There’s been a lot of big talk about IoT for the past several years, and I admit, I’ve been skeptical.
Thermostats. Toasters. Fitness trackers. So what? Why is this so transformative for Cisco’s customers?
I wanted to understand this “transformation” more deeply. So, I read every report I could get my hands on. I talked to our customers, partners, academics, and other IoT experts. I even looked back at the history of IT itself.
Here’s what I learned.
IT has fundamentally transformed business twice in the last 50 years. First, in the 1960s, the entry of computers and IT into business changed processes and activities. Then, in the 90s, the introduction of the “Information Superhighway” connected processes and activities together.
Now we are entering the third era — the Internet of Things. However, I believe the term “Internet of Things” is fundamentally misleading. It’s not so much about the Internet, which is just a mechanism for transmitting information. It’s actually about the changing nature of the “Things” themselves. The true power of smart, connected Things and the data and insights they generate will create the next era of business.
To be clear, by “Things,” I do not mean smart phones or tablets. I mean everyday Things – from pillows to snow plows, from turbines to tents, from whistles to wind farms. These are the Things our customers make. And these Things have remained largely unchanged, despite how IT has transformed business processes and productivity for the past 50 years.
What we are seeing now is a shift in which IT becomes a fundamental part of a company’s products, not just that company’s operations. Thus, the real magic of IoT will be inside the products themselves.
IoT is underhyped – Yes, underhyped.
IoT is producing tangible business outcomes – today. Just ask the automakers. GM will net $350 million in net new revenue for GM over the next three years using Cisco Jasper to underpin all of its connected car offerings in all new vehicles to provide entertainment, safety, vehicle diagnostic capabilities and other services.
And this is just the beginning for GM and others. In Q1 of this year, new cellular connections in cars surpassed new cellular phone connections, (source: Chetan Sharma) – incredible. In fact, Cisco is working with over 50 brands from 23 different auto manufacturers, and industry forecasts predict that by 2025, all vehicles will have connectivity built in as standard.
Cars, elevators, beer kegs, and literally every other product in the world could be affected. This will transform business models, and I believe there’s a real opportunity for IT to go from a cost center to a revenue generator as its company’s Things become connected.
At Cisco Live this week, I outlined several ways that we’re making it easier for IT to take advantage of this unprecedented shift by addressing the following challenges:
- Connectivity – How does IT connect everything, identify and authenticate devices and then handle the volumes of data that result?
- Data Intelligence – Today’s networks tend to be focused on connecting systems, whereas future networks will be data, information and resource-based. Increasingly, IT will need a higher-level view of the network to make it more consumable and robust for IoT services. So we are looking at how data flows can enable intelligence and analytics.
- Security – The other major inhibitor to IoT success today is security. We are taking a secure end-to-end approach to help customers evolve their existing networks to cope with this influx of new devices, users and data flows.
Cisco offers numerous solutions today to help. We recently announced several new industrial IoT solutions that provide a highly secure architecture for connected factories, and help eliminate unplanned downtime by bringing IoT to connected machines.
We also have new, incredibly powerful IoT Cloud solutions through our acquisition of Cisco Jasper. The Control Center solution from Cisco Jasper is being used to monitor, manage and control cellular connected devices for use cases as diverse as optimizing route planning in logistics to a farmer knowing exactly when a cow is about to give birth.
Get IoT today
We know getting started may feel daunting. That’s why we launched an IoT Starter Kit with AT&T today, and we invite you to take the tour.
The kit provides provides everything needed – including hardware, software and services – to help developers take advantage of next-generation 4G LTE connectivity and start developing new IoT services. This also includes a major evolution of the service development model with six months of IoT data services for new customers. This is the most advanced starter kit available today!
While the opportunity is real and here now, only 7% of IT managers report having an effective IoT strategy. I cannot wait to take this journey with the other 93%.
Rowan, Excellent article. Thank you for simplifying the message. This is easily transportable to business entity strategy. Really appreciate the message and the work that goes into it.
Hi Rowan,
I would like to thank you for the presentation you did at Networkers. I watched it remotely and quite honestly IOT wasn’t clear to me until you used the iPod example, where you described how the iPod alone is a music player but when coupled with the iTunes store, it’s now a music service. That is, the iTunes connection transformed a piece of hardware to a service. That analogy really made it clear in my mind.
Thanks for that valuable nugget,
Steve
Sorry, I meant Cisco Live… I’m showing my age:-)
Good article. “…data and insights they generate will create the next era of business.” I agree. “IoT” is a misnomer; catchy, but not entirely accurate as you point out.
Perhaps we can start a campaign focused on the value provided by the infrastructure (a.k.a. IoT) and brand it as “Intelligent Services”or “Information Utilities”, much like society has come to expect electricity, HVAC, and indoor plumbing.
Makes sense, totally . If things will start doing stuff that human used to do, its only a matter of time things should have channel of communication and reaction as Humans do. Good blog.
‘IoT is under hyped’ – wow, that is a bold statement. But I share the same opinion and I agree that the IoT train is leaving the station.
To add to your point, I feel that most of IoT skeptics either feel that the ‘things’ are too varied to be connected or believe that IoT needs to be a platform that covers most things across all segments. While connecting ‘things’ is certainly a complicated business, there is tremendous value in doing so and I believe Cisco is adopting the right strategy by breaking the problem into smaller chunks and attacking them, as in the case of Cisco’s industrial IoT solutions.
To skeptics who feel that a single large platform is needed, I think it arises from the tempting view on ‘how mobile became a platform’. We should see Internet as a fabric that wraps around ‘things’ in IoT and we are the tailors who do the design of the IoT clothing.
” real opportunity for IT to go from a cost center to a revenue generator” Generally, this is an incorrect perception held by whosoever.
Fundamentally, a very good article.
Great article. This is exciting and i would love to learn more.
Thanks Rowan! For further reading, here’s a lengthy but interesting Georgia Tech paper, for inquiring minds who want to better understand the tangled web that lies ahead with the IOT. It gives some good context for the scope and scale of the IOT, as well as the security challenges to be addressed, for those interested.
http://peterswire.net/wp-content/uploads/Clarifying-the-Internet-of-Things-by-Defining-the-Internet-of-Devices.pdf
Fascinating stuff . . . if it can be done securely, and that’s why I’m pleased that the ELT is emphasizing security as a complementary focus to IOT.
OK, apparently I wasn’t logged in. Here’s the link (looks like you’ll need to copy & paste into your browser).
http://peterswire.net/wp-content/uploads/Clarifying-the-Internet-of-Things-by-Defining-the-Internet-of-Devices.pdf
Rowan great article and simplified message. I would like to to take you article to the next level in saying that connectivity, security are crucial points. Also data intelligence gets his importance only if you turn them into actionable insights. Most of discussions that I have with companies are producing all lot of data through IoT already but don’t turn them into actions. How you can solve that? By implementing AI.
For connectivity Japser is for Europe only partly a solution. We need the ecosystem other partners and solutions to realize the REAL IoT solution that includes the other missing pieces that you have not mentioned. E.g Relayr.io, EMSP of Cisco for customer engagements. I would be interested in your opinion in that. Futurebuilt.net