Summary Bullets:
- For all the hype surrounding it, tying the Internet of Everything (IoE; much less the Internet of Things, IoT) to network infrastructure solutions or revenues isn’t straightforward
- Ultimately, “connecting the dots” requires a broader view about what an increasingly connected society means in terms of data creation, data analytics, data security, etc.
- That applies to network vendors, but also any service provider who hopes to profit from these trends.
Last week, Cisco announced its fiscal 2014 financial performance and results. If you own Cisco stock or care about its viability (say, because you have deployed a lot of Cisco gear), you probably know the highlights already: non-GAAP revenues were down 3% over 2013 while net income remained stable; service provider revenues were down; security revenues were up; new IoE momentum was registered in municipalities ranging from Hamburg, to Kansas City, Copenhagen, and Barcelona.
What you probably don’t know is how (or if) this momentum contributes to Cisco’s financial successes and failures.
To be fair, making this translation is no easy task. IoE is still very much in its infancy. Perhaps more importantly, it’s a big topic. Super big. Too big to fit into any one reporting bucket.
To be sure, IoE has many, varied dimensions. Think devices like wearables and vertical-centric solutions like industrial sensors or municipal analytics. Think data connectivity – wireless or wireline, carrier or enterprise provisioned. Think data security, data storage, and data analytics. Think the business consulting services needed to help carriers and enterprises make sense of this all. Cisco’s been more vocal than any other vendor in terms of highlighting this breadth. Going forward, then, Cisco – or any other vendor with IoE aspirations – needs to explain the role IoE is playing in every relevant business they play in. How is IoE being monetized? Is IoE driving data analytics revenues? Routing revenues? Data security services or platforms? If not, why? Is the market not ready? Are the products and solutions not ready? Explaining the exact contribution of IoE to GAAP (or non-GAAP) revenues may never be possible, but explaining how it contributes should be. If nothing else, this type of messaging will be key for helping service providers understand the things they need to be thinking about (and buying) if they want to execute on the IoE opportunity.
But, there’s another story here for service providers.
It’s easy to think of IoE or IoT in very narrow terms. We’ve seen this when talking to cellcos about wearables (one component of IoT). For some, the wearables opportunity is nothing more than the money to be made by selling high-margin accessories at retail, alongside bigger data buckets. For others, the opportunity is much broader, encompassing the varied aspects and enablers of IoE business models. Luckily, there should be vendors who think about IoE in the same broad terms and are ready to help support them.