In the video below, Motley Fool analyst Eric Bleeker talks with Cisco's (NASDAQ: CSCO ) Chris White, who is a general manager of Internet of Things sales at the company.
Cisco has stated that the Internet of Things will create $19 trillion in value across the next decade. While the headline figure is certainly impressive -- it's also easy to dismiss the Internet of Things as "marketing fluff" because it's such a far-reaching technology trend. Chris discusses some use cases around how the Internet of Things is already making an impact, and how far away we are from the full potential of the Internet of Things.
A transcript can be found below the video.
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Eric Bleeker: How would you define the Internet of Things? It's such a big topic. We've got so many readers out there, very interested in this -- the popularity of the phrase is just exploding -- but the first hurdle to overcome is putting this in an easy-to-digest concept for people, right?
Chris White: Right. I think the somewhat glib one-liner is "Connecting the unconnected." Cisco, as a connectivity company that has connected an awful lot of things around the world, is getting pretty excited about 99% of everything on this planet is yet to be connected to the Internet. That's the glib one-liner.
But then, if you look below it and say the price of sensor technology, the use of camera technology, the idea of hyperconnectivity -- and all of us now with an expectation of an app-enabled world -- it's pretty interesting to see what's going on.
Bleeker: That's great. I have to bring up the $19 trillion number. You guys have been very much on a full-court blitz about bringing that out to people and talking about it, so let's just -- $19 trillion is a huge number. As I understand it, that's incremental sales and profitability across a lot of industries.
Could you go into a little more detail? What are you guys seeing when you're talking about the $19 trillion opportunity over the next decade?
White: You're right. Trillions are big numbers. We got excited about billions, and now we're talking trillions. In fact, let me try and see if I can find a slide to help you understand it, because it's a very fair question.
By the way, if we'd had this conversation just a couple of months ago, it was only $14 trillion, and it's now already up to $19 trillion!
Let me walk you into the question.
The idea of connecting things is, "Okay, let's just connect a bunch of things." But where Cisco is taking it is, just connecting things for the sake of things is not really going to help the world, or help us do much. It's just connectivity for connectivity's sake.
The idea, though, is if you connect more things, you generate a bunch of data -- hence the hype around big data. The problem is, big data by itself is just that; a lot of stuff. What process are you going to change to get that data and that information into the hands of people that can make a quicker decision, that can have a business impact on something?
A couple of examples I'll give you -- we had a team up in Alberta, Canada, at the Oil Sands of Canada, with these 400-ton trucks, extracting samples of sand out of the ground. They truck them miles across the icy tundra to a processing plant where they do sampling and check whether it's worth keeping extracting.
The company wants us to put sensors on the scoop of that truck, so you can do intelligent sampling right there and then, and the driver of that truck can make a decision right there and then to say, "Keep digging," or "Stop digging."
Bleeker: Yes. Obviously it's an area where just about any kind of case study is very exciting to hear about.
But if we're talking about maturity of the market, it seems like manufacturing there is some good penetration -- smart mirrors have been around for a decade. If we need to use an over-used baseball metaphor, what inning do you think we're in, as far as changes here?
We're starting to adopt meters, but like you mentioned, then we have to actually make use of this information. How far are we to the end, complete vision that you see for the Internet of Things?
White: Asking an ex-Brit about a baseball analogy is probably a tough enough question...
But in all seriousness, I think we're in early innings here. I think we're at the start of the game. I think the analogy would be, the game has started, and it's starting very quickly. The $19 trillion makes you think of all sorts of future capabilities, but the reality is a lot of companies are already looking at the IP world to help them produce more cups of coffee, to produce cars more efficiently, to save on energy.