Next generation internet is here

 
Annabel Denham
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New technology could generate huge profits for businesses in 2013

IN THE years since the internet’s creation, we’ve grown used to accessing information and data via the web, and to connecting with people through social media platforms. Now, we face a new challenge: becoming accustomed to processes, data and “things” all being connected across the internet in a vibrant and dynamic network. It may sound like the latest tech hyperbole, but this next stage in the internet’s evolution – the Internet of Everything (IoE) – is fast approaching.

Not only will it help people (imagine the convenience of owning a power meter that tells your washing machine to only operate at times of cheap energy), but it is transforming business in a number of ways.

MAXIMISING POTENTIAL
Today, 10bn of the 1.5 trillion things in the world are connected to the internet. By 2022, Cisco expects the figure to reach 50bn. Technological developments – smaller sensors, faster network speeds, and the emergence of cloud computing and big data – are combining to enable the phenomenon. By activating inanimate objects, the IoE gives power to every asset in a business. And better networks can improve employee efficiency and satisfaction by enabling flexible working, or allowing staff to bring their own devices to work.

By acquiring insight into how people use their devices and consume products, firms can maximise profits by “targeting and tailoring products like never before, and improving customer service,” says Deloitte’s chief information officer Matt Peers.

Earlier this year, Cisco predicted that global businesses could generate $14.4 trillion (£9.64 trillion) in value at stake over the next decade by leveraging IoE. It’s an optimistic forecast, and one Peers thinks cannot be proved or disproved. “But what is clear is that companies will need to adapt or they will get left behind and wither.”

The question is how businesses can capitalise. Cisco’s IoE Value Index recommends energy companies focus on the integration of sensor data and predictive analytics, for instance. Retailers could add value by using predictive analytics and rich media to know their customers better.

SECURITY ISSUES
But the challenge for IT departments is colossal. As more things, data, processes, and people get online, the volume of traffic passing through business networks will multiply. IPv6 (the newest revision of the internet protocol) is providing the internet architecture to help businesses adapt. But new equipment, providing greater capacity at lower unit price, will be needed to maintain innovation while keeping costs low.

And companies will continue to grapple with the security implications of wireless networks across company offices. But Cisco found business leaders believe the IoE will help drive better security. Network intrusion and data theft are two of the biggest obstacles. But measures are being put in place to mitigate risk, like firewall management and intrusion detection.

MARKET DYNAMICS
And big businesses might need to watch their backs. Cisco’s survey revealed that, in the UK and globally, business size is not a factor in capturing potential IoE value. So market incumbency is at risk. Andy Hobsbawm, co-founder of software company EVRYTHNG, agrees. “It is a disruptive wave of change that will create new entrants and unsettle, if not unseat, incumbents. YouTube, Twitter, Facebook – these social media platforms were tiny startups. But it is now hard to imagine life without them.”

Peers thinks that diversification will be easier, meaning “lots of opportunities for small companies”. But capitalising on new consumer or company information will be costly. And businesses will still need to have access to the best people to identify patterns in data. “Computers will process the data, but people will still be needed to apply logic and make decisions,” he says.

The IoE is another step in the internet revolution. Hobsbawm likens its power to transform to the railways in America. “The opportunities created by transporting goods over thousands of miles by rail have revolutionised modern business.” He believes the impact of the IoE might be just as transformative.

$14.4 Trillion

Expected global business value at stake over the next decade by leveraging IoE

$613bn
Global corporate profits generated by IoE in 2013

$28.4bn
The amount UK businesses are expected to realise from IoE in 2013