CEO John Chambers touts Internet of Everything as cornerstone of Cisco's strategy, urges business leaders to join push toward open standards and cross-industry collaboration.

Michael Endler, Associate Editor,

February 25, 2013

5 Min Read

With its recent "Tomorrow Starts Here" campaign, Cisco has made clear that it harbors plans for the Internet of Things, the growing population of data-sensing, Internet-connectable objects that range from iPhones to smart meters. On Feb. 21, CEO John Chambers revealed just how big those plans are.

"We're all in. We're making this our cornerstone of our campaign to become the number-one IT company," Chambers said, speaking to an audience of international executives assembled at Cisco's San Jose, Calif. campus. "It isn't a billion-dollar commitment. It's way, way beyond that in terms of the resources and time we're going to put behind it."

Objects equipped with processors, sensors and the ability to connect to the Internet have proliferated in recent years. From personal electronics devices such as mobile phones and tablets, to televisions, refrigerators, swimming pools, railroads, cars and the components of smart cities, these devices have increased, by Cisco's estimate, from 200 million in 2000 to over 10 billion today. In Cisco's view, society's ability to benefit from the data these devices collect will be dictated by how the devices are networked.

The company calls its vision for such a network "The Internet of Everything," and the plan already involves many of Cisco's recent projects, such as its location-based analytics service for retailers. The networking giant's futurists have also spoken to the concept's implications, balancing the vaguely dystopian notion that humans will be "nodes on the network" against the promise of 300-year lifespans and universal access to education and healthcare.

When he spoke last week, Chambers offered an even more persuasive prediction: the Internet of Everything could be worth more than $14 trillion in profits to the global economy over the next decade alone. His listeners had come to participate in a steering committee for a Cisco-proposed Internet of Things World Forum to be held this fall, and the CEO used his speech to sell attendees on his company's vision, which emphasizes open standards, cross-industry participation and speed to market.

Calling the Internet of Things "the next fundamental change in the whole IT industry," Chambers cautioned against a proprietary approach. "It's not, 'How do I get the majority of the pie?'" he said. "Cisco's view is, the quicker you make the pie bigger, the more everyone wins." In other words, companies that produce objects that speak their own languages and cannot easily interface with other objects or software will be needlessly duplicating one another's R&D expenses while limiting what can be done with collected data. But if standards and regulatory concerns are aggressively addressed through collaboration, players can focus on killer applications that transform entire industries.

In advocating his stance, Chambers frequently cited Cisco's Smart Grid project. He said the endeavor got off to a slow start because Cisco did not fully grasp regulatory complexities and because the company's initially proprietary approach hindered its ability to collect comprehensive data. When an attendee asked Chambers how the Internet of Things should be judged in light of sluggish Smart Grid activity, the Cisco chief expressed confidence that the project's move to an open standard approach would pay dividends.

"This is not a statement of intent, so it has all the typical caveats that I must say as a CEO about our stock and our performance, but this is an area where I'd be shocked if we don't grow 100% per year for the next five to seven years," he said.

Chambers struck an accessible, conversational tone, moving among audience members as he spoke and encouraging an open dialogue. Still, he constantly reminded attendees of the stakes involved. Cisco conservatively estimates there will be 50 billion connected devices by 2020, he said, and this growth could produce 2% annual profit boosts for "every company in the world" over the next 10 years. The company provided attendees with a white paper produced in collaboration with research firm McKinsey, and Chambers referred to it frequently, describing the trillions in revenue that could result from smarter factories, more efficient energy use and new ways of engaging customers.

Though much of the discussion revolved around the Internet of Things as a landscape-altering force of commerce, Chambers also mentioned benefits to society, such as the potential for remote healthcare workers to treat patients in underserved nations. His biggest message, however: Time is of the essence.

Chambers characterized the Internet of Everything as the fourth major evolution of the Internet, following the advent of email, the emergence of e-commerce business models during the 90s, and the rise of social networks and cloud computing over recent years. He noted that each phase was shorter than the one that preceded it and predicted that the Internet of Things would pick its winners and losers over the next three to four years. Mobile devices and big data technologies have brought society to an inflection point, he said, and now is the time to act.

To get started, Chambers recommended that attendees focus on business models rather than technologies, and that the models emphasize industry-wide cooperation. The focus, he said, should be on connecting people. "If all you do is automate, if you don't change the process. You get a third or a fourth the value."

Cisco isn't the only player interested in shaping the Internet of Things. Intel, for example, has announced plans of its own, and both an Internet of Things Consortium and an Internet of Things Architecture Forum have already been established.

It isn't clear if Cisco will succeed in bringing everyone together for one discussion, but those who participated in Cisco's steering committee seemed convinced of the Internet of Everything's potential, if a little unsure how to tackle a project of such scope. When Chambers asked, virtually everyone in the room indicated that they would participate in an Internet of Things World Forum later this year.

Cisco plans to release more details in March, but the event is tentatively slated to be held in October at a site in Europe. Steering committee members agreed that the World Forum should be held on a different continent each year in order to encourage the Internet of Everything's global reach.

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About the Author(s)

Michael Endler

Associate Editor,

Michael Endler joined InformationWeek as an associate editor in 2012. He previously worked in talent representation in the entertainment industry, as a freelance copywriter and photojournalist, and as a teacher. Michael earned a BA in English from Stanford University in 2005 and, pending the completion of a long-gestating thesis, will hold an MA in Cinema Studies from San Francisco State.

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