Cisco Launches Business Unit For Internet Of Things

If you've watched much primetime television over the last several months, you may have seen Cisco's "Ambulance" commercial, in which paramedics already know an injured cyclist's identity, medical history and doctor by the time they reach him -- all because the biker's helmet was able to "talk" to the ambulance. The ambulance driver is even able to "speak" to traffic lights as well, telling them to give his vehicle a clear path to the hospital.

The ad represents just one potential benefit of the Internet of Things (IoT), which broadly describes the concept of connecting ordinary objects into networks in much the same way the traditional Internet connects websites. Earlier this year, Cisco CEO John Chambers said the IoT could inject $14 trillion into the global economy over the next decade -- enough for every company in the world to grow its profits by 2%.

At the time, Chambers was pitching executives from major companies and institutions on the idea of an Internet of Things World Forum. Eight months later, the World Forum opened this week in Barcelona with more than 800 attendees.

[ Cisco's CEO talks vision, strategy and overcoming "bumps in the road." Read Chambers: Cisco Will Win Tech's Next Elimination Round. ]

Much as it has positioned itself as the network backbone for video and VoIP, Cisco sees its gear facilitating the connections that make IoT possible. As part of the event in Barcelona, the company announced several initiatives to accelerate IoT growth across industries, including more information about its newly formed Internet of Things Group.

Before the World Forum, Cisco had made IoT an explicit part of its agenda, introducing products that included a new more programmable network architecture optimized for a world of connected devices.

In an interview, Cisco VP Guido Jouret, who is also GM of the new group, said that despite these ongoing efforts, Cisco needs an IoT-focused branch because the concept entails so many unique challenges. The group's goal is to "help connect the unconnected," Jouret said, noting that only around 1% of devices are currently linked up and that connecting the others could be difficult. It's easy enough to connect a phone or television to the Internet, but IoT equipment operating on an oil rig would require more delicate considerations, such as ruggedized designs to withstand the elements.

Intelligent data management is another challenge. Devices can be equipped with sensors just as easily and cost-efficiently as they can be connected. These sensors enable applications ranging from pedometer apps in smartphones to traffic light cameras that collect demographic information about passersby. But all this data is useful only if one has the algorithms to intelligently crunch the numbers.

"It's not a purely academic problem, not just statistics and correlation," Jouret said, adding that it's also a challenge to determine which devices can become more useful when connected. "[IoT is] not about connecting alarm clocks to coffee machines."

But in these post-Snowden days, security might be the most pressing issue IoT raises. Jouret said that in many ways, IoT can strengthen security and accommodate new techniques by distributing intelligence to the edge of the network. Industrial control systems that manage power plants and other public infrastructure are often criticized as woefully vulnerable to attack, he pointed out, but they could be made both more efficient and more secure by IoT.

Devices that collect user data should be subject to public debate, Jouret said, noting that such technology will need to be transparent and should often rely on opt-in policies.

Still, he foresees big ripple effects as society absorbs more sophisticated connected products. Jouret mentioned that Google's driverless car has a better road record than many human motorists. At some point, he said, insurance companies might charge people more to get behind the wheel themselves than to let the vehicle do the driving for them. "Will we need as many cars [if that happens]?" he asked. "Will cities encourage people not to get cars? To share one? Call one on your phone? What will it mean for taxi companies?"

Technology has posed similar disruptions throughout history, Jouret pointed out, predicting that IoT will create new jobs as it makes others obsolete. "Years ago, who knew we needed things like search optimization companies?" he said, adding that IoT's potential is even bigger than the conventional Web's because IoT can impact virtually every industry in the world, from agriculture to mining to retail to health care.

Cisco said in June that IoT technologies had already generated $613 billion in corporate profits in 2013. Other large companies, such as General Electric, are also on the IoT bandwagon. Still, it remains to be seen both if the technology will accelerate fast enough to fulfill Chambers's expectations.

One goal of the World Forum, for example, is to unify IoT projects around common standards. When he spoke earlier this year, Chambers said open standards are necessary if a rising IoT tide is to raise all ships; otherwise, proprietary squabbling could impede growth. Jouret said Cisco is making progress with partner companies and has participants across 40 standards bodies.