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In the driving seat: How service providers can monetize smart cities

August 25, 2016 - 4 Comments

Service providers (SPs) hold the key to successful smart city projects by managing the essential network connectivity. But there can be confusion over how best to monetize these ambitious initiatives.

Urbanization is at the center of 21st century life. Just over half of the world’s population lives in cities today, and that figure will grow to two-thirds by 2050. With that comes huge economic, public health, environmental and other challenges. Part of the answer lies in the creation of data-driven smart city projects that can help forward-looking local authorities deliver public services to citizens more efficiently.

The question for Service Providers is: What role does you have in driving these projects? And how can you monetize them most effectively? 

monetize smart citiesThe PPP difference

Nearly every aspect of a modern city can be improved through the use of smart technology or the internet of things (IoT). That’s everything from lighting and waste collection to policing and parking.

Most projects today take the form of public-private partnerships (PPPs), with key participants being the city, a Service Provider, and technology solution partners. These often have many moving parts. But their real value is bringing together expertise not available inside the city administration to create innovative solutions that can tackle the problems of modern urban life.

PPPs are:

  • Cost-effective way to improve access to public services for residents and visitors
  • Catalyst for additional smart city investment from businesses and entrepreneurs
  • Delivered faster and more efficiently than wholly public-owned projects

 Who does what?

Your business sits at the heart of the smart city, providing the vital network infrastructure that interconnects sensors (the ‘things’) with the data platforms and applications and end-users.

It’s all about data. That data is collected, aggregated and analyzed by solutions from technology partners to improve operations for city services, which are often directly accessible through apps by citizens themselves. This empowers them to make smarter decisions that will make their city a safer, cleaner and happier place to live in.

Monetizing the smart city

But it’s not always clear how you, as the service provider, benefit. Depending on the project, there are opportunities to:

  • Monetize the traffic over the smart city network
  • Charge for value-added smart city services such as smart lighting
  • Sell city data and analytics to app providers and businesses
  • Sell demographic data to advertisers
  • Provide endpoint security for things
  • Extend managed networks for use by business customers

The success or failure of any smart city rests on your services, which are at the beating heart of any project. With the right approach you can drive huge revenue growth, and create value for the local government, citizens and local businesses.

To drive smart city success, it’s vital to get buy-in from decision makers in local government. Create new business models that are services-based to generate recurring revenue streams. Also remember that return on investment can also be measured in environmental, social and other terms.

Finally, bring in the right tech partners to innovate your way to success and who can bring validated solutions, ecosystem partners, and proven track record of success.

Discover smart success

To see the awesome things your business can do with connectivity, check out Cisco’s Opportunities and Strategies in IoT webinar.

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  1. There are companies now starting to provide vertical offerings to support Cisco in this push to provide IOT offerings beyond their own main expertise. Cisco can’t do it all by themselves. In the Enevo case we have partnered with Cisco in some Australian cities by giving data insights into waste collection which has allowed local government to right size the contracts by measuring bin collections against real data. The federal government recently gave $50m AUD to the Smart City program which is helping the ramp up of pilots into rollouts. Dynamic car parking systems, lighting . public wi-fi , smart waste , air quality monitoring are just some of the Smart City opportunities.

  2. It is important to keep working on Smart Campus within the Smart City.The IoT must be used by educationally emerging economies to rethink its approaches to skill development.

  3. Having been working in the IoT space, I’ve yet to see any company have a solid strategy, including Cisco. Until companies are comfortable telling Wall Street that IoT programs will require smaller margins, moving the needle in a positive direction will be tough or near impossible to achieve. No one company makes all the “things”. Big and small companies will have to be comfortable taking a small piece of the pie instead of wanting the whole thing all at once.

    • Great comment and dead on. The days of high margins and in essence high stock values for the C-Suite are over if you want to have a play in IoT.