Cisco Bets US$1bn on UK Internet of Things Market

The energy sector is one of the top four Internet of Things opportunity sectors in the UK.
Published: Thu 13 Aug 2015

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The Internet of Things – transforming into the Internet of Everything – is fast becoming a reality as businesses, consumers and devices become more digitally interconnected.

The energy sector is a prime example, with smart meters and sensors in the grid and buildings opening the way for applications such as advanced energy and grid management and a whole range of new services for consumers and businesses.

IoT energy sector drivers

A new report from Cisco identifies three drivers for the Internet of Everything in the energy sector. These are:

• Data management and analytics, with energy applications able to generate huge amounts of data, at both production and demand ends of the chain. Big opportunities exist in several key areas, such as transporting that data securely and efficiently across long distances in the absence of traditional networks, or in new methods for analysing building performance data.

• Asset tracking, with energy industry assets expensive, remote and difficult to track across long distances. Several start-ups are already focusing on continuous monitoring of assets, using RFID and other sensor-based technologies.

• Collaboration, with sharing knowledge and data critical to the future of the industry. Companies in different parts of the world need to share expertise and energy suppliers need to communicate credibly with householders and businesses.

Focussing on the UK, Cisco estimates that from smart meter applications to home monitoring devices, renewable energy integration and electric vehicles, the Internet of Everything offers a £7.5 billion opportunity over the next decade. This is fourth behind healthcare with a massive £48.5 billion opportunity over the period, retail not far behind at £37 billion and transport at £10.4 billion.

“The scale of [IoE] activity is almost unimaginable,” states Cisco’s Phil Smith, chief executive UK and Ireland. “Today, around a billion devices are connected worldwide – which is still less than 1% of the potential total. At Cisco, we believe that number will grow to 50 billion by 2020. From buildings to buses, energy grids to elephants, everything is being connected.”

Cisco advises that winners in this sector will need to provide real value rather than just clever ideas. This should be a critical takeaway for anyone considering an IoE startup in any sector.

US$1 billion for UK IoE

Putting its money where its mouth is, Cisco has committed over US$1 billion to the IoE in UK over the next three to five years. The multiple projects include investments in education and skills initiatives and a major extension of Cisco's British Innovation Gateway programme, which is aimed to help foster and nurture UK innovation and entrepreneurship. An amount of US$150 million will support Internet of Everything UK start-ups and venture capital equity investments focused on smart city development and other key priorities for Cisco and the UK, including the financial technologies, retail and healthcare industries.

This follows a US$500 million commitment by Cisco in 2011, which the company believes has contributed in excess of $5 billion in technology and manpower to the UK economy.

£10 million for smart cities in UK

The British government is also supporting IoT with the Department for Culture, Media and Sport and the strategy body Innovate UK launching a £10 million competition for a single collaborative research and development project to demonstrate the capability of IoT in a city region.

Projects must be collaborative and must provide specific benefits for citizens, the city region and the environment as well as economic benefits for businesses and local authorities, both during and after the initial trial.

The competition is part of a wider £40 million government investment in IoT announced in March 2015. Examples of IoT at work in UK cities include smart lighting and sensing allowing gathering and sharing information on air quality and noise pollution levels, and data collection from traffic and road sensors helping to ease congestion and reduce emissions.

Further reading

Cisco: The Internet of Everything: Unlocking the Opportunity for UK Startups