What's the 'Internet of Everything' worth? $613 billion, Cisco reckons

In 2013, Cisco calculates that companies could produce $613 billion of mostly incremental profit by harnessing the growing networked world of people and things.

Dan Farber
3 min read

Cisco Systems wants its customers to know that there is a huge amount of money to be made if they focus their strategy and IT budget on what the company and others call the Internet of Everything.

That's the idea that more than half of the people and 99 percent of the things on the planet are unconnected and that by connecting them and riding the wave of industry transformations, such as smart factories, digital health, mobile collaboration, virtual assistants, and connected commercial vehicles, giant profits will follow.

In other words, the companies that invest in the "connections economy" and harness the network effects of the Internet of Everything -- which is people, process, data and things -- will reap more of the profits.


Beyond stating the obvious -- companies leading the next wave of commercialized technology innovation will reap profits -- Cisco calculated that the Internet of Everything will create $14.4 trillion of "value at stake," defined as the potential bottom-line value derived from harnessing the Internet of Everything, over the next 10 years. That figure includes $613 billion in potential global corporate profits this year. For companies taking even greater advantage of the Internet of Everything, an additional $544 billion in profits could be gained in 2013, Cisco said.

"This study shows us that success won't be based on geography or company size but on who can adapt fastest," said Rob Lloyd, Cisco president of development and sales.

Most of the value generation will come from improvements in utilization, employee productivity, operational efficiency, customer experience and innovation, Cisco said, with retail, manufacturing, finance and information services providing more upside than other industry sectors.

In retail, for example, profiting from the Internet of Everything means investments and expertise in predictive analytics, data visualization, mobile payments, remote customer monitoring and rich media interfaces.

Not all of the global profit in the $613 billion figure is attributable to creating new value (additional profit) on top of what could be considered the perennial shifts in market share among players in a particular area. Cisco estimates that 59 percent of the $613 billion will be new value, while 41 percent will be generated by companies taking market share from the competition.


Cisco's survey of 7,500 business and IT decision makers from the largest 12 global economies and across 18 different job functions, found that technology infrastructure and tools were the most important factors in determining the amount of value realized. That's not an unexpected finding considering Cisco's authorship of the study and the need to invest in technology to create new business opportunities and cost-saving operational efficiencies.

However, people management and IT processes are core to the value proposition, in terms of reducing the risk of implementation failures, which according to some estimates could be as much as $3 trillion annually worldwide.

"The value of looking at people management; policies, practices and process; and information management is just as important as technology, so it's much bigger than Cisco," said Blair Christie, chief marketing officer at the company.


The Internet of Everything could also be a boon to workers. Forty-seven percent of those surveyed said it could lead to higher wages at their companies, especially in emerging markets. On the other hand, companies might be less eager to hire people. Only 33 percent of respondents said the Internet of Everything would lead to more jobs at their companies.

It's likely that much of the profit derived from the rapid scaling of Cisco's Internet of Everything, with billions more people and devices, and trillions more sensors in things connected to the Internet, will come from companies scaling their operations with more machines talking to other machines, rather than significant workforce increases.

And it's the rise of the intelligent machine mediating the Internet of Everything in the cloud that will deliver the most value, if not profit, for billions of people and the companies in the data and services supply chain.