4 Roles for Industry and 4 Types of Business Models
J just found a webinar by Frost & Sullivan on Smart City. Second half is a bit “IBM loaded” as one of the participants is Karen Parrish, VP Industry Solutions Public Sector IBM. Anyway – the presentation (till chart 16) gives an excellent overview of the current status of the global SC discussion.
In the introduction they said that SIEMENS just recently organized a City Conference with 29 mayors of major cities (e.g. London) to share insights on the dynamics of the eco-system Smart City. Two things I find interesting here:
a) Siemens is only one of an increasing number of technology providers that massively approaches City as a customer
b) It is a change of paradigm that cities leave their enclosure and exchange with industry.
Well, back to the webinar… I just quickly summarize what I found really interesting. Frost & Sullivan identify:
4 TYPES OF BUSINESS MODELS
Authorities independently build infrastructure and provide services. They operate and maintain the SC solutions.
Model mainly found in the Middle-East
Authorities appoint trusted planner to build infrastructure, mostly in particular area and over a defined period of time. Reason to do so is municipalities need for private finance. After completion and return on investment the operation is handed back to municipality.
Model is seen in Atlanta, done by GE
Authorities allow any qualified company to build infrastructure and provide services. The city imposes regulatory obligations!!!
Model is implemented in Amsterdam with 71 partners in approx 30 projects
City appoints a trusted partner to develop the cities infrastructure and services. This partner operates and manages the solution(s) – The City planner has no further role. According to F&S most PPP are based on that model.
Model is operated by IBM in Rio.
4 ROLES INDUSTRY CAN TAKE
Project integrators offer pre-packaged platforms, that bring together various sectors in a holistic end-to-end integration
Representatives are: IBM, Oracle, Accenture, Siemens
Network Service Provider:
NSP offer collaborative networks, data analytics and solutions that connect people, assets, systems, products by leveraging their networking and M2M capabilities
Representatives are: Cisco, Verizon, Ericsson, AT&T
Traditional product suppliers that provide hard ware that operate as main nodes of connectivity (e.g. smart meters, automated switches, voltage regulators).
Representatives are: Schneider-Electric, Siemens, Honeywell, ABB, Eaton
Managed Service Providers
The MSP do on-site consulting and offer 24/7 monitoring and management of the SC solution.
Representatives are: IBM, Serco, SAIC, Infosys
TECHNOLOGY-PROVIDERS MOVE TOWARDS THE “POINT OF CONVERGENCE”
The technology providers we see in the SC context are participants of the sectors IT, Energy & Infrastructure, Automation & Building, Security, Telecom. Although most players still have a very clear CORE competence or sector competence there obviously is a trend to “Convergence of Competition”, due to the “Convergence of Technology”. Most players move towards the “Point of Convergence” , F&S calls it, to deploy one-stop-shopping for the customer city.
So far – at least that is my impression – they are all investigating this new territory of connectivitiy on technical possibilities and intercompany activities as well as the new openness of governance. A bit strange though, as cities are probably the oldes market places one can think of!
1) Create SC stakeholder groups that controll all the various bodies and parties involved
Example: UK created a Ministry of Cities; Amsterdam created the Amsterdam Smart City Foundation
2) Encourage open collaboration (so far not a core competence of municipalities!)
Example: Chicago has open data platform and encourage entrepreneus to exploit that data and create applications
3) Build Digital Infrastructure
for Private Sector
1) Evaluate the role and position that is close to your core competence
2) Build a City as a Customer Strategy, create a specific team
3) Identify potential partnerships, business models and consortia
4) Develop capabilities in data analytics and cloud-based-services either within own or third party portfolio
5) Develop service as a business model
Take away for both sides in my understanding is to create an organisational structure that can facilitate the cross segmented approach and help materialize a Smart City agenda.