Smart City Panel Reveals a Major Challenge to Implementation

By Roberta Gamble

Roberta Gamble directs the Energy & Environment team for Frost & Sullivan in North America. She works closely with major energy-related companies to guide the direction of the group. She also manages consulting projects and customized client research. Previous experience includes management of the financial and business aspects of gas turbine power plant commissioning and construction.

Oct 1, 2014 | Smart Cities | 0 comments

Smart Cities are a great, burgeoning opportunity for all manner of vendors, from broad-smart-city-wide solution providers to small single-person start ups that leverage ever increasing data from city-based sources. It’s an exciting area that some companies are even strategizing around – building a value proposition around cities instead of specific vertical industries or countries. However, this growing opportunity is not without pitfalls and challenges, no doubt more than what can fit in this blog post – however at our Frost & Sullivan Growth, Innovation, and Leadership event in Silicon Valley this month, we posed some of the top vendor concerns to cities that were on our Smart City panel. The results – granted, anecdotal – were rather surprising. Here are a few “assumptions” we’ve heard from major smart city service providers in our day to day activities, and the summarized responses from the smart city panel. Represented on the panel were CIOs and CTOs from San Francisco, Palo Alto, Portland (OR), and the state of Ohio: Assertion #1 – Since funding is always so tight in the public sector, what do cities prefer as a value proposition, something that is more comprehensive and perhaps delivered on a performance contracting basis, or a more piece-meal approach? Smart-CitiesResponse: The initial response to this question from the panel consisted of a moment of silence and a bit of blinking while the question was being processed. Not because it was difficult to understand, but because the underlying assumption – that cities are too cash-strapped for these sorts of expenditures – apparently was not accurate with the cities on the panel. Once the silence thawed, the consensus from the panel was that actually, cities have funds for this. In fact, it saves them money and time to have one vendor come and provide a more comprehensive solution across all relevant city departments rather than having numerous contracts. In the short term this may actually mean less revenue for the solution provider, however in the long term it means a stronger, and on-going, relationship with the city. The final verdict is, in short, yes funding exists, and yes make it comprehensive. Assertion #2 – If cities are willing and able to fund these programs, why aren’t they being sold at a comprehensive city-wide level? Response: Because, and this was another surprise to me, the cities on the panel are not being approached at a comprehensive level by suppliers.   As one person noted, a major IT company has an account executive sending him some emails about a defined and narrow option. Six others are talking to a number of other divisions across the city. To paraphrase our panelist “Send us an EVP with a broad value proposition and we’ll to talk about it over a cup of coffee…I’ll even buy the coffee.” Result? There is a disconnect between cities and suppliers, at least according to these cities. At least between the technically progressive cities on our panel, and broad-serving providers in the industry, companies are potentially leaving opportunities on the table. While based on a limited sample size, it is telling that some of the cities most associated with being tech-savvy do not believe they are being approached by large vendors with a consistent smart-city value proposition. I suspect the vendors reading this post will have a very different tale to tell about how their experiences with selling a smart city value proposition compares to the responses above. I’d love to hear from people from either side about their experiences, you can contact me through the information below. I’ll even buy the coffee. Roberta Gamble Frost & Sullivan Partner, Energy & Environment Roberta_gamble@frost.com

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