"Smart cities in Europe: Financing the commercialisation of smart city technology" - Interview with Matt Key

This summer, OC released the first in a series of white papers on smart cities, “Smart cities in Europe: Financing the commercialisation of smart city technology”. We, in collaboration with VB Research, interviewed smart cities champions and experts, including Matt Key, Commercial Director at Vodafone M2M.

On Vodafone’s work in smart cities

Vodafone has worked in
the Internet of Things (IoT) business for some time now and we find ourselves
in the fantastic position of being rated by Analysts including Analysys Mason, Gartner
and Machina Research as number one in this space at this point in time.  There is a massive opportunity here.  Our core capability is managed connectivity.  Using
our global network and our global service management platform, companies can
manage their connected devices anywhere in the world simply and easily. That’s the core of our offering, the ability to
attach devices such as cars or electricity meters and then effectively monitor, manage and
control those devices. 

One of the primary business cases for the smart city is based  on efficiency. 
If you have a certain number of assets such as buses, you can optimise
bus routes because you know where they are, where they’ve got to be, you know
how far that is, and you know what traffic issues there are. On that basis you
can feasibly improve services and/or reduce the number of buses that you need through
effective management. So there’s an efficiency business case. Another business
case is a transformative one. We have a number of customers who are really
changing the way they go to market and offer solutions to their customers by
connecting their products.  A good
example would be Kärcher, who produce the consumer jet washers and commercial fleet
cleaning solutions. In the commercial space they historically just sold a
product and customers would come back in five years when they needed a new one.
With the ability to connect their products to monitor their status, they can
effectively sell them as a service and make commercial revenue and margin through
providing a better service.

There are a number of applications for smart cities.  There are the obvious ones around the concept
of monitoring, managing and driving effectiveness of your provision of energy. And
that comes in many different layers. It could just be the very basic
opportunity to assess where your assets are and whether they are still there,
which is important in the African territories. But then increasingly, how the
asset is performing and how performance of that asset can be improved is
important. That might be waste water, the provision of water, the provision of
electricity or gas. By interpreting this information you can start to drive
quite significant value to the individual in terms of cost savings and to the
city in terms of overall business case benefits of managing the energy supply
much more effectively.

I think the second biggest area is probably transport, whether that is
the monitoring and measuring of private or public transport. Improving the
service, making sure transport is on time, anticipating traffic jams etc., this
is very much applicable to a city. Or the tertiary benefits of anticipating
where vehicles are going to be, whether there are car parking spaces, directing
vehicles to places where there are car parking spaces, rather than creating
huge congestion.

On who is most likely to
invest in IoT technologies that can be used in cities

I can very much see utility companies investing in the energy space in
cities because a utility might pay for the technology to be installed on its
network. In transport, however, you have many different types of transport
owned by many different operators.  Who
then actually funds the procurement of this? This is the crux of the smart city
issue.  The fundamental challenge of
smart cities is, unless you are a nation state or a new build, or you have a
compelling reason (and those things are always going to be sub 5% of cities on
the planet), cities are very fragmented in the way they run, procure, and
therefore offer services. So they don’t have an integrated view.

Many years ago I used to work with Siemens, and we had a concept called
the city “cockpit”.  It was about how can
you monitor the set of services for a city. So, for example, the mayor of the
city could  make the decisions around;
when to turn the street lights on or off, where to distribute the electricity
at certain times of the day , whether to turn on the security cameras..  The problem is most cities today have a very
fragmented set of services, that they own or don’t own or outsource.  That’s the fundamental challenge. 

On other use cases for IoT
technology

Vodafone also has projects in health and social care that are relevant
to smart cities.  We have customers like Diabetacare
who are delivering more sophisticated diabetes and insulin level checking
devices, which effectively anticipate an individual’s or prospective patient’s
tolerance levels.  You can alert someone
to deal with the impending issue before it happens and map it for emergency
services within that city. 

We also deploy services in hospitals to monitor assets. Most hospitals
tend to overstock devices because if they don’t have blood pressure monitors or
heart monitors they can’t provide care.  If
they know where those devices are, how they are being used and the condition of
those devices, then they wouldn’t necessarily need to have to spend quite so
much money because they can use a smaller number of devices.

Another interesting area in which we do a number of deployments is
security, whether it is camera based, perimeter based or sensing.

In cities we have a number of deployments across different verticals
including transport, energy, health and logistics. For example we can monitor
car parks for fly tipping or water pipes for water levels or leaks. These are
clever applications of quite tried and tested technology that isn’t complex to
deploy.  Many of these deployments have a
very positive business case very quickly.

When it comes to
cities, generally the city does not own the provisions of the service so most
of our case studies are actually because we have deployed that service on
behalf of a city for a private provider. 
However the real holistic benefit and the real concept of a smart city begins
when these individual services work together. 
For example, in order to build a secure transport network that is also
efficient you need to deliver capability to the police department (or whoever
the security services are) as well as to the provider of public or private
transport.

On funding for smart city
technology

I come back to the point that I made right at the start – the challenge is
unless it’s a nation state like Singapore, or it’s a new build like Dubai, or
its one or two of the cities in Kenya where there was a real social, political,
and governmental drive to make sure that these are secure, the buying centre is
fragmented. That’s an important point because often when you speak to people in
the smart city space they’ll say it’s very hard to get the sector going because
local authorities/city planners just don’t have the budgets to procure the sort
of technology in these smart city solutions. 
But actually, what we are saying is that you can make cities a lot
smarter, it doesn’t have to be actual cities themselves procuring these
solutions. Private sector companies like utilities and others  could procure them  and therefore cities will become smarter without
any cost to the city. 

Some of the service contracts that private providers have with the city
are actually configured to prevent them from implementing smart solutions. A
good example is waste collection. In the UK a lot of waste contracts are
predicated on private companies undertaking a certain number of rounds with a
certain number of lorries per month for a certain numbers of years. With this
type of contract, there is little incentive for private waste
companies to become more efficient, innovate and invest in smart solutions.
Cities should instead contract in a way that enables private sector providers
to keep any cost savings they are able to generate through innovating. This
itself would promote innovation.

We’ve recently conducted some research into this area in the UK and I
think that it’s the case that people ‘don’t know what they don’t know’.  We surveyed over 600 local councillors and
1600 citizens and 2/3 of local councillors didn’t have any knowledge of machine
to machine or the IoT, or how the technology could help improve services in
their town or their city. Nearly ¾ of citizens surveyed would support their
council’s decision to invest more in new technology to drive improved public
services. So there is a real lack of understanding of the potential of the IoT
and smart city.  But it’s clear that as
you go across every vertical from energy, to security, to transport, to health
there’s a range of applications that  can
be implemented relatively simply at relatively low cost that will completely transform
the way the city functions.

On importance of
demonstrators

Demonstrators are important because they can be the flagship project and
a reference to help people understand the concepts. They can also show how the
specific project has delivered against the business case. However, at the same
time, cities need to recognise that if they want holistic improvement – the
concept of smart for the city – then they need to think about how they drive a
more integrated approach to the services that are operated in the city, as
opposed to siloed applications around social care or health or street lighting. 

On importance of small
companies in delivering smart city technology

Vodafone works with many small companies, including start-ups.  We have a lot of investment capability, we
have a big network, we have a platform, and we connect devices. But we cannot
be the expert in everything, across every market.  Small companies are critically important for
us to partner with to allow us to be quick, innovative and agile across markets
and solution types.