The so-called 'Internet of Everything' - which brings together people, processes, data, and things - will create $14.4 trillion (£9.6tr) of value for companies and industries over the next 10 years, representing 21 percent aggregate growth in the profits of all the companies in the world, according to Cisco.
Speaking at the Cisco Tech Editor's Conference in San Jose, the company's president of sales and development Rob Lloyd said that 99 percent of the 'things' in the world today are still not connected to the internet, creating a massive business opportunity for all industries.
"In the first wave of the internet we got up to 200 million connected devices. We then saw the explosion of mobile data - your mobile phone suddenly became another endpoint on the IP network - and we've seen that next wave take us to 10 billion connected devices today," said Lloyd.
With the advent of the Internet of Everything (IoE) Cisco predicts that the number of connected devices will rise to 50 billion by 2020.
The $14.4 trillion in value will be driven by five things - asset utilisation ($2.5 trillion), employee productivity ($2.5 trillion), supply chain and logistics efficiencies ($2.7 trillion), customer experience ($3.7 trillion), and innovation ($3.0 trillion).
Four out of 18 industries make up more than half of the total value at stake. This includes manufacturing at 27 percent, retail trade at 11 percent, information services at 9 percent, and finance and insurance, also at 9 percent.
"Everything as a service embedded in the enterprise allows an agility that we've only imagined up to this point," said Lloyd.
Cisco gave several examples of how data from its Wireless Mesh Network and its Mobility Services Engine can be combined with location analytics technology from ThinkSmart, (which was acquired by Cisco in 2012), in such a way that insights can be derived and subsequently monetised.
For example, Copenhagen Airport is using real-time data from its public WiFi network to track which stores and restaurants customers are visiting and how much time they are spending in each one. The same technology is also used to monitor the movement of passengers through security.
This data can either be sold to retailers within the airport to help them increase traffic to their stores, or be used by airport staff internally to monitor the length of queues and deploy extra security agents where needed to ease congestion and improve customer experience.
Another example is a parking system from a company called StreetLine, which uses sensors embedded in the ground to monitor which parking spaces are occupied. Users can download an app onto their smartphone that will connect with the sensors via a peer-to-peer network to find the nearest available space.
Cisco has deployed StreetLine sensors at its own campus in San Jose, and has also built some middleware that allows user to reserve a parking spot. The company claims that the technology not only provides a better experience for employees, but also rids it of the need for for vallet parking.
"This is one example of the network being agile. In this case the network is determining where the compute needs to occur," said Cisco CTO Padmasree Warrior. "That's the connection being application-centric, and the network having distributed capabilities."
While the Internet of Everything clearly presents a significant opportunity for companies and industries, Cisco warned that there is still work to do around converging the 'things' that are currently sitting in proprietary stacks into the world of open IP protocols.
"Mostly the challenge for us is the legacy protocols and the approach of closedness versus openness," said Maciej Kranz, VP and general manager of the Connected Industries Group at Cisco.
"In the industrial world there are around 50 proprietary protocols that have been deployed there over the years in the refineries or assembly lines. Everybody has their own optimised protocols and technologies. In some ways this is the problem we're dealing with right now."
However, he said that the industry has started to transition to new protocols, and everything is gradually shifting to IP.
"If you went to the Hanover Fair last year you would have seen that all the major players now have Ethernet and IP interfaces. Some of our partners started to ship explosively Ethernet interfaces there as well, so I would say the industry is moving in the right direction," he said.