often created to mask the need forany
kind of IT-related technical knowledge to operate and support. Simplicity and ease of use are kings
for IoT, and the new solutions required by the OT decision makers require alliances between our
traditional partners and a new group of ecosystem partners. These new ecosystem partners need
the expertise on information technology solutions that traditional Cisco partners have so they can
deliver more powerful, converged, secure and manageable OT solutions. WhileCiscoâstraditional
partners need the deep industry expertise that the ecosystem partners have to reach a new level of
relevance for the customers they serve. Together they have the opportunity of bridging the
conversation between IT and OT, defining the business and technology boundaries and establishing
paths for mutual success.This is a win-win proposition for all of them.
3. This yearâs theme for our partner summit is âAmazing Togetherâ and that is exactly what the IoT market
expects from Cisco and our partners. We are working hard to deliver on the expectation, and then
some. If you have a passion for IoT, and you are interested in sharing this journey, come and join us.