Cisco Systems Inc., IoT, and the Connected Car

Give Cisco credit: It has grabbed a lot of mindshare around the Internet of Things by rebranding it the Internet of Everything. It also helps that CEO John Chambers made headlines by calling IoT a $19 trillion global opportunity over the next decade.

A big part of IoT is the connected car. Yes, fellow Fools, it's the Internet of Cars.

I had the pleasure of chatting with Andreas Mai, Cisco's director of smart connected vehicles, at the recent Connected Car Conference in New York City. In this video, he talks about what is needed to achieve the much-hyped benefits of the Internet of Things, and actually quantifies the benefits to society for each connected car on the road.

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Rex Moore: Andreas Mai says the connected car is the perfect example of why Cisco refers to the Internet of Things as the Internet of Everything. He says four things must be done to actually generate the benefits of IoT.

Andreas Mai: No. 1 you need to connect things. You need to connect vehicles -- you need to connect vehicles with traffic lights, with parking structures, with signs -- to start with.

The second element is you need to connect data -- pools of knowledge. For instance, if you are driving on a road and you need to understand how good the drivers are driving in those cars, you need to understand how dangerous this particular stretch of road is. You need to understand how healthy the operation of this particular vehicle is. And if you combine these pools of knowledge, you can suddenly identify whether you are at high risk or at low risk to crash.

Moore: Andreas says we must also connect processes -- for example, the diagnostics process of remotely monitored vehicles must be able to bubble up issues within a company.

Mai:You need to connect the quality department with the warranty department with the dealership organization with the supplier organization that may have supplied a particular part. That's the connecting processes element.

And the last thing you need to do is to connect people, because people need to act on this. So, on the push of a button, you need to be able to get the right people into a meeting to resolve an issue.

Moore: So what is the potential of the Internet of Cars? Andreas says it's tremendous, and has actually quantified it on a per-vehicle basis. His explanation is fascinating.

Mai: We've done a study where we came to conclude that each vehicle we connect generates benefits in the range of about $1,400. Five hundred and fifty dollars ($550) is for the user -- you and I -- driving a car. We spend less money insuring the car because the car is less prone to crashes. We spend less time operating the car, because we hopefully will also spend less time in congested traffic situations.

The second [beneficiary] is society -- all of us -- because there is the cost of crashes [from] all of us which amounts to about $420. Congestion is another element that costs us money. The operation of the road system is another element that costs us money and the value we can generate by connecting the vehicles with the infrastructure is about $420.

Moore: Benefits also accrue to the automotive industry itself, through much better relationships with customers -- think remote diagnostics to quickly catch problems, and over-the-air software updates ... something Tesla is doing even now.

Mai:And the last, but certainly not least, important element is we see the emergence of many start-ups that make a business out of the ability to connect to the vehicle. You see parking start-ups. You see start-ups that do multimodal travel planning. Start-ups that reinvent the accuracy of traffic information that we can all benefit from.

Moore: Many, many industries are going to feel the effects of the connected car -- some for better, some for worse. I'll have more about which industries are affected most in my next video.

Reporting from the Connected Car Conference in New York City, I'm Motley Fool analyst Rex Moore.

The article Cisco Systems Inc., IoT, and the Connected Car originally appeared on

Rex Moore has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems and Tesla Motors. The Motley Fool owns shares of Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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