SAN JOSE, Calif. –Cisco Systems is gearing up for what it claims could be $14 trillion opportunity with the Internet of Things. Top technical executives shared plans for the networking giant to embrace IoT as well as efforts to extend to key partners its internal process of evaluating new technologies.
As many as 50 billion devices will be connected to the Internet by 2020, creating a $14.4 trillion business opportunity, said Rob Lloyd, president of sales and development at Cisco, speaking at an annual press event. The trend will create business opportunities initially in manufacturing, government, energy and health care that extend far beyond today’s budgets for computer and communication systems, he said.
The IoT space also presents a host of challenges. For example, Cisco is working with a dozen utilities worldwide in hopes as many as 10 million smart meters will be deployed by the end of the year supporting Internet Protocol. Today, as many as 2 billion smart meters are in operation using a mishmash of as many as 135 utility protocols. “There are cases where we need gateways, and we will have a migration strategy,” said JP Vasseur, a Cisco fellow.
Cisco crammed into 40 Kbytes RAM an IPv6 stack for smart meters now supported on a handful of microcontrollers from companies such as Atmel, STMicroelectronics and Texas Instruments. U.S. cybersecurity laws hampered adoption of open, routable protocols, but those rules are due for an update as early as this month easing the way for IP, said Rick Geiger, executive director for Cisco’s smart grid group.
Separately, Cisco invested in Cohda Wireless (North Adelaide, Australia), a vendor of 802.11p boards seen as a key enabler for connecting cars to the Net. The U.S. Department of Transportation is conducting trials of the technology which can be used to connect cars to each other and to infrastructure to smooth traffic flows and avoid accidents.
Padmasree Warrior, Cisco's chief technology and strategy officer, demonstrated an automated parking system using sensors from Streetline, a Cisco partner. The products will be used in Cisco’s own headquarters and are one of many examples of sensors that will link businesses and consumers over mobile networks, creating opportunities for services managing big-data analytics, she said.
Cisco is installing Streetline sensors at its headquarters as part of its embrace of IoT.
The only REALLY likely market to come out of all this is all those electricity, water and gas meters needing to be read automatically at low cost, if only because public utilities generally have easy access to the capital needed to fund large projects. (The electricity meter's needs are somewhat unique because it tends to merge somewhat with general power distribution management or the "smart grid".) However because the data rates needed AT EACH METER are quite low it's unclear how such a network could be done efficiently. Some have envisioned an all-wireless "self-organizing" system (with individual nodes acting as data concentrators) and that no doubt could be made to work, but why would each utility need to fund its OWN network? It's also not clear why smothering individual OSes with a "universal API" helps reduce costs,
if the need could be demonstrated then this industry needs more of its own "Android-like" platform to build on, but it's not clear that the demand exists for even that. Maybe it would make more sense to "build out" these networks based on existing utilities, maybe it would make more sense to envision other models, for example you might consider something that would look more like the old "pager" systems in reverse (ie a central system COLLECTING small amounts of data when polled), maybe even accessed through the existing cable TV or internet distribution access system. In any event a 14 trillion dollar market looks just about absurdly optimistic.
The money won't be in the hardware, it'll be in the services provided.
I could see home monitoring subscriptions (like your alarm system today). Equipment service contracts. Cloud computing services to aggregate multiple sensor outputs and perform the necessary calculations that the low power sensors would not be capable of.
Definitely a solution looking for a problem, but if there is enough marketing hype, the problem will eventually be perceived.
I don't know that I could get behind such a pie-in-the-sky prediction as $14 trillion without some sound evidence to back it up.
No question about it, though. It will be a huge market with a huge impact on just about everything. There will be plenty of $2.00 or $0.50 mini systems in flower pots, cat collars, greeting cards and pretty much everything else.
But, as Mark stated, much of that probably won't be made by Cisco. A good deal of it will be assembled in some distant no-name factory where labor is cheap.
Even if 50 billion devices by 2020 is a reasonable prediction, to generate $14.4 trillion in sales means an ASP of $288 per device.
Move the decimal place one position to the left and then the 50B unit volume might actually happen.
yeah, I'll believe it when I see it: Cisco heavily involved in low-margin products. Can you think of any company less culturally suited to being the $2 sensor in my flowerpot, or the fitbit/tracker in my cat's collar.
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