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Smart Cities: Proving Ground for the Intelligent Economy

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Presented at IDC Directions 2010

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Smart Cities: Proving Ground for the Intelligent Economy

  1. 1. Smart Cities: Proving Ground for the Intelligent Economy Rick Nicholson Vice President, IDC Energy Insights Copyright 2010 IDC | Reproduction is forbidden unless authorized. All rights reserved.
  2. 2. Agenda What are the mega-trends behind smart cities? Why make cities smart? What is a smart city? What role do specific industries play? Smart city case studies How big is the opportunity? Essential guidance ©2010 IDC | 2
  3. 3. Urbanization The Percent of the Population Living in Urban Areas is “The 19th century was a century of Projected to Rise Rapidly in the Less Developed empires, the 20th century was a Regions—Asia, Africa and Latin America century of nation states, the 21st 100 century will be a century of cities” 89 90 90 84 – Wellington Webb, 78 81 former Mayor of Denver 80 72 70 66 64 62 60 51 People living in cities: 50 41 41 – Are more economically 39 40 successful 30 – Are better educated 20 15 17 – Are generally healthier 10 However, urban citizens also: 0 Africa Asia Europe Latin North – Use more energy America America – Consume more goods and services 1950 2007 2050 – Create more pollution and waste Source: UN Population Division, World Urbanization Prospects: The 2007 Revision, Executive Summary (2007) ©2010 IDC | 3
  4. 4. Intelligent technologies U.S. Intelligent Devices (Units x 1,000) 80,000 Intelligent devices (e.g., 70,000 smart phones, smart meters, 60,000 50,000 sensors) provide cost effective 40,000 “telemetry” for infrastructure, 30,000 vehicles, people, etc. 20,000 10,000 Pervasive broadband 0 networks enable real-time 2009 2010 2011 2012 2013 communications among Smartphones Smart meters intelligent devices and back- end systems Worldwide Broadband Connections (Units x 1,000) 700,000 Analytics and social media 650,000 process the real-time data 600,000 streams, enable real-time 550,000 decision making, and provide 500,000 a platform for information 450,000 dissemination and 400,000 collaboration 2009 2010 2011 2012 2013 Source: IDC, 2009 ©2010 IDC | 4
  5. 5. Why make cities smart? Sustainability – Reduce greenhouse gas emissions/carbon footprint – Reduce water waste/make clean water available Economic development – Make it easy to do business/attract new business – Promote job growth – Increase per capita GDP – Drive economic diversity ARRA funding (U.S.) – $4 billion in smart grid grants – $2.4 billion for battery manufacturing and electric vehicles – $2 billion to promote telemedicine ©2010 IDC | 5
  6. 6. What is a smart city? Citizens Businesses Energy Water Communications Transportation Buildings City Services City Infrastructure Intelligent Pervasive Broadband Analytics and Devices Networks Social Media ©2010 IDC | 6
  7. 7. Infrastructure: Energy Worldwide CO2 Emissions Energy Prices (Oil) $88 $86 $84 $82 $80 $78 $76 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Worldwide Energy Consumption Worldwide Energy Demand Sources: International Energy Agency (IEA) and Consensus Economics, 2009 ©2010 IDC | 7
  8. 8. Infrastructure: Energy Opportunities – Smart grid • Smart meters, grid sensors • Neighborhood/wide area networks (wireless mesh, WiMAX) • Meter data mgmt and grid mgmt systems – Energy efficiency and demand response • In-home displays, smart thermostats, smart appliances • Home area networks • CRM systems, analytics and customer portals – Electric vehicles • Charging infrastructure (smart charging stations) • Wide area networks • Charging management systems ©2010 IDC | 8
  9. 9. Infrastructure: Transportation Worldwide Growth of Electric Vehicles Transportation as a Service (Car 2.0, Mobility on Demand) – Rent a car, scooter, bike via subscription – One-way sharing (pick up and drop off in different locations) – Enabled by smart grid, GPS, wireless communications, analytics – Integration with public transit (multi-modal) Source: International Energy Agency (IEA), 2009 ©2010 IDC | 9
  10. 10. Infrastructure: Transportation Opportunities – Smart charging, vehicle-to-grid (V2G) • In-car technology (software, communications) • Charging infrastructure • Wide area networks/GPS – Back office systems • Billing and settlement systems • CRM and account management systems • Analytics (demand forecasting, GHG emissions) • Enterprise asset management (EAM) – Driver/consumer services • Portals • Mobility • Social media ©2010 IDC | 10
  11. 11. Infrastructure: Health Drivers – Aging population – Increasing costs – Prevalence of chronic disease – Consumer expectations of service quality and life style continuity – Provider staffing shortages that are significant and accelerating Source: U.S. Centers for Disease Control and Prevention, 2009 ©2010 IDC | 11
  12. 12. Infrastructure: Health Opportunities – Telemedicine and remote patient monitoring • Intelligent/connected medical devices (glucometers, pulse oximeters, blood pressure monitors) • Wide/home area networks • Care management systems (enables remote care by clinicians) • Electronic medical record (EMR)/personal health record (PHR) systems • Patient portals • Telepresence/video conferencing ©2010 IDC | 12
  13. 13. Businesses: Retail Drivers – Smaller urban stores vs. big-box suburban stores – Product/service differentiation – Consumer focus/”customer first” – High energy and transportation costs – Carbon footprint/sustainability ©2010 IDC | 13
  14. 14. Businesses: Retail Opportunities – Real-time in-store systems • PoS/self-checkout • Kiosk • Mobile/personal shopping assistant • Digital signage • Video intelligence – Centralized back office systems • eCommerce, mobile and social media • Merchandising and supply chain management • Business intelligence and customer analytics – Energy management systems • HVAC • Lighting • Refrigeration ©2010 IDC | 14
  15. 15. Businesses: Financial Services Drivers Most Frequent Transaction Types Conducted – Fewer and smaller branches will need to handle more activity with smaller footprints – Specialists (wealth, insurance, mortgage, etc.) inefficiently distributed in branch network – Customer acceptance of self-service Future Mobile Banking Initiatives Source: IDC, 2009 ©2010 IDC | 15
  16. 16. Businesses: Financial Services Opportunities – Smart banking • Personal teller machines (video, centralized specialists) • Mobile banking (smart alerts, integration with ATMs and home PCs) • Back office systems (dynamic pricing, fraud analytics) • Security ©2010 IDC | 16
  17. 17. Austin, Texas Pecan Street Project – Started with no budget and 200 volunteers – Leveraged resources of founding and corporate – Goal to “design and implement partners including: an energy system that generates a power plant’s worth of power • Austin Energy from clean sources… and • Cisco delivers it over an advanced • City of Austin delivery system that allows for • Dell customer energy management” • Environmental Defense Fund – Want the infrastructure (grid) to be • University of Texas at Austin a platform for innovation – Focus is on economic – $10.4 million ARRA smart development grid demonstration grant ©2010 IDC | 17
  18. 18. Austin, Texas car2go – First launched in Ulm, Germany – Austin pilot launched in late 2009 with 200 cars used by city employees and their families – Locate available cars via – Owned by Daimler AG phone or web site – Smart Fortwo cars – Car unlocked and started by – No reservations required smart card and PIN code – In-car touchscreen – Per minute/per hour rental fee – Park in any non- includes fuel, maintenance, metered/restricted space insurance ©2010 IDC | 18
  19. 19. Amsterdam Amsterdam Smart City – Collaboration between: • Municipality of Amsterdam • Liander (utility) • Amsterdam Innovation Motor (AIM) – Series of pilot projects over two years in four focus areas – Focuses on “innovative technology, sustainable • Sustainable living economic investments • Sustainable working and changing the • Sustainable mobility behavior of the people in • Sustainable public space Amsterdam” – Technology partners • Accenture • Cisco • IBM • Phillips ©2010 IDC | 19
  20. 20. Amsterdam West Orange project Sustainable – 500 homes with smart meters and in-home displays living Geuzenveld project – 700 homes with smart meters and in-home displays ITO Tower project Sustainable – 38,000 square meter office building working – Sensors managing lighting, heating, cooling and security Ship to Grid project Sustainable – 154 shore power connections for river cruisers and inland mobility freighters – Pay-by-phone system Climate Street project – City center street with 140 SMBs (mostly retail) Sustainable – Waste collection and goods delivery with electric vehicles public space – Intelligent street/facade lighting – Solar powered tram stops, billboards and waste bins ©2010 IDC | 20
  21. 21. How big is the opportunity? Examples for a city of 1 million people Smart metering 600,000 $120 million smart meters opportunity Electric vehicle 45,000 $225 million charging electric vehicles opportunity infrastructure Remote patient 70,000 $14 million monitoring people opportunity (diabetes) w/diabetes Smart retail 4,000 $200 million establishments stores opportunity Total Worldwide ICT Smart bank 3,200 $160 million Opportunity ≈ $200 Billion branches PTMs opportunity Note: These are high level estimates – not to be used for formal market sizing ©2010 IDC | 21
  22. 22. Vendor universe ©2010 IDC | 22
  23. 23. Essential Guidance Learn how to sell to consortia that include both private and public sector organizations Look for smart city initiatives in: – Medium sized cities in mature economies (North America, Europe) – Developing cities in developing economies (Asia, Middle East) Get in early and establish brand recognition Leverage initial projects into multi-sector deals Develop partnerships with other key vendors – Intelligent device vendors – Engineering, procurement, construction (EPC) companies ©2010 IDC | 23
  24. 24. Contact Information Email us at: rnicholson@idc.com Please fill out your Directions evaluation form ©2010 IDC | 24

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