If you think we already live in a connected world (and we do!), get ready to fasten your seatbelts.

Today, there are “only” about 10 billion connected “things” on the planet. This includes hundreds of millions of people communicating with one another in myriad ways, and a rapid increase in two-way conversations between people and machines. That is, when the machines aren’t busy “chatting” with other machines.

It may sound complicated (and it is!). But the Internet of Things is just the proverbial tip of the iceberg. The next phase of the Internet — the Internet of Everything (IoE) — will encompass 50 billion connections involving people, process, data, and things by 2020. This will drive the next wave of dramatic Internet growth and opportunity.

Cisco estimates that the IoE economy promises a staggering $14.4 trillion in Value at Stake for private-sector companies globally over the next 10 years. This value is embedded in five drivers: asset utilization; employee productivity; supply chain and logistics; customer experience; and innovation.

With much of the world still reeling from the long-term effects of the recent global financial crisis, asset utilization and employee productivity may be the most immediately relevant for businesses and enterprise. A prime place to realize these goals is the “smart factory” or the “smart workplace.” Such facilities drive value by deploying ubiquitous sensors, much-improved connectivity with machines, and greatly refined interfaces with people. Cisco projects the Value at Stake from smart factories to be $1.95 trillion the next 10 years, driven by revenue growth, reduced supply-chain costs, and better workforce collaboration.

The connected supply chain is also capturing the imaginations of business leaders. In fact, according to Cisco’s just-released IoE Value Index study, supply chain will create more value ($158.7 billion) than any of the other IoE drivers in 2013. Cisco reviewed comments and public announcements of CEOs of the top 100 companies globally and found that 33 percent of retail CEOs cite “connected supply chain” as a core enabler of future value. This entails a shift in importance from commodities to intangible factors, such as content and human competencies. An early exponent of this thinking is Walmart, where an index to measure the sustainability of suppliers and products has proved a success.

A thriving example is the “non-physical” sales channel—better known as e-commerce. According to Gartner, e-commerce will account for 20 percent of total global consumer spending by 2015. For the Gen X and Gen Y consumer, it is already the primary channel for shopping. Many brick-and-mortar retailers recognize the pressing need to offer shoppers a multichannel shopping experience, while gaining greater efficiencies to compete in a globalized marketplace. According to Joel D. Anderson, president and CEO of Walmart.com, “You’ve got to go where the customer wants you to go.”

But how does an organization know where the customer “wants them to go”? In this case, the problem is the solution—e-commerce holds the key. Aside from consuming information while shopping, online consumers generate it. For example, where they are located, how they shop (whether in a store or via social media), their favorite sources of information, when they prefer to shop, what they have purchased or researched in the past—all create torrents of data that, if processed correctly, will offer crucial insights. IoE will also transform brick-and-mortar retail, with sensors and analytics mapping customer behavior and correlating stock inventories—all in real time.

Two other pillars of IoE—Big Data analysis and cloud computing—will translate the data deluge into a vastly heightened and personalized customer experience. These emerging, cutting-edge technologies will rapidly store, share, and filter an avalanche of information for relevant insights and key trends.

The increased acumen will provide the cornerstone of another key CEO care-about: innovation. However, CEOs are not entirely relying on customer insights; they also emphasize internal and external collaboration to generate innovation.. When essential insights enter an organization and collaboration tools spread them across business units, borders, and time zones, sit back and let the creative, collaborative magic flow.

CEOs have always sought to improve productivity, efficiency, innovation, collaboration, and decision making. But the Internet of Everything economy will make these goals ever more imperative as the pace of change accelerates and the dangers of falling behind are heightened.

The savvy CEO will adapt, adopt, and embrace the vast potential of IoE. What do you think?


Joseph M. Bradley

Global Vice President

Digital & IoT Advanced Services