#Smart Communities Journal March 2013


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#SmartCommunities as a hashtag reflects our belief that ICT is a key tool for communities - regardless of their characteristics - to serve citizens more efficiently and in a sustainable manner. This Journal gives an insight in the evolution of smart communities and in the business opportunities behind them.

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#Smart Communities Journal March 2013

  1. 1. V O L U M E J AN/ F E B 2 0 1 3 ISSUE 1#SMARTCOMMUNITIESJanuary / February 2013 #SmartCommunities #SmartCommunities as a hashtag reflects our belief that ICT is a key tool forInside This Issue communities - regardless of their characteristics - to serve citizens more1 #SmartCommunities efficiently and in a sustainable manner. Communities are defined by a broad variety of traits; from rural or urban living spaces, permanent or3 Verticals temporary membership via social networks, commercial or private10 Cloud, Networking & Our objective with this journal is to aggregate a selection of our analysis on Computing the various ICT building blocks in a #SmartCommunities network. We will discuss the evolution of big data, cloud computing, mobile technologies,12 Big Data long- and short-range network infrastructures, and their role in key industries13 Connectivity for the communities we live in such as health, transport, and energy. We will16 Market Views also highlight key industry perspectives and government initiatives that drive research and innovation in these areas. With all of this, we hope to give you21 Editorial Board insight in the evolution of smart communities and in the business opportunities behind them. Saverio Romeo Industry Manager, Telecommunications and Connected Public Sector Building Blocks in #SmartCommunities We are seeing a true #martCommunitiesetwork convergence of industries in #SmartCommunities. How will ICT evolve to adapt to this new environment?
  2. 2. PAGE 2 #SMARTCOMMUNITIESVerticalsICT tools are crucial for the transformation in such verticals as Healthcare,Energy and Transportation Regulating Mobile Health Apps in Europe, Mark Hickey ICT achieves a Smart Energy Future, Yiru Zhong Mobile Apps for Smart Cities and the Energy Sector, Shuba RamkumarCloud, Networking & ComputingSoftware is increasingly becoming crucial in terms of services andapplications, but also on how those are delivered and served to the enduser. We will explore the evolution of technologies in cloud computing andnetworking with a particular attention on how software is changing theseareas. In this issue, we will discuss the state of art of cloud computing in theEuropean public sector. Cloud Services in the European Public Sector – Moving Beyond Fragmented Adoption, Saverio RomeoBig DataData is becoming the lifeblood of any industry. We will explore how big datais used in relevant vertical industries for smart communities, and how bigdata analytics can support business and government decision makingprocess. In this issue we will explore the role of customer data analytics in theretail energy sector. The Importance of Customer Data Analytics in the Retail Energy Sector, Yiru ZhongConnectivityConnectivity is the essential building block for smart communities. We willexplore the role of super fast broadband and mobile communicationsnetworks. But, we will also look in great details at machine-to-machinetechnologies and short-range wireless solutions. We will analyse all this from atechnological perspective and from a market perspective. In this issue, welook at the entrance of Huawei in the M2M market. What to Make of Huawei’s Entry into the M2M Market in Europe? Yiru ZhongMarket ViewsThe points of view of industry participants is very valuable for a betterunderstanding of technological and market evolution. In this session, one ofour analysts we will discuss key topics with relevant market players or willprofile companies that are performing well in market and technologicalterms. In this issue, Saverio Romeo talks with Qualcomm Life abouttelehealth. The Evolution of Telehealth in Europe – The Point of View of Qualcomm Life, Saverio RomeoContact Us
  3. 3. #SMARTCOMMUNITIES PAGE 3 Verticals Information and communications technologies (ICT) are the critical enabler ICT tools enable the for modernizing industries and public service provision. This section considers transformation in such how this can happen. In this first issue, we look at the role of mobile verticals as Healthcare, applications in the healthcare space and the associated regulatory aspects. Energy and We then explore the role of mobile applications in the energy industry. Transportation Regulating Mobile Health Apps in Europe By Mark Hickey, ICT Research Analyst January 2013 Rising incidence of chronic disease, an ageing population, and financial The European mobile pressures on healthcare systems combined with a mobile penetration rate of health market will reach over 100% and relatively high income levels give Europe a unique position to €2.45 billion in 2016 become a leading market for mobile health (mHealth) apps in the future. Frost & Sullivan estimates that the European mobile health market will reach €2.45 billion in 2016. Current Regulations Regulation of apps is a complex issue not just because Europe has different regulatory environments at the national and the European level, but also because it is unclear as to when a mobile app should be classified as a medical device. At the EU level, medical devices fall under one of two directives. The first is the Medical Device Directive (Directive 93/42/EEC) a wide ranging directive that covers every medical device from bandages to x-ray machines. The second is the In Vitro Diagnostic Medical Device Directive (Directive 98/79/EC), which covers the examination of specimens derived from the body including reagents, instruments, and specimen receptacles. For example, reading the glucose levels of a blood sample using a smartphone. According to Directive 93/42/EEC medical device means; Any instrument, apparatus, appliance, material, or other article, whether used alone or in combination, including the software necessary for its proper application intended by the manufacturer to be used for human beings for the purpose of: Diagnosis, prevention, monitoring, treatment, or alleviation of disease Diagnosis, monitoring, treatment, alleviation, of or compensation for an injury or handicap Investigation, replacement, or modification of the anatomy or of a physiological process Control of conception
  4. 4. PAGE 4 #SMARTCOMMUNITIES And which does not achieve its principal intended action in or on the human body by pharmacological, immunological or metabolic means, but which may be assisted in its function by such means. Accessories to medical devices also fall under this regulation. The manufacturer in this case is the app writer, not the device manufacturer or app store. Phones marketed as communication devices are clearly not intended as medical devices, notwithstanding the potential impact on patient health when facilitating effective communication of medical information, currently distributors (e.g. iTunes) are exempt from medical device regulation. The Grey Areas Considering a product’s intended use in conjunction with the above criteria should enable an app writer to decide with reasonable clarity There is a difference in whether their app falls under the regulation or not. However, a grey area regulatory treatment for has emerged in the boundary of a general ‘wellness’ app and diagnosis of mobile apps targeted treatment or disease: under what circumstances might an app intended at patients and for general wellness become subject to medical device regulation? For medical professionals example, if an app intended for Health and Fitness measures one’s heart rate, it could arguably, if integrated into a diagnosis or treatment regimen, be classified as a medical device. Here it is important to break up medical apps into two categories. The first is apps aimed at patients and the second is apps for medical professionals. Apps designed for patient use are currently not evaluated for accuracy or safety by any regulatory organization. They are made directly available to any smartphone user without any strict criteria that would clearly distinguish them from other apps. Sometimes apps that are described as - and are listed in the app store - as medical include information in the description stating that the app is intended for entertainment purposes. If patients become reliant on apps to help them manage chronic conditions any failures could have serious consequences. For example if an app meant to remind users to take their medication experiences technical issues a consequence could be the user missing a dose and triggering a medical emergency. The benefits of establishing regulations that ensure users are fully informed of the intended use of an app and are safeguarded against being misled are obvious. On the other hand, medical professionals are better qualified to make judgments on the use of apps in a treatment regimen or as support for the provision of healthcare. They are accustomed to new technology being introduced into their field and can be trusted to evaluate the usefulness of mobile apps in relation to specific conditions. However, adopting a set of standards on things like technical specifications, definition of characteristics, and specific criteria to ensure that a product is fit for a purpose could be a useful point of reference for medical professionals that operate under the same EU device regulations, but work in different healthcare systems. A similar standard is the International Organization for Standardization’s standard ISO 14971:2007(E), which contains requirements that provide manufacturers with a framework in which experience, insight and judgment are applied systematically in order to manage the risk associated with the use of medical devices.
  5. 5. #SMARTCOMMUNITIES PAGE 5 Conclusions Providing clarity and assurance that products are fit for purpose while not ICT must engage in stifling the path of innovation is a difficult challenge for regulators. However, regulatory discussions to the benefits of mHealth are to be believed, it is an issue worth addressing pave the way for almost immediately. App writers will bear the bulk of the regulatory building a trusted and responsibility, but as medical apps become a bigger component of approved brand in a healthcare, the regulations may require post market maintenance, version control, surveillance, reporting of adverse events, and a system for growing mHealth corrective and preventative actions. Here, app distributors and perhaps market in Europe phone manufacturers will have an important role in relaying the information to the necessary regulatory body. While this is more work for app writers and distributors, customers will come to expect that apps listed as medical are safe and fit for use, and this could be viewed as an opportunity for distributors to engage with regulatory bodies and capitalize on the opportunity to become a trusted brand in the field. In summary, more clarity is needed surrounding what can and cannot be classified as a medical device. The current revision of the medical devices directives by the European Commission offers an important opportunity for this. As the use of mHealth apps becomes more pervasive, and the capabilities of smartphones and tablets increase, engagement of all stakeholders (app writers, app distributors, medical professionals, and phone manufacturers) will be necessary to ensure that the appropriate safety and efficacy standards are adhered to from product conception, to distribution and consumption and post market surveillance. While this will be a challenge to stakeholders, it can also be viewed as an opportunity to present one’s self as a trusted and approved brand in a market that is experiencing very promising growth. ICT achieves a Smart Energy future By Yiru Zhong, Senior Industry Analyst November 2012 The proportion of ICT spending has traditionally been small compared to that of energy systems in a utility company’s assets topology. Prior to 2000, the industry average of ICT spending was no more than 5 % of a company’s total capital expenditure (capex) and no more than 10 % in the last 5 years. The role of ICT, however, becomes more vital as the energy sector operates in a world with scarce raw resources, rising costs and increasing environmental constraints. Adding intelligence and communication links to energy assets is the way forward - ICT is the enabler of this solution, of connecting previously remote assets to the backbone of the grid, of adding intelligence to previously dumb assets, and of facilitating better, proactive or self healing decisions of energy assets. Frost & Sullivan’s ICT in Smart Energy Research Practice predicts a growing weight of ICT spending in overall capex, with the share rising to 15-25 % by 2030.
  6. 6. PAGE 6 #SMARTCOMMUNITIES Legislation drives investment certainty The clearest and strongest driver for increased ICT investment into the energy sector is the need to comply with legislation. This gives a certainty in timings and scope of smart grid projects in North America and Europe, as reflected by smart metering projects. The European Union (EU) requires Smart grid projects with member countries to deploy smart meters to at least 80 % households by allocated investment 2020, provided it is economically sensible to do so. Looking at the bigger funds are mostly in countries in the EU, countries such as the United Kingdom, France and smart metering Spain have smart meter deployment trials and plans in place. Both energy deployments because and ICT sectors base these large scale rollouts in the next 2-4 years as their primary scenarios. Other larger countries such as Germany and Poland of clear timelines and currently have a less certain timescale or scope of these projects; although milestones the former will have a better visibility of timelines and scale by June 2013. When more certain legislation is in place, however, the timings and scope of smart grid projects allow energy companies to prioritise and define their investments. One of EU’s 20/20/20 requirements is to increase the share of energy consumed from renewables to 20 % by 2020. This pushes Generation Companies (GenCos) to actively investigate ways to fulfil this requirement and influences Transmission and Distribution System Operators (TSOs and DSOs) to consider the implications of integrating this new technology. As such, the flow of smart grid investments can be seen mostly from GenCos, DSOs and TSOs as they explore the first phase of ICT solutions similar to that in any green- or brown- field deployment. Follow on ICT investments are necessary as companies consider adding more intelligence deeper and wider energy assets until all stakeholders, including the energy customer, are included in the grid. Internal operational efficiencies drive innovative ICT investments Outside of legislative When energy companies are not compelled to make an investment, their drivers, energy capex is driven by operational efficiencies. This implies different investment priorities and thus presents a more diverse ICT opportunity. For example, companies invest in ICT energy companies in Southeast Asia are more interested in capturing to achieve tangible accurate meter readings for their Commercial & Industrial (C&I) customers. business benefits; This suggests a greater emphasis on software and applications that more Customer relations efficiently read, bill and invoice a customer. While there will be a need for management ICT tools communications services such as unified communications or an integrated in Southeast Asia and customer service management for a customer call center, there is limited potential for grid data scope for new infrastructure rollout as could be required in Europe. analytics in Japan Energy systems in Japan are already highly automated and prior to the Fukushima nuclear disaster, rarely faced generation energy storage issues. The fallout was so significant that it changed investment attitudes completely. For example, TEPCO now has an accelerated plan for smart meter deployment to households. Only 1 million households have a smart meter; TEPCO’s target is to deploy 17 million by 2022 to allow household to see their consumption. With a greater risk of imbalance between demand and supply post Fukushima, TEPCO now has a great appetite for wider automation across all functions but especially at the household level. A pressing need to enable Demand Response will boost ICT investment that processes and utilises the greater volume of data flows across a wider spectrum of stakeholders.
  7. 7. #SMARTCOMMUNITIES PAGE 7 Learning from the disaster, we predict the sector will actively consider a higher density of sensors to further integrate the information flows with the energy grid. In such an event, there will be a strong need for a secure internet capable of processing large amount of data from sensors to computing servers. The future ICT architecture in Smart Energy will look very different The different patterns of investment reflect the industry’s opinion that no one knows what the future of smart energy will look like. We predict the energy Frost & Sullivan expects sector to be one of the first industries to embrace the concept of Internet of greater application of Things. Any object that can be connected and makes sense to be grid/meter data to connected will be so. This ensures both energy and information flows are interact with customer processed to constantly optimise the energy grid and enables all data to fully optimize stakeholders to make the best possible decision. In the wider context of benefits of a Smart Grid #SmartCommunities, there will be interoperability with such networks as broad as urban transport systems and as small as home area network that manages a household’s energy, entertainment, security and communication needs. Such interoperability implies only one thing – greater adoption of ICT solutions. Mobile Apps for Smart Cities and the Energy Sector By Shuba Ramkumar, Research Associate, February 2013 Companies and governments are realizing the importance of offering Mobile apps empower mobile apps as a value-added, personalized service to their customers. the digital citizen in Mobile apps enable users to efficiently access resources, make informed #SmartCommunities decisions, and offer valuable feedback. These tools can also help users and providers develop a smarter city. Mobile apps have improved service, particularly in the transportation, tourism, environmental, and public sectors. The energy sector, which is an important component of a smart city, offers mobile apps for integrating the end user into the grid. Mobile apps for the Energy Sector: Empowering the end user Energy sector customers once were unaware of details about usage, wastage, and pricing. Today, though, utilities are investing in customer relations management tools as customers become interested in minimizing energy costs. Some of the most commonly used energy apps focus on individual consumption or on how much energy electronic devices use. Energy utilisation apps can: • Provide visibility of consumption and usage: Calculate usage and consumption of a household’s energy upon entering manual data from electricity meters. These apps include Meter Readings and Wattulator. The British Gas app and the Electric Ireland Meter Reading app allow consumers to electronically collect and submit meter readings to the utility to help them better understand the billing process.
  8. 8. PAGE 8 #SMARTCOMMUNITIES• Encourage habit of energy efficiency through “gaming” mentality: Motivate customers to use energy efficiently. Some offer advice on how to cut electricity bills, or compare energy consumption within a social network. The Powercents app for the province of Ontario, Canada notifies users about utility price changes and suggests shifting usage to off-peak periods. The iGo Vampire Power Calculator details the costs of electronic devices’ excessive energy use. People Power 1.0 and Opower’s Social Energy App are built for social networking, so users can share, compare, and compete based on their energy consumption data. Extending the personal smartphone screen for Home Energy Management solutions (HEM): Monitor energy usage of electronic devices as part of a HEM system. These apps let users remotely control electronic devices such as the thermostat, air-conditioning, and lighting. Control4 MyHome, Ecobee Smart Thermostat, and Lutron Home Control+ are a few examples. Mobile apps are extremely commonMobile apps for the Energy Sector: Adding mobility to remote workers tools for adding mobilitySeveral apps cater to energy sector workers. The Energy Services Mobile App to business processesby Enbase helps improve productivity and operational efficiency in the field.Similar apps are available for the oil industry, including the InSite AnywhereMobile Service by Halliburton, which helps keep teams updated on real-timewell construction and completion processes. Numerous mobile apps help incalculating drilling operations. Other apps provide general news about theenergy industry, such as Energy Global and Energy Intelligence, and detailsabout fuel and energy stock prices, such as Pricelock.Energy providers and consumers can benefit from interactive andinformative apps. These can contribute to the overall efficiency of theenergy sector, which is important for the development of a smart city.Mobile Apps for Smart City CitizensMany cities are also equipped with apps for services such as transport,participative governance, environment, and tourism. Providing these in auser-friendly, creative platform is an important feature of a smart city.Mobile app development is a component of several smart city initiatives inEurope. The Amsterdam Smart City project has app developers working onsolutions for safety, mobility, energy, and tourism. The Code4EU project isdeveloping apps for several European cities. The Barcelona City Council hasdeployed several apps developed by international IT services company Atosas part of its MyCity solution.Apps that promote smart cities include: Transport service apps. These are mostly location-based apps that provide information about navigation, real-time traffic, public transport schedules, or parking spots. HopStop, Öffi-Public Transport Buddy, and Citymapper help plan journeys, provide navigation options, show transport schedules (buses, trains or taxis) and make price comparisons. Parker and m-Parking (a MyCitysolution) help users find and pay for parking spots. Wheelmapand similar apps have been developed to show accessibility points for wheelchair users in underground stations, museums, cafes, and other public spaces.
  9. 9. #SMARTCOMMUNITIES PAGE 9 Tourism apps. Time Travel Explorer, available in London, provides historical information based on a user’s GPS location. The Walk and Feel app helps visitors to Helsinki download information on history and sights as they follow a mobile-guided pedestrian path. Environmental apps. Pollution is a geo-local app that shows alist of pollutants present in a user’s surroundings. NoiseMeter measures noise levels using the microphone on asmartphone or tablet. Participative governance apps. These help governments reach out to citizens. Smart Recycling, an app introduced in Spain in 2012, helps users Mobile apps engage find the nearest recycling centre, which they can share on a social networking Website. Citizen Mailbox is a GPS-based app offered by the citizens. But what is the Barcelona City Council to give citizens a voice in city administration. next step? How do you FixMyCity and FixMyStreetlet people report local problems, such as graffiti harness the vast and broken pavements, on a mobile device. amount of data to deliver improved living? Stakeholder apps such as those targeted at drivers and citizens. Give feedback to drivers. Green Meter, an eco-driving app, provides statistics on a vehicle’s fuel consumption with real-time feedback on the environmental impact of driving. Measure data for electric vehicles. As the electric vehicle (EV) adoption rate rises, EV apps provided by charging station owners and automobile manufacturers are becoming common. The Green Charge app, compatible with the Nissan Leaf, Toyota Prius Plug-in, and Chevrolet Volt, shows a vehicle’s battery status and informs the driver about other financial and environmental costs. The Chargepoint app, offered by the Chargepoint network of charging stations, gives information on the location of stations and the status of charging sessions, with options to make reservations. Encourage carbon footprint reduction. In line with the European Union climate change regulations, public institutions are encouraging citizens to reduce their carbon footprint. The Joint Research Centre for the European Commission has developed the MobGAS app, which is available for 27 countries in 21 languages. This app shows the impact of an individual’s daily activities on greenhouse gas emissions and offers suggestions for improvement. The market for mobile apps for smart city services is burgeoning. An important driver for improving mobile apps of this kind is the presence of big data. In this case, big data refers to a vast amount of collected information including residential and commercial electricity use, fuel consumption, noise levels, real-time traffic, and public transport. The ability to absorb and retain real-time data to provide insight via apps is an important value-added service. At the same time, apps can contribute to the database of public services. Data collection on a large scale requires industrial grade devices, such as smart meters at homes and commercial buildings, and sensors for collecting environmental information.
  10. 10. PAGE 10 #SMARTCOMMUNITIESHowever, obtaining and using such data causes privacy concerns. An evenbigger challenge is the vulnerability of these systems to attacks. Strongerregulations and investment in IT systems that protect customer privacy andsafeguard the reservoirs of data are vital.Mobile Apps Market for Smart City Services: A Promising FutureThe future of the mobile apps market for smart city services looks promising.Numerous opportunities exist for app developers and other companiesconcerned with data collection, management, and analytics. Personalizedservice and increased interaction is expected to influence governmentaldecisions and create new business opportunities for public/privateorganizations. Efficient, information-rich environments will enhance lifestylesand contribute to the development of a smart city.Cloud, Networking & ComputingSoftware is increasingly becoming crucial in terms of services andapplications, but also on how these are delivered and served to the enduser. We will explore the evolution of technologies in cloud computing andnetworking with a particular attention on how software is changing theseareas. In this issue, we will discuss the state of cloud computing in theEuropean public sector.Cloud Services in the European PublicSector – Moving Beyond FragmentedAdoptionSaverio Romeo, Industry Manager for Telecommunications and ConnectedPublic SectorOctober 2012Between Anxiety and EnthusiasmMore than a year ago, Neelie Kroes, Vice President of the EuropeanCommission responsible for Digital Agenda, claimed that she wanted tocreate a Cloud-friendly and Cloud-active Europe. The use of cloudcomputing should bring benefits to large and small companies andindividuals. Since then, the European Commission has launched aconsultation on cloud services involving cloud solution providers, cloud usersand consumers. The consultation highlighted some key challenges such assecurity, interoperability, lock-in, certification and standardization. It alsobrought attention to the topic, particularly from national governments andlocal authorities across Europe. Such organizations see cloud services as away to optimize their resources and offer better services for citizens.At the Core of Political Agenda, but Fragmented AdoptionDespite current economic conditions and subsequent restrictions on budget,European governments have generally tried to invest in the modernization ofpublic service delivery through the use of information and communicationstechnologies. Broadband deployment and cloud computing have beentwo of the key areas in which governments have focused their efforts. Therecently launched new UK budget has placed emphasis on these twotechnological areas.
  11. 11. #SMARTCOMMUNITIES PAGE 11 The new Italian government has committed to the use of cloud services across the public sector. Similar approaches are being adopted in other European countries. Despite these efforts, the adoption of cloud services across the European public sector is at an early stage. There are some interesting cloud projects at national and local levels in various European countries, but they are more single initiatives within specific government departments rather than part of an overall strategy. Certainly, new budgets are clearly moving towards a more systemic approach to cloud services. The Role of European Union – Investments and Harmonization Current fragmentation with regards to public sector demand for cloud services is also a key reason of a new EU initiative in cloud computing in the public sector. At the last World Economic Forum in Davos, Neelie Kroes launched the European Cloud Partnership. The raison d’être of the Partnership is well explained on the EU Digital Agenda webpage: “The public sector collectively is the largest buyer of IT services in the Union, but its impact is very limited today. More harmonization and integration of this buying power, notably through common requirements across different areas (e.g. eHealth, eGovernment) will bring benefits to the public sector via new efficiency gains.” The European Cloud The European Cloud Partnerships will go live in July 2012, with an initial Partnership has an initial investment of approximately €10 million. The immediate task of the investment of around Partnerships is to create a strong common basis for Cloud procurement for public authorities. This Cloud procurement platform should address all the €10 million. concerns (interoperability, data security, lock in and so forth) that the Within the 7th consultation strongly highlighted as barriers to the adoption of cloud Framework Programme, services. the EU has invested The European Cloud Partnership re-emphasizes how cloud computing is a >€380 million in cloud key feature of the EU’s Digital Agenda vision. And this emphasis has been related research supported by investments. Within the Seventh Framework Programme, the EU projects has invested €382,925,070 in research projects in the area of cloud computing. This effort will continue during the new research programme, Horizon 2020. Cloud Computing for a Radical Change of European Public Sector It is too early for a detailed mapping of cloud service adoption in the European public sector, but throughout the last year a strong number of political initiatives at national level and EU levels leave few doubts that a rapid evolution of cloud services in Europe is occurring. In fact, in the coming years we expect rapid adoption of cloud services at all levels of public administration in European countries. We also expect an increasing effort to create a pan-European cloud. The Helix Nebula-the Science Cloud is an example in that direction, while the European Cloud Partnership also follows a similar path. It appears clear that the EU is moving towards a Single European Cloud as main component of a Single European Information Space. All this evolution will happen rapidly because, as Neelie Kroes claimed in her speech in Davos: “Cloud computing will change our economy. It can bring significant productivity benefits to all. It promises scalable, secure services for greater efficiency, greater flexibility, and lower cost.”
  12. 12. PAGE 12 #SMARTCOMMUNITIESBig DataData is becoming the lifeblood of any industry. We will explore how big datais used in relevant vertical industries for smart communities, and how bigdata analytics can support business and government decision makingprocess. In this issue we will explore the role of customer data analytics in theretail energy sector.The Importance of Customer DataAnalytics in the Retail Energy SectorBy Yiru Zhong, Senior Industry AnalystFebruary 2013The use of data analytics in the retail energy sector is uncommon comparedwith the trends observed in the credit card and telecommunicationsindustries. Reasons include a lack of customer data that can be collected, There is recognition ofand customers’ privacy concerns. However, Frost & Sullivan believes that customer data2013 is the year that customer data analytics will gain a high profile through analytics benefits buta confluence of driving forces: there are not enough• Energy consumers will be more open to energy management services in by retail energy the current climate of rising energy costs companies in Europe• Retail energy companies will be keen to prepare for customer care ahead of a country’s smart meter rollout plans.• The industry is seeing true convergence of information technology (IT), communications, and industrial equipment companies to meet demands of a smart energy future.• Governments, regulators, and interest groups are working together to address privacy concerns.The Reticent Attitude towards Customer Data AnalyticsRetail energy companies have been reluctant to invest in customer dataanalytics because there has been no pressing business need. The energysector overall may have been liberalised, but it is taking its time to adjust tocompetition—especially in retail. Even in countries where retail competitionis high (e.g., the United Kingdom), use of customer data analytics is low. Alow adoption also is contrary to economic theory: Customer data analyticsmust be a key tool that allows energy suppliers to differentiate on non-pricefactors in what is essentially a commodity product. Low adoption can belinked to:• No instrumentation in the home. Few parameters are being captured inthe prevailing engagement method between energy supplier and customer:a meter for reading usage. A meter is usually outside a residence or in adifficult-to-reach location. It may record usage in real time, but the data isusually counted in large intervals of time (quarterly or monthly). As such, theonly necessary interaction is the energy company sending an invoice to theconsumer, and the consumer making a payment. Consumers have no otherway to measure consumption, and invoices are so outdated that there is noincentive to change behavior.
  13. 13. #SMARTCOMMUNITIES PAGE 13 • Customer Attitudes. Customers are wary of personal data being misused or shared with third parties exposed to unwanted personnel. The fear of privacy loss prompted delays of mandatory smart meter installation in the Netherlands and the UK. Both factors must be addressed to optimise smart grid investments. With the push to implement smart electricity meters by 2020 according to European Commission mandates, retail energy companies are considering how they can improve consumer services through portfolio expansion and IT and communications technologies (ICT) investments. A smart meter’s measuring tools and sensors will help consumers understand home energy consumption patterns. Both factors must be addressed to optimise smart grid investments. With the push to implement smart electricity meters by 2020 according to European Commission mandates, retail energy companies are considering how they can improve consumer services through portfolio expansion and IT and communications technologies (ICT) investments. A smart meter’s measuring tools and sensors will help consumers understand home energy consumption patterns. A networked home is essential to integrate consumers’ demand patterns into the grid for more accurate, real-time balancing of electricity. Energy consumption insights will help the consumer determine baseline energy habits and eventually pave a way for the educated consumer buying a bundle of energy services from the supplier. Connectivity Connectivity is the essential building block for smart communities. We will Evolution of explore the role of super fast broadband and mobile communications #SmartCommunities networks. But, we will also look in great details at machine-to-machine require deep technologies and short-range wireless solutions. We will analyse all this from a understanding of technological perspective and from a market perspective. In this issue, we connectivity services. look at the entrance of Huawei in the M2M market. No one does that better than the telcos What to Make of Huawei’s Entry into the M2M Market in Europe? By Yiru Zhong, Senior Industry Analyst, ICT Europe October 2012 Is Huawei the Disruptive Player that the M2M Market Needs? In September, Huawei formalised what has mainly been a reactive approach towards the machine-to-machine (M2M) opportunity in Europe. It announced its expansion into the region by revealing several partners and value-added distributors, most notably Landis + Gyr, a smart meter manufacturer. This is definitely a shift from its position of only a year ago. Then, it was decidedly more tactical and would fulfill demand only where there are immediate product and customer requirement alignment. If a market entry does not guarantee Huawei a meaningful market share, it would choose not do so. With this expectation and our opinion that the M2M market could do with an external shock to kick start the industry, Huawei’s entry is a net positive.
  14. 14. PAGE 14 #SMARTCOMMUNITIES Huawei’s presence will spur the M2M market, just as its foray in the telecommunications infrastructure outside of its home market triggered deep changes in that sector, accelerated innovations in technological Huawei’s M2M module applications and business models, reduced the number of players, and market entry will reduce more importantly, drove significant industry convergence. The equipment the barriers to adoption, vendors left standing have a much wider IT and communications portfolio especially among the and expertise. SME segment Huawei’s entry into the M2M market in Europe originates from its devices business unit, where its M2M modules have already been successfully deployed in key verticals in China. It is also clear that Huawei is betting heavily that the telecommunications industry will be the main conduit for moving M2M modules to the end customers; many of Huawei’s newly announced M2M partners are in the telecommunications equipment business or are providing communications services. With the exception of Landis+Gyr, Huawei’s partners are also trusted brand names in the specific M2M vertical. This is an important difference to Huawei’s M2M module competitors – while its credibility is currently less established than many of the module manufacturers in the market, it relies on the middlemen to spread Huawei’s technical expertise for end customers with basic M2M communication requirements. Furthermore, armed with a basic M2M portfolio at this announcement, Huawei’s entry seems to be targeting, generally, the lower end of the technology sophistication spectrum and; thus, the lower end of M2M use cases. This will provide a shorter return on investment for such companies in industries where the M2M benefits of automation are less clear or even where secure M2M communications are less severe. We expect Huawei’s portfolio to widen in coming years, but its presence in the market is not necessarily a bad thing for the end M2M user. Drawing parallels from the telecommunications vendor market, we can expect the following changes in the M2M market: 1. More widespread M2M adoption. The average M2M end user will benefit with an additional choice of M2M module manufacturer. Simple economics suggest that this will have the inevitable downward pressure on prices. This, in turn, will make the business case easier for risk-averse M2M customers, whether they are in a conservative industry or whether they are small and medium in size. In industries where legislation does not compel one to implement an M2M solution, such as in smart metering, a reasonable business case can be a stumbling block to an M2M project sale. 2. Innovations in applications and business models. Huawei’s direct competitors such as Telit, Cinterion and Sierra Wireless will be wary of losing market share and we hope the fear will lead to accelerated innovations in technological applications and/or business models. We will also see an accelerated timeline for M2M module manufacturers to expand in the M2M value chain to provide more services around M2M SIM and even M2M application development. Additionally, we will definitely realise an accelerated collaborative approach to partnerships across the M2M value chain and with vertical applications’ eco-system players.
  15. 15. #SMARTCOMMUNITIES PAGE 15 Beyond Huawei’s direct competitors, we are hopeful that a more urgent sense of collaboration could also spread the application of M2M into the realm of B2B2Cfunctionalities beyond such traditional sectors as telematics and consumer electronics. We still do not see a more widespread utilisation of a personal mobile device, such as smart phones or tablets, as a personal touch point to the end customer – the idea of a connected society that touches every citizen can then truly materialise. 3. De-fragmentisation of a disparate M2M eco-system. When we consider both the M2M and its applications in each industry’s value chain, we still have a rather fragmented eco-system. As more M2M players look to expand their portfolio, we expect several more iterations of value proposition fine-tuning. The bigger players, such as M2M telcos, must evaluate their proposition and differentiate from not only their immediate peers, but also other M2M players, if they want to capture M2M revenue beyond simple connectivity. 4. The rise of M2M data analytics. We hope that the evaluation of market positioning would accelerate the push towards monetising and utilising M2M data and intelligence. Currently, this is an even more nascent development within the M2M market and use cases continue to be patchy at best in M2M verticals. We are hopeful that M2M telcos could be motivated to consider this route as a differentiating factor to other M2M players. Similarly, we also believe there is a role among system integrators who would be able to enable the applications of data analytics for more accurate business decision making. 5. The importance of security. We predict that there will be a severe security breach that will shock the industry into becoming more vigilant in ensuring security in an M2M world. This is not necessarily going to originate from Huawei’s M2M modules. But we expect the move towards stripped down M2M modules to keep costs low could lull less security conscious M2M customers into a false sense of safety. Furthermore, as more objects/machines are connected, a security breach becomes more likely. Inevitable Economic Outcome – Embrace the Challenge We welcome the presence of Huawei in the M2M modules as their first foray The hope is that market in this market opportunity. Our last words are that Huawei’s entry has entry should accelerate sounded a warning to the market and the participants have almost a three M2M innovations year response window. Just as Huawei’s telecommunications portfolio expanded to include IT and applications, we fully expect Huawei to compete with a wider portfolio that its traditional competitors such as Ericsson, Alcatel Lucent, and Nokia Siemens Networks have in their M2M proposition. If we consider an average of three years for Huawei’s new venture to prove its strategy, there is not much time for its traditional competitors to entrench deeper within targeted M2M opportunities.
  16. 16. PAGE 16 #SMARTCOMMUNITIESMarket ViewsThe points of view of industry participants is very valuable for a betterunderstanding of technological and market evolution. In each issue, one ofour analysts will discuss key topics with relevant market players or will profilecompanies that are performing well in market and technological terms. Inthis issue, Saverio Romeo talks with Qualcomm Life about telehealth.The Evolution of Telehealth in Europe – ThePoint of View of Qualcomm LifeBy Saverio Romeo, Industry ManagerDecember 2012 Qualcomm LifeThe telehealth market in Europe is still nascent despite the fact that all prepares to take on theEuropean countries report at least small local telehealth or telemedicine nascent market that is ITundertakings, or plan to start such pilots. According to the European HealthcareCommission’s benchmarking study, current projects mainly concerntelemonitoring applications for chronically ill patients, access to care fromremote and scarcely populated areas, exchange of patient data,coordination of services between health and social care providers, and insome cases, telecare provision. Apart from the pan European projects likeRENEWING HEALTH (REgioNs of Europe WorkINgtoGether for HEALTH), thewider use of telemedicine services at the national level is still the exception.Such initiatives can be noticed only in the Nordic countries: Denmark,Sweden, Norway and Finland. A growing number of countries (among themSlovak Republic, Romania and Spain) is also adopting national strategydocuments for telehealth implementation.According to a recent study from the European Commission’s Joint ResearchCentre (IPTS), Denmark, England and Scotland are the three pioneers thathave been able to integrate telehealth into standard patient treatments.Denmark emerges as an example where good co-operation betweengovernment and healthcare stakeholders has contributed to the integrationof personal health systems such as remote patient monitoring intohealthcare delivery. In England, there have been economic incentives, newfunding, impact assessment and political back-up to integration of healthand social care that contributed to the success of telehealth.This nascent, but evolving, context is also driven by companies that providetechnologies to facilitate and accelerate the adoption of telehealthsolutions. Qualcomm Life is one of these. Frost & Sullivan has met QualcommLife to better understand their offer for the European telehealth market.Saverio Romeo (SR): Can you provide an overview on Qualcomm Life?Qualcomm Life (QL): Qualcomm Life, a wholly-owned subsidiary ofQualcomm, Inc. operates and maintains a wireless communicationsinfrastructure, network and service platform dedicated to the health carecommunity. Qualcomm Life is therefore a network and business to business(B2B) service operator in that it allows telehealth service providers and
  17. 17. #SMARTCOMMUNITIES PAGE 17 system integrators to securely develop, deploy and operate end-to-end telehealth services and applications throughout Europe. Qualcomm Life’s mission is to mobilize healthcare, with an objective of a world with access to health care anytime and anywhere. SR: At the recent International Telehealth and Telecare Conference in Birmingham, Qualcomm Life launched the 2net™ Hub & Platform. Can you describe the Platform and its main features? QL: 2net is a plug and play connectivity hub of a size of a small box that can Qualcomm Life’s 2net is be installed anywhere in the home of the patient, connecting medical a plug and play devices through Wi-Fi, Bluetooth, Bluetooth low energy or ANT+ radios. It product to simplify locally and wirelessly collects biometric data generated by medical devices deployment for and transmits it through a cellular network, wherever the country of use is in healthcare practitioners Europe, to our 2net Service Platform that aggregates and stores the data. The main competitive advantages of Qualcomm Life is the full interactivity between 2net Hubs deployed in the home of the patient and the Service Platform operated by Qualcomm Life 24/7/365, allowing our customers to significantly reduce the costs of operations of their telehealth services . Indeed, this consistent near real-time interaction between the 2net Hubs and the Service Platform allows us to remotely configure, upgrade and maintain the hubs and the connectivity with the medical devices. The second competitive advantage is the openness of our ecosystem and network. It is available to nearly any medical or fitness device, the same for the community of developers that can connect through documented APIs to our service platform in order to develop and deliver to the health care community fully tailored telehealth applications. This provides our customers significant flexibility and adaptability to deliver the right medical device configurations and combinations to any patient at any time in any place in Europe, as well as being in a position, at any moment, to upgrade, modify or improve the telehealth application’s look and feel, MMI and content, remotely. The 2net Hub as well as the Service Platform of Qualcomm Life is CE registered and Class I listed under the medical device directive (MDD). SR: Qualcomm Life 2net™ was launched in the US in late 2011, can you share some case stories that illustrate how the Platform works and benefits to patients and doctors? QL: One example is from one of our earliest customers, Entra Health. They have integrated their MyGlucoHealth blood glucose monitor with 2net, allowing patients to seamlessly send blood glucose readings to carers or general practitioners. No longer does the patient have to take device readings and either manually transmit them to a computer log or connect to a hardwire to transfer data. Readings are automatically picked up from the 2net Hub, sent to the Platform and then onto a final application, device or dashboard for monitoring or interpretation by a carer. In some cases, those readings are also monitored by a family member, improving quality of life. This is particularly important for a parent with a child who has Type 1 or Type 2 diabetes for instance.
  18. 18. PAGE 18 #SMARTCOMMUNITIESWe officially launched our business in Europe and have customers deploying2net and our Service Platform locally. To date, 2net has nearly 180customers, collaborators and app developers in our 2net Ecosystem. Oneexample in Europe is Telbios, a system integrator and telehealth serviceprovider in Italy, which uses 2net Hubs and our Service Platform to provideand deliver chronic disease patients’ medical data to several hospitals fromfour different regions in Italy. The patient remains at home and 2net transfersall of the medical data to the Service Platform that Telbios accesses toaggregate and deliver data in the right format to hospitals for onlinemonitoring or alerts. Through this program, the hospitals plan to significantlyreduce their operational and readmissions costs by focusing on high risk, high Qualcomm Life’s 2netcosts patients even before a critical event might occur. groups eco-systemSR: It is a common consensus that telehealth will change health care partners together tosystems dramatically in Europe, but the adoption of telehealth is low in deliver new servicescomparison to the expectations. What are the barriers to overcome in orderto accelerate the adoption of telehealth in Europe? And how 2net™ candrive that adoption?QL: Both patients and hospitals want and need telehealth for differentreasons. Patients want to stay at home with family members, and once he orshe gets a reliable telehealth service, the physician or carer can provideremote monitoring to avoid exacerbations or help follow treatmentprotocols. On the other hand, hospitals face greater budgetary challengeswith a reduced number of beds available. They need to reduce costs andthose often involve urgent or not urgent readmissions led by chronic diseasepatients with. So many factors are coalescing for a general adoption oftelehealth for chronic disease management; but, the time required for asignificant adoption will of course vary country by country.Qualcomm Life helps to solve several challenges limiting adoption, includingdata security, privacy and interoperability of devices by the provision andoperation of a pan-European reliable, secure and confidential IT solutiondedicated to telehealth. Now, the business model supporting thedeployment and reimbursement of the hardware and service componentsof telehealth needs to be decided and implemented.What we have experienced so far is that countries that have a decentralizedand regional healthcare system where the local authorities canindependently decide budget allocations and reimbursement proceduresprogress more rapidly as they work closely, directly and individually witheach group of hospitals or service providers. A good example of this is Italy,where trials in the Veneto, Lombardy and Piedmont regions have beenreimbursed. This also allows them to rapidly put in place efficient businessmodels adapted to each particular group of hospitals in specific regions.Several regions from countries like Italy and Spain already have in placeoperational telehealth programs and services with over tenth thousandchronic diseases patient managed and monitored remotely from home andreimbursed by local social authorities. I believe the local initiatives andprograms will be key for a rapid adoption and use of telehealth. We are alsogetting more visible proof from major national initiatives like 3millionlives inthe UK, which has noted decreases in mortality rates of 45% in initial trialpatients.
  19. 19. #SMARTCOMMUNITIES PAGE 19 SR: 2net™ has been launched in the main European markets. What is your go-to-market strategy and pricing model? And which are the business models you will adopt in those countries? QL: Our model is a B2B2B or B2B2C model. We are an enabler so we support the telehealth service providers and system integrators in making sure they can focus on the telehealth applications and services delivered to their end users whereas Qualcomm Life takes care of all the challenges related to the connectivity and data collection, transfer and storage in a service platform that can easily be accessed by our customers and any other duly authorized party. I have to admit that today we are directly approached by telehealth service providers in Europe that have services up and running or in demonstration phases but face challenges with the IT and wireless communication infrastructure and solution put in place and want to transfer this portion of the business to partners with the right expertise in wireless communications and managed services. We started our operations two months ago in Europe. We already have two key references with operational Qualcomm Life’s 2net is telehealth services as customers and have been approached and are in already deployed in negotiation with several service providers, system integrators, carriers and big Europe. Local initiatives pharmaceutical companies that want Qualcomm Life to power and and programmes will operate their IT and wireless communications infrastructure and network. The be the main driver for pan-European connectivity we use enables us to negotiate and close deals rapid adoption of in any European country, both in Western and in Eastern Europe. The model is very simple, we charge a flat monthly fee per active 2net Hub which is a teleheath services “no surprise fee” as it includes not only the wireless communications cost, but also the integration costs of any new medical device in our ecosystem and network, unlimited access to our Service Platform, and access to our support services as well as any new software releases and upgrades. SR: When do you think 2net™ can be launched in Eastern European markets? Are Russia and Turkey under your radar? QL: As stated previously, our 2net Hub and Service Platform can already be deployed and used in most Eastern European countries. For Russia, the challenge is just the hardware certification which is different from the CE marking certification so it will require local certification. Except for seeking regulatory certification, nothing prevents us from launching our services in Russia or in Turkey. It will depend on the business opportunities that will arise in the coming months. SR: Which are the technological evolutions you envision for the Platform? QL: Our product roadmap includes two major innovations for launch in the coming 12 months: one software development kit or SDK that allows medical device manufacturers to rapidly and easily integrate their device into our ecosystem, network and Service Platform. Doing so, the “on-boarding” of new telehealth service providers using specific or new medical devices will not be as challenging or time consuming. The second innovation to come soon is what we call the virtual hub which consists of porting, integrating and having the 2net Hub available virtually on any smartphone or tablet so that these mobile equipment devices can collect, aggregate and transfer biometric data to the Service Platform generated by any medical device in patients’ nearby environments.
  20. 20. PAGE 20 #SMARTCOMMUNITIES SR: In telehealth and more general in the use of information and communications technologies in health, we are at the verge of dramatic changes. Which is the role that Qualcomm Life wants to play in that process? And what is Qualcomm Life doing, in technological and strategic terms, in order to achieve that role? QL: The answers to your previous questions help demonstrate that Qualcomm Life is not only an enabler but also a facilitator and accelerator for mobile health service adoption. All the investments and developments completed by Qualcomm Life in health care pursue and support this objective. This is also why the Qualcomm Life Fund exists. Managed by Qualcomm Life: “You Qualcomm Ventures, this $100 million fund is available to stimulate the can expect a SDK for industry by investing in global companies that also support this objective - to easier integration onto mobilize health care for chronic disease patients. This already impacts the our platform and lives of 300 million people in North America and Europe and 860 million bringing in virtualization worldwide, who can now be better managed and cared for. If we want to enable mobility into personalized health care in a growing aging population with chronic service delivery.” disease, saturated hospitals and a shortage of carers, it is the responsibility of companies like Qualcomm Life to leverage its knowhow in IT, cellular technologies and managed services to make sure all these patients have a better life, cared for and monitored remotely in the comfort of their own homes.
  21. 21. #SMARTCOMMUNITIES PAGE 21Editorial BoardAdrian DrozdResearch DirectorICT Europeadrian.drozd@frost.comTel: +44 (0)1865 398 699Jean-Noel GeorgesGlobal Programme ManagerDigital Identificationjean-noel.georges@frost.comTel: +33 (0)4 93 00 61 87Saverio RomeroIndustry ManagerTelecommunications &Connected Public Sectorsaverio.romeo@frost.comTel: +44 (0)20 7343 8367Yiru ZhongIndustry ManagerMachine-to-Machine &ICT in Smart Energyyiru.zhong@frost.comTel: +44 (0)20 7915 7822