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DataquestPublication Date: 30 September 2010 ID Number: G00205838

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Market Insight: 'Smarter Cities' Event in ShanghaiReveals IT Vendor Opportunities for IntelligentUrbanization

Bettina Tratz-Ryan, Luis Anavitarte

Vendors that pursue sustainability solution strategies have identified urbanization aroundthe globe as a growing opportunity. Because of the diverse objectives and timelines ofstakeholders such as utilities, public services, first responders, healthcare andeducation, vendors must build out consulting and system integration as well astechnology and solution implementation and management capabilities. City planning inemerging markets is quite different from mature markets; therefore, the go-to-market

approaches must provide an end-to-end planning process to accommodate value chainsand business intelligence of all city subsystems.

Key Findings

Intelligent city planning often starts with the alignment of objectives of economic growthand development of the entire city, as well as the social impact and environmentalsustainability. Each city has its own vision of where it will be at the end of the process,and those visions could vary quite significantly.

Cities and their various subsystems have differing, wide-ranging and typically long-termplanning horizons. This is in stark contrast to investment cycles for IT infrastructure incommercial organizations that run between five and 10 years. This requires a differentgo-to-market approach, as well as vendor commitment.

The requirements of smart city subsystems can be segmented into operational orstrategic goal orientations. The implementation of interactive water or energy metersreduces operating expenditures and maintenance costs. Congestion charging andcontext-based services, in conjunction with location-based services, could support returnon investment.

Exploiting the opportunities of intelligent cities will require consortia/partnerships ofvendor ecosystems that consist of different skill sets, specialists (technology, services),generalists (business process and intelligence) and advisors (consulting and sustainableadvisory services).


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Publication Date: 30 September 2010/ID Number: G00205838 Page 2 of 17

2010 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

Recommendations

Procurement Plan for the longevity of the planning cycles, as well as the salessupport and innovation investments required for them.

Align your IT message with the different buying centers, including the different agenciesand sector leads for utility, public safety, healthcare and transportation. Position the

benefit of IT and the interface to operational investment clearly, and target it at thedifferent stakeholders in government and industry.

Vendors need to take risk sharing into consideration, while building out the value ofcitywide organizational intelligence and predictive management of information.

Vendors must consider hosting platforms for the stakeholders, or build out cloud-baseddelivery models for their customers. These services could be energy metering andmanagement of the data points, or database information management for the publicsector.

Vendors must develop best-of-breed ecosystems in which the innovation for differentstrategies of the subsystems is fostered and advanced.

Vendors must assess the strategic significance of evolving from a technology provider toestablishing themselves as long-term solution brokers through partnerships.


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TABLE OF CONTENTS

Analysis ....................................................................................................................................... 4City Growth and Sustainable Stability ............................................................................... 4Emerging Markets ............................................................................................................ 4Mature and Developed Markets ....................................................................................... 5Vendor Impact ................................................................................................................. 6Microcosm and Subsystems ............................................................................................ 6

Transportation ..................................................................................................... 8Energy and Water (Resources) ........................................................................... 8Communications ................................................................................................. 9Healthcare......................................................................................................... 10Education .......................................................................................................... 10Public Safety/E-Government.............................................................................. 10

Background and Context ............................................................................................................ 10The Impact ................................................................................................................................. 13Conclusion ................................................................................................................................. 13Recommended Reading ............................................................................................................. 16

LIST OF FIGURES

Figure 1. Sustainable Urbanization and Subsystems .................................................................... 7Figure 2. Objectives of Sustainable Urbanization ........................................................................ 12Figure 3. Vendor Domains for Sustainable Urban Planning Projects ........................................... 15


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ANALYSIS

Although the concept of intelligent urban planning under the auspices of sustainability is not new,the context of the discussion on fundamental technology issues by vendors is new. In manygeographies, cities face financial constraints in maintaining the grids for electricity and water, aswell as roads and other infrastructure. In addition, by 2012, there will be 221 cities with more than1 million citizens, of which 97% are located in emerging markets. IT vendors have discoveredurban infrastructure and its microsystems as long-term growth markets. Also, technologies suchas proliferating IP infrastructures and broadband mobile infrastructures enable a connectivity ofthe "Internet of Things," including machine-to-machine communications facilitated by radiofrequency identification (RFID), global positioning systems and satellites. The interaction oflocation-aware applications on mobile devices with intelligent and reactive applications, such astraffic status, energy consumption or video communications, will empower citizens' quality of lifeand service experience. Service and utility providers will leverage information gathered by sensornetworks and intelligent metering and measuring infrastructure to improve overall infrastructurereliability and predictability of outages while optimizing its performance and operationalmaintenance costs. New technology approaches present long-term opportunities for IT vendors toposition their strategic direction toward sustainability.

City Growth and Sustainable StabilityThe sustainable urban development initiatives vary quite substantially in scope, timeline andstakeholders responsible for the projects. Many of the programs focus on the development of theimage and the brand of the city, not necessarily the improvement of its eco-environment and thesocial aspects. Especially in the developing countries, the strategies for economic growth and theattraction of investment and certain industries will also play a major role. Heavily industrializedcities in China, such as Nanjing, have started to launch a reimaging campaign, focusing on airand water pollution, and encouraging new industries to move from a manufacturing city to aservice and IT industry. To improve the living conditions in the city, including education, lesspollution and better leisure activities, the city council is planning to attract skilled knowledgeworkers and engineering and software programming companies. Eco-environmentalconsiderations can include the protection of historic landmarks, improving healthcare or life

expectancy of citizens, or stimulating tourism and convention business. For example, Venice,Italy is built on a fragile ecological location; that city is battling the rising sea level, which isflooding the city. The city is developing a tourist navigation application, in which the tourists canpoint with a special location-aware device to a building or historic landmark to gain theinformation for the site, as well as a recommendation of a tour route. With this application, thegathering of large crowds in one location could be avoided, guaranteeing a better sightseeingexperience for the tourists, while protecting the narrow roads, bridges and buildings of the city.

Emerging Markets

In the emerging markets, economic growth and gross domestic product is developed mostly inthe urban areas. In fact, urbanization as a process is highly accelerated in emerging markets this is not limited to emerging markets, but it is a fact of life globally. Therefore, many peoplemove from rural areas into the cities to look for work and personal improvement. The sustainable

construction of city building and roadway infrastructure, in conjunction with schools, economiczones and transportation, such as harbors, airports and railways, is extremely critical to avoid thedevelopment of slums and substandard living quarters. Many urban development programs incountries such as Brazil, Thailand, Bangladesh and India are targeted to manage the influx ofrural citizens into the cities, taking a holistic approach to link social development with economicgrowth and business innovation and development. Because of an aggressive approach that is


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supported by the World Bank and the World Trade Organization in terms of guidance andlending, countries are developing in geographic pockets with capabilities for new IT and R&Dinnovation centers, as well as outsourcing facilities. Education is becoming a cornerstone forthose capabilities, and skilled workers with low labor unit costs are attractive locations forcompanies manufacturing in high-labor cost countries.

Recent urban development projects, such as Ho Chi Min City (Vietnam) and Manila (the

Philippines) include the establishment of reliable electricity and water infrastructure. In manycircumstances, both resources are not consistently available, and the quality of the delivery andthe resource varies frequently. The output of the development of alternative resources, such assolar and wind turbines, are, in most cases, insufficient, so that especially in China and India theconstruction of power plants using nuclear power, coal and hydro is planned. Water desalination,together with water refarming and recycling of wastewater, increases the supply of water neededfor the growing number of citizens. In parallel, for the power and the water grid, methods such assensor networks and advanced meters are installed to improve the quality of the transmissionand to identify resource performance losses and maintenance issues of the infrastructure. Trafficmanagement such as that in Singapore, in conjunction with weather reporting and congestionmanagement and charging, enable the predictability of public transportation and the ability tomove traffic jams onto railways and buses, reducing air pollution. Vendors need to enable cityplanners and ecosystem participants to identify the milestones of sensible ROI for building out

environmentally sustainable subsystem solutions. Using database intelligence and pattern-basedinformation workflows, the predictable outcomes and scenarios to avoid service outages, improveservice delivery and optimize the cost of maintenance of services will be enabled by IT servicesand technology vendors.

Mature and Developed Markets

In mature markets, such as Western Europe and the U.S., the urbanization efforts are driven bythe efforts to reduce subsystem maintenance costs, such as those related to traffic, streetlighting, public transportation and energy. Although this concept has been discussed during thepast five years, much of the substance was initiated before the COP15 conference in December2009, which stimulated EUROCITIES (a group of mayors of major European cities and theEuropean Commission's Covenant of Mayors) to create the Digital Charter. The declarationestablishes a baseline in which the Green Digital Charter commits cities to work together todeliver the EU climate objectives using digital technologies that increase energy efficiency,facilitate emissions reductions and forestall climate change (www.eurocities.eu).

Many cities have developed brand and marketing initiatives that are used by mayors and citygovernment to establish the road map for their sustainability framework and the timeline andprocess of implementation. The City of New York (www.planyc.com) has launched 127 initiatives,starting with solar zones, recycling, energy-efficient building codes (Greener Greater BuildingsPlan), planting of new trees (MillionTreesNYC) and a comprehensive carbon emission andsustainability progress report, to track and manage the PlaNYC intelligent urban developmentplan. The City of Amsterdam has initiated a comprehensive city renewal that includes the energyefficiency improvement of existing and new buildings and street lighting, as well as the newharbor and a smart grid rollout. Stockholm, Sweden and Copenhagen, Denmark have done largeprojects to increase the amount of renewables, such as wind and solar, into the smart grid. They

have also implemented comprehensive traffic and congestion charging systems for the downtownareas. In all those examples, the implementation of the urbanization plans are managed in thesubsystems and governed by a steering committee or city planner who is supervising the timelineof the subsystem and its impact on the framework.
http://www.eurocities.eu/http://www.eurocities.eu/http://www.eurocities.eu/http://www.planyc.com/http://www.planyc.com/http://www.planyc.com/http://www.nyc.gov/html/planyc2030/html/plan/buildings_plan.shtmlhttp://www.nyc.gov/html/planyc2030/html/plan/buildings_plan.shtmlhttp://www.nyc.gov/html/planyc2030/html/plan/buildings_plan.shtmlhttp://www.nyc.gov/html/planyc2030/html/plan/buildings_plan.shtmlhttp://www.milliontreesnyc.org/html/home/home.shtmlhttp://www.milliontreesnyc.org/html/home/home.shtmlhttp://www.milliontreesnyc.org/html/home/home.shtmlhttp://www.milliontreesnyc.org/html/home/home.shtmlhttp://www.nyc.gov/html/planyc2030/html/plan/buildings_plan.shtmlhttp://www.nyc.gov/html/planyc2030/html/plan/buildings_plan.shtmlhttp://www.planyc.com/http://www.eurocities.eu/


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Vendor Impact

In emerging markets, urban developments frequently start in new suburbs or locations so that thedevelopers can start "from scratch" cities in developed countries. This often requires a complexintegration or upgrade into existing infrastructures or buildings. Sustainability and its significanceare often a discussion that vendors need to raise with different political stakeholders, as well as

with decision makers from social groups, religious leaders, lobbies and the military. Vendors putmuch effort into getting people to agree on the objectives and the definitions of the targets, aswell as the timeline and priorities of the subsystems. Consulting and advisory capabilities withlocal expertise and recognition are needed to support the initial phase of scoping the program. Inmany circumstances, the deployment of infrastructure and the technology to monitor and manageit is led by an experienced system integrator that can navigate and organize construction firms,supply firms and IT companies. Some vendors establish pilot projects to showcase in theemerging markets the impact in terms of cost savings or ROI for the systems and solutions.

Microcosm and Subsystems

Figure 1 provides an overview of a city program and its subsystems, as well as a selection ofinitiatives. In many cases, those subsystems are the essential elements of the programs.


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Publicatio n Date: 30 September 2010/ID Number: G00205838 Page 7 of 17


Figure 1. Sustainable Urbanization and Subsystems

Source: Gartner (September 2010)


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Transportation

In the transportation subsegment, cities are planning around roadways, public transportation,railways, harbors and airports, as well as traffic control and traffic management. Planning andtechnology solutions entail the reduction or streamlining of traffic away from congested areas toreduce pollution and carbon dioxide emissions. With this, they are improving the inner-city

atmosphere and commuting times. In addition, congestion charging and parking routes enablecities to develop business models in which the investment of intelligent transportation solutionsresult in some ROI. The build out of intelligent harbor water management, including harboraccessibility and work safety, and flood and drought management is also a solid base forincreasing commercial activities and economic gain for a city. Information about water levels,water pressure on pumping stations and harbor traffic can be linked via IT business intelligence toremotely manage the water levels of fresh water and sewage during rain, avoiding water outagesand water main breaks. IT vendors can directly impact the water company's ability to manage itswater grid assets. For example:

The Netherlands railway operator aligned its railway schedules with about 56,000variables, such as track availability, train routes, and signals between the commercial

in operational costs.Queensland Motorways in Australia implemented a vehicle toll system to manage theincreasing traffic congestion. It consolidated the information platforms of customer data,traffic flows and context-aware passenger information to streamline traffic flows anddivert vehicle congestion, as well as to offer personalized services and real-time trafficalerts.

In Singapore, the traffic authority implemented a smart card system to enablecongestion charging, which can also be used to pay for public transportation. In addition,the city invested in a business intelligence tool to align bus routing for on-time arrivalprediction. Furthermore, via location-based services and pedestrian navigation, servicessuch as walkways with the most shade or underground walking passageways aredetermined by the daily weather situation.

Energy and Water (Resources)

Energy and water supplies, in many older cities, are not sufficiently available to accommodate therequirements of their citizens and economic growth. The build-out of interactive energytransportation and distribution networks into the smart (energy) grid is already a largeconsideration in many regions and cities, or it is in the initial deployment stage through theadvanced metering infrastructure. Many cities are running projects to investigate therequirements for electric vehicle charging. The challenge for existing cities such as Amsterdam isto deploy the metering devices in existing homes, while retrofitting the distribution network andbuilding out the support communications infrastructure. Most water networks are more than 50years old, with many pumping stations and pressure levels working inefficiently and frequentleaks occurring in the water mains. Holistic planning or water grid maintenance and water meterdeployment will decrease the number of water outages while improving customer service.

Alternative energy and water resources, such as wind farms, solar power, and water refarmingand desalination, are options to use resources more conscientiously while improvingindependence from the conventional resource supply. In emerging economies, cities mustupgrade and enhance the energy and water networks, while expanding them to guarantee thatsupply meets the demand generated by an increasing population. For example:


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Amsterdam ollout. The initialpilot involves 500 homes where household appliances will be connected to the energygrid. The Dutch utility Nuon will develop the applications for the energy managementsystem. Funding and loans will be provided to enable more than 700 homes to installeverything from energy-efficient light bulbs to ultra-efficient roof insulation.

Helsinki (Finland) Through energy efficiency and intelligent building and designaround energy efficiency, by 2030 the city wants to reduce its carbon presence percitizen by 39%.

Nice (France) The city is planning to take a comprehensive approach to develop aninteractive energy management approach that can identify supply and demandvariations and integrate renewable energy sources into the smart grid.

Washington, D.C. Washington's District of Columbia Water and Sewer Authority isupgrading its water management system, which includes water distribution, water meterreadings, hydrants and valves, and pumping stations. This will enable predictive waternetwork management with reduction of outages and more-accurate meter readings.

Communications

Communications broadband networks, whether fixed or mobile, are key for the deployment ofinteractive sensor information to build portals to communicate and provide public services, or totransmit video surveillance and data files to integrated systems. Many cities and utility providerswill start to build their own communications networks to connect applications and provide context-aware interactive services to customers and operators. In addition, communications serviceproviders such as Deutsche Telekom, Telefonica and Vodafone are trying to provide informationplatforms on which customers (here, citizens) can make choices with respect to energy and watersupply, as well as service and usage information. Due to their increasing expertise in analyticaldata mining of customer behavior in their networks, communications service providers have theopportunity to provide insight into customer behavior and direct more energy- and water-efficientconsumption of resources through applications that visualize those consumption trends.Integrated access devices located at the customer premises enable the management of home orenterprise technologies and appliances, as well as the ability to gain greater insight into service

opportunities such as private security, e-healthcare or telelearning. In emerging markets, manycities adopt a broadband networking policy that aligns with a countrywide or regional wirelessaccess policy to stimulate e-commerce, healthcare and telelearning. For example:

Much of the opportunity would reside in RFID tagging or machine-to-machinecommunication, including the tagging of livestock and groceries, as well as goods to betransported or warehoused. This is especially important in Asian markets such asMalaysia, Singapore and the Philippines, where RFID tagging of agriculture is done totrack livestock and prevent diseases such as avian flu, mad cow disease and foot-and-mouth disease.

CenterPoint Energy in the U.S. has started to deploy WiMax-based MDS Mercury to linkbackhaul systems to advanced meters to collect information on a frequent andconsistent level.

Australia's recent federal election identified the build-out of a National BroadbandNetwork as one of the key differences between parties; it was ultimately one of thedeciding factors in the final outcome. That plan incorporates a fiber-based A$40 billionrollout, plus a national building scheme.


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Healthcare

Healthcare models in a smarter city context are based on the principles of equal access tohealthcare, as well as on the cost reduction in providing quality of care. The cost of providinghealthcare often does not correlate to the volume or the quality of the healthcare services.Electronic records and digital hospitals that are integrating medical information together withpatient records and other information onto one platform form a 360-degree patient view, as aretelemedicine approaches and strategies of healthcare providers. Although the strategy of thoseare focused on improved quality of delivery of services and cost containment, cities often look athealthcare as a social right and requirement that is frequently connected into countrywidehealthcare reform. Part of the healthcare offering resides in the emergency care environment,which also can be linked to traffic routing and navigation of ambulances for quicker time to theemergency room.

Telemedicine in home care and nursing is a component of an improved methodology to deliverhealthcare. However, the ability to base the delivery of those platforms on broadband carrier-grade network infrastructure requires tight integration between communications and healthcaregoals. The vertical strategies are interesting because they enable platform and businessintelligence leveraging within the network, as well as alignment among the different sectors ontothe overarching urban strategies.

Education

Especially in emerging markets, equal access to education through a tightly defined public policyhas proved to reduce the illiteracy rate, especially among women. Although a broadbandarchitecture will enable telepresence and video for universities and K-12 schools, it also enablesad hoc learning capabilities based on special events through public portals. It also fosters,through collaboration platforms and a shared-desktop environment, the interaction betweenresearch development centers, universities and third-party institutes. The City of Nanjing in Chinais building a relationship between public and private research bodies to attract innovation into itslocation to grow the opportunity of the technology sector. Also, it enables the building of aneducated workforce that will attract companies to invest there for economic prosperity.

Public Safety/E-Government

As part of their public safety policies, many major cities invest in coordinated databasemanagement and video surveillance, especially after the events of Sept. 11. In addition to safety,crime reduction and preventive event management, it also tackles inefficiencies for providingservices such as e-filing and licensing not only at municipal buildings but also via mobile kiosks.The lack of digitization has many municipal processes at a very inefficient level, with many papertrails and duplications of workflows. As an example, New York City has implemented a Real TimeCrime Center in which the New York Police Department is consolidating files from 120 millioncriminal complaints, 30 billion public records and video surveillance images to bring logic into thedata displayed on a two-story-high image wall. According to New York City records, as of April2009, the crime rate between 2001 and 2008 decreased by 27.47%.

BACKGROUND AND CONTEXT

Many vendors have identified performance efficiencies and new applications together withinfrastructure upgrades for utilities, private and public sectors, and new market segments andopportunities. Intelligent urbanization presents a branding and marketing opportunity for vendorsby educating city officials and the individual subsystem segments about holistic environmentalplanning. IBM is organizing conferences on smart cities the last one in June 2010 was held inShanghai as part of its ongoing activities to bring together about 800 delegates from governments


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city representatives, IT suppliers and IBM experts. The goal of the conference was to discuss thechallenges and opportunities of establishing sustainable urban development plans. For IBM, theaddressable market on its Smarter City positioning consists of IT consulting and business serviceintegration, as well as technology, hardware and software expertise. Smarter City consists ofdifferent subsystems, such as communications and IT infrastructure, water and electricity utilities,healthcare, education, and public safety. The World Trade Organization expects that, by the endof 2010, city dwellers will make up 70% of the earth's total population. Overall, the expectation isthat at least 300 million people will migrate into cities every year, especially in China, where thegovernment has established specific population migration programs as one of the initiatives tostimulate economic development. In emerging markets, such as India, China and Brazil,urbanization planning is a means to sustainable living and working conditions, as well as drivingindustrialization of the cities, while avoiding the uncontrolled development of slums andunauthorized building construction.

It was no coincidence that IBM chose Shanghai as the location for its Smarter City event. Chinastands for government-pushed development in urban development related to a strong boost ofthe economic growth, moving an annual 1% of its population from rural areas into the cities. Theefforts to drive the sustainability theme through the World Expo (Expo 2010) theme "Better City,Better Life" made this city a perfect backdrop to discuss the opportunity of IT in the context of citydevelopment. In discussions about the maturity of smarter urbanization, the fact that 60% of all

energy and carbon emissions are produced on average in urban settings left a significanttestament that the focus on those locations can heavily drive the low-carbon economy (aneconomic model based on low consumption of fossil fuels to reduce greenhouse gas emissions).Technologies and solutions that will be used to deploy stages of sustainable urban planning haveto contribute to the economical, social and environmental objectives of a city. Vendors andservice providers therefore must acknowledge and support the different goals of the buyingcenter that drive the objectives. Many of the key decision sectors, such as water and energyutilities and transportation companies, define their key performance metrics in terms of efficiencyfactors of service delivery and operational cost savings, while improving pollution levels, forinstance. Especially in emerging markets, the impact of the economic sector (e.g., investmentsinto research facilities), the validation of financial markets and of the business community andbetter-skilled knowledge workers will all play a major role in the prosperity of a city and its citizens(see Figure 2).
http://en.expo2010.cn/http://en.expo2010.cn/http://en.expo2010.cn/http://en.expo2010.cn/


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Figure 2. Objectives of Sustainable Urbanization



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2010 Gartner, Inc. and/or its Aff iliates. All Rights Reserved.

THE IMPACT

For vendors and service providers, intelligent urbanization planning provides a long-termopportunity to position their technologies, applications and services, as well as their ability to drivesignificant innovations in ecosystems or industry partnerships. The barriers to entry in addressingthe opportunities in emerging markets as well as in mature ones are quite high; most projects are

led by different buying centers and time frames, and the objectives in the sectors are diverse. Inaddition, the meaning of prosperity to a city is different than the meaning for a city government, anetworking engineer, the state-owned utility or a public services company. In many cases,vendors are initially exposed to a fact-finding mission for defining the long-term strategy of thecity, with the respective constituents of the projects. Vendors with strong capabilities inconsultative approaches and regional scale are most likely to lead those projects and theecosystems in their implementation. The result is that smaller specialist companies will still beengaged in those projects that are led by a system integrator to manage the projects efficiently.Specifically, in emerging markets where cities grow faster than in mature markets, having thecapability to run or manage an ecosystem, or having an ecosystem partner to maintain itsposition in such an engagement, is highly critical.

For example, during the last investor conference in November 2009, IBM stated that it expectscontinuous growth in revenue to be derived from what it calls growth markets (industry wouldclassify these as emerging markets), up from 19% in 2009. Following the trends in the economiccatch-up of those countries, in conjunction with the technology affinity to build high-endinfrastructure while leapfrogging generations of technology, IBM is positioning and educatinggovernment officials, mayors, city planners and the entire ecosystem of technology providers,services vendors, utilities, researchers, university deans, banks and venture capitalists about thedrivers and the best practices to succeed in such an urban development. Siemens is responsiblefor the energy management of the largest megacities in China, which is reducing the cost of theelectricity supply, but also stabilizing the reliability of the entire grid. Siemens SIS has donemultiple consulting projects to advocate and advise the holistic sustainability strategy in urban citydevelopment for cities such as London and Munich. Cisco is working closely with the SouthKorean government to design a new city in Incheon; these vendors put a lot of marketing andpositioning into those engagements with the different stakeholders to demonstrate the ROI andthe payback of those holistic frameworks.

CONCLUSION

Vendors that are planning to market and deliver within the new urbanization opportunity musthave specialists in their organizations, such as city planners or vertical experts and energyengineers, to guarantee the holistic view of the projects and their scenarios for economic,environmental and social benefits.

Vendors also must be able to analyze policies and government, state, and World Bank incentives,but also public services engagements and their impact on the development of projects. This alsoincludes the ability to deliver pilot projects and risk-sharing models. One way to assess risk is toenable new service models in which the city is offered an outsourcing opportunity formanagement of systems and services. The creation of a newly hosted or cloud-based application

environment is important to assist in the brokering of business models, such as in new energymarkets conjoined with transportation services such as context-based services or trafficcongestion management for electrical vehicles.

Because of the comprehensive sectors and business drivers for the different opportunities in thecity, it is complicated for specialized IT vendors without a sustainability portfolio, such asalternative energy, water pumps, metering infrastructure and so forth, to achieve the success in


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2010 Gartner, Inc. and/or its Aff iliates. All Rights Reserved.

the urban development market. One fact is clear: Not one vendor can close such aheterogeneous city project by itself; at a minimum, there will be IT vendors with infrastructuresolutions; vendors for business intelligence and data management; vendors to build facilities suchas roads, bridges, and buildings; and service programmers and system integrators or managedservice companies. Few companies have started to discuss sustainable urban development andsmart cities as a market opportunity with all its subsegments. Certainly, Cisco, HP, IBM, LivingPlanIT, Logica and Siemens are creating market awareness and mind share by building out theirbrand to be recognized as early innovators in the market. Although these companies havedifferent approaches, the market will tell what will be the most-viable business model and go-to-market strategy. This also will depend on how well the vendor, and its ecosystem, can serve theoperational and long-term objectives of the city. The short-term benefit for those vendors iscertainly the sale of their technology and solutions to the subsystems of the urban developmentproject, whether it is a networking solution, a cloud infrastructure, or a business intelligenceplatform. Vendors need to find the right balance between the long-term relationship in thosepartnerships, with recurring follow-up sales and additional value-added services, and short-termrevenue streams. Figure 3 summarizes the vendor mix in smart city development.


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Figure 3. Vendor Domains for Sustainable Urban Planning Projects



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RECOMMENDED READING

"Dataquest Insight: Strategic Options for Positioning Green IT in 2010"

"Dataquest Insight: IT Providers Must Build Sustainability Into The Core of Their Strategy"

"Dataquest Insight: How Vendors and IT Service Providers Need to Position 'Green' Initiatives"

"Emerging Market Analysis: Developing a Solid 2011 Market Growth Strategy in EmergingRegions"

"Building Efficiency Is Key to NYC's Sustainability Effort"

"SmarterCities Conference in Berlin: A 'Stimulus' to Action"

"Smarter Buildings Come of Age: IBM Partners With Johnson Controls To Deliver VerticallyIntegrated Facilities Management"

"Intelligent Buildings: A New Generation of Construction"

"Hype Cycle for Smart Grid Technologies, 2010"

"Hype Cycle for Sustainability and Green IT, 2010"

"The Utility of the Future: The Information Utility"

"Key Issues for Healthcare Delivery Organizations and Government E-Health Programs, 2010"

"Predicts 2010: Information Management, Governance and Security Issues Will ChallengeGovernments"

"The City and County of Honolulu: IT as an enabler, not a regulator"

"Case Study: Western Australia Police; Collaborating With the Business to Ensure ContinuousImprovement"

This research is part of a set of related research pieces. See "Sustainability for Growth: A Supply

Chain and IT Transformation" for an overview.

This document is published in the following Market Insights:

Carrier Network Infrastructure WorldwideCarrier Operations & Strategies WorldwideManaged and Professional Network Services WorldwideSecurity Solutions Worldwide


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REGIONAL HEADQUARTERS

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