I ran across an article written five years ago regarding the definition of mobility called “If Mobility was Just About Mobile Phones, It Would be Easy by Paul Lewis, global vice president and CTO of Hitachi Vantara. I contacted Paul to see if he feels the confusion of the definition still holds true. His answer, “100%!”
I believe the same holds true when we talk about “Smart City”. The Smart City multi-trillion-dollar market has become an umbrella for a lot of smarts – Smart: Healthcare, Building, Industry, Logistics, Transportation, Agriculture, IoT, and more. Each one of those smarts have a gazillion applications and products that support them. But we need a better way to define the market that will allow us to talk more specifically about the needs and discern appropriate solutions quicker. A decoder ring, if you will.
When deciding on a solution, it isn’t about catering to one type of customer. You’re about to enter the multidimensional matrix of input from groups or individuals (CIO’s, CTO’s, architects, influencers, operations, system integrators) to the solutions and solution providers, who all have different revenue/benefit reasons of why they are implementing the “Smart X”. Ouch, that made my brain hurt, so I think we may tackle that whole thing in another blog post. But developing a common language will help streamline the conversation.
Developing a common language
I’ve digested an abundance of reports, articles, and opinions. The graphic below represents buckets of opportunities and serves to illustrate how we might form a common language. Let’s look more closely at each bucket. Feedback is appreciated, so let me know what you think about this?
Verticals
Although this sounds like a slam-dunk, Smart City is a thing that’s been around for at least eight years, and consultants are still amending their reports to rearrange their market groupings. For the start of the smart city definition challenge, I harked back to my college economics classes to review and choose the naming conventions. There are vertical and horizontal markets. A vertical market has vendors who offer goods and services specifically to meet the needs of that eco-system. The tricky part is that horizontal markets have common products and services that meet the need of a wide range of buyers. Both definitions effectively describe Smart X.
There is camp that classifies the Smart X as horizontal markets because the cameras, sensors, gateways, connectivity, enclosure products make up 80% of the customer’s solution. It certainly is a strong argument. However, simplifying the market on products will cause confusion when sizing opportunities or discussing them over drinks at the next IoT event you attend.
I’m in the camp that calls Smart Municipality, Smart Healthcare, Smart Transportation, etc., vertical markets. While there are many similar solutions per “chunk” there is a prevalence of “Vertical” commonly being used. Also, maybe it’s because I’m coming at this from a business perspective – being a vendor.
Which camp are you in?
Phew – first stake in the ground, let’s call the big chunky blocks of business “Verticals.” It’s more of a needs-based definition by combining the WHO is using the WHAT, WHERE.
Sectors
To butcher the classic Shakespearean question: “To Segment or not to Segment, that is the question?” For the most part, economics deals with purchasing habits, and as I stated before, 80% of the products are common across the spectrum. However, I believe segment was too constrained of a definition. Sector helps categorize the types of business being served. If I told you I was focusing on the Utility Sector for Smart Cities, you’d have a pretty good idea of the types of applications I was referring – which brings us to Applications.
Applications
I’m going to work backwards on this one by using the Solutions to help define the title of Application. Applications are just an element of smart city, not the whole enchilada. We need to cluster common types of needs. In the example above, I used the Application Traffic Management (the same can be said for Citizens Services, Mobility, etc.) having scads of individual, but repeatable, needs [Solutions]. The application Traffic Management can splinter into dozens of known and unknown solutions, and products and services like parking, emergency response, CO2 emission analysis, etc. The title Applications is representative of the solutions needed. Applications is a common term, and so I’ve decided to adopt it in my hierarchy.
Solutions
A solution is ultimately where products and service will be packaged, or customized, to deliver on that need. In the illustration under traffic management there are many specific solutions, including; pedestrian traffic management, light signals coordination to optimize traffic, digital signage, emergency response optimization, general traffic flow and many, many more. In my sample graphic above, I used Commercial traffic, or how to efficiently get commercial vehicles to deliver packages in cities, which is estimated to be a $71B market. From here you begin to identify a slew of products. In the example, I chose tracking and management of exhaust and CO2 emissions.
Conclusion
We need to get more comfortable with specificity in the way we talk about Smart City. This is going to be an enormous opportunity for established companies like Panduit, along with start-ups looking to develop niche solutions. It’s also a great way to talk about leveraging the latest technology into solutions like 5G, sensors, and cameras, but these technologies unto themselves, they are NOT Smart City.
We are still early in the Smart City world and the more specific we are with our language, the quicker we can assess, develop solutions and support services.
I’m sure I’ll get some feedback from you that I’ve lost my mind and that there are already accepted definitions of this market. That’s ok – my attempt is to get everyone on the same page and be more specific when addressing. I’ll consider this a crowdsourcing effort.
In the next blog post, we’ll do a deeper dive on the Municipal Horizontal.
Good way to explain the “elephant”. I like “application” thought process.