Cisco's Australia and New Zealand Managing Director Ken Boal sat down with iTWire to explain that $14.4 trillion in value is at stake worldwide over the next 10 years, through new opportunities for businesses as they get more connected with "everything."
"What we're looking at is essentially the fourth generation of the Internet," Boal told iTWire. "First we had the world wide web, then e-commerce, we've enjoyed the social web of the last few years, and this is the next big wave. It's the coming together of a number of aspects of the internet, it's people, people, process, data and things."
Cisco said the benefit of the Internet of Everything is derived from the compound impact of connecting people, process, data and things, and the value this interconnectedness creates as “everything” comes online.
"The research looked over 21 major use cases," Boal said. "Things like connected factories, smart factories, the smart grid, smart buildings, connecting commercial ground vehicles, health care, advertising... a whole host of them. We broke down how that $14.4 trillion was derived, and from what parts of the business."
The report found the Internet of Everything is expected to enable Australian private sector businesses to generate at least $36 billion in profits (compared with $613 billion globally), and the value at stake or total potential bottom line value (by producing higher revenue and lower costs) that can be created among Australian businesses based on their abilities to harness the Internet of Everything is $74B for Australia (compared with $1.2 trillion globally).
Cisco meanwhile gave Australian businesses a current Internet of Everything score of 48%, meaning about 50% has been left 'on the table' and untapped by the end of 2013. Of the 12 countries surveyed, Australia ranks behind the UK, US and Canada. And in our region, behind Japan, India and China.
Competition will also intensify as Cisco said the Internet of Everything will level the playing field between large, mid-sized and small companies in Australia. Small to mid-size firms (500-1,999 employees) are actually capturing slightly more Value at Stake on a percentage basis than large enterprises with at least 10,000 employees in Australia – 52.5% vs. 47.2%.
Boal said businesses surveyed weren't aware Cisco was conducting the survey, and were only told it was productivity and capabilities, and the term of 'Internet of Everything' wasn't included.
He also said the government has a key role to play, saying "both the government and opposition are committed to broadband, and that's a critical infrastructure platform for the Internet of Everything, but I think the government could be doing more to show leadership in applying it to their own operations, in things like public transport, healthcare systems and education systems."
Further findings in the report include:
The top business drivers of profits stemming from the Internet of Everything for Australian businesses are
#1 Providing new and/or improved customer experiences (Australia Value at Stake $26.4 billion)
#2 Making their operations more efficient (Australia Value at Stake $10 billion)
#3 Accelerating the pace of innovation (Australia Value at Stake $23.9 billion).
The top technology drivers of profits stemming from the Internet of Everything for Australian businesses are
#1 New types of devices (40%)
#2 Cloud-based technology (31%)
#3 Volume of data generated (27%)
Four industries make up more than half of the Internet of Everything Value at Stake (manufacturing at 27%, retail trade at 11%, information services at 9%, finance and insurance at 9%).
The top business benefits of the Internet of Everything for Australian businesses are:
#1 Operational efficiency (Value at Stake drivers: asset utilisation, supply chain, employee productivity) (45%)
#2 Customer service (Value at Stake drivers: customer experience) (44%)
#3 Collaboration within company (Value at Stake drivers: innovation, employee productivity) (28%)
Cisco concluded that winners in this next phase will be companies that successfully apply technology to improve the “people” (inclusiveness practices, human-capitol practices) and “process” (information-management practices, measurement practices). It was the first time Cisco had conducted the survey, with scope to hold it annually or biennially.
For more information check out Cisco's dedicated 'Internet of Everything' page here.