FOR the last three years there has been enormous publicity surrounding the creation of new Smart Cities in Saudi Arabia and other GCC countries. Unfortunately, research into the best design and implementation strategies for the technology components in such cities is lacking. The rapid pace of advancement means that technologies that are cutting edge today will be inadequate in a decade. How can developers rapidly build a Smart City that is future-proof with no industry standards, benchmarks or proof-of-concepts available for comparison?
HP commissioned IDC to conduct in-depth research into the information and communication technology (ICT) requirements within select mega-city development projects across the region. The IDC study answered key questions about the main ingredients of Smart Cities, their main business challenges and the role of the information and telecommunications industry in reducing costs especially in tough economic times. The resulting conclusions form a white paper: “How Smart Is Your City? The How, What and Why of Smart Cities in the Middle East.”
By definition, a Smart City provides ubiquitous connectivity, future-proof broadband capacity and total wireless fidelity, with IP-enabled devices communicating and being managed through a control center, allowing tenants, residents and visitors real-time access to key information about their environment from anywhere. Within Smart Cities connectivity is considered a fourth utility – after electricity, gas and water. Smart Cities can help lower operating expenses, improve energy efficiency, increase security and safety within the city, heighten tenant satisfaction, enable countries to compete in an increasingly globalized and connected economic world and allow communities to recognize the benefits provided in terms of quality of life as they become increasingly technology savvy.
“Winning CIOs for Smart Cities are focused on both short-term cost reductions as well as supporting long-term business growth,” said John Hoonhout, MD, HP Middle East. “It’s not about spending more: best-in-class IT organizations spend about half as much as the average company on technology as a percentage of revenue. Instead, they focus on shifting their spend from operational maintenance and support to areas where they can innovate and deliver business outcomes.”
IDC noted that in the Middle East, especially in the Gulf countries, the idea of “city developments is becoming a major part of the individual governments’ diversification programs.” With financial support and land available, the Gulf countries are interested in building completely new city spaces, incorporating ICT in the design of the cities. According to IDC, such cities will offer commercial or residential tenants, “the ability to improve and optimize the effectiveness of their lives through the use of smart services and ubiquitous connectivity.”
However, IDC’s research has found that the concept of Smart Cities is not clearly defined. Worldwide there are few functional examples to turn to for inspiration and guidance. IDC commented that, “Whilst most recognize the benefits a Smart City can offer, to date, there have been a number of factors inhibiting the adoption thereof, including (amongst others): The rapid pace of construction limiting planning time; a lack of cohesiveness and clarity in terms of what a Smart City consists of; a lack of regulation; a lack of innovation from telecommunications providers; the construction procurement cycle; and a fragmented eco-system of Smart City solution providers.”
The research firm also expressed concern that while developers and Middle Eastern governments are interested in the idea of Smart Cities and realize that ICT is central to fulfilling the vision of these projects, “very few have invested the time and resources necessary to create ICT strategies with concrete plans and budgets in place to implement them. It will take commitment from governments, IT companies, property developers, and regulatory authorities to create a critical mass in terms of smart technology.”
The IDC whitepaper found that “the total investment in real estate in the region is currently most commonly estimated to lie somewhere between $1.9 trillion and $2.39 trillion. On the basis of IDC’s research and from general market feedback, IDC estimates the value of real estate projects actively in construction over the next five-year period (2008–2012) to be in the region of $2.1 trillion.” Not all of this development will have an underlying ICT component although IDC emphasized that ICT can be a strong differentiator for smart buildings, smart homes, smart communities and smart cities.
And simply because a concept is desirable does not mean that it is easily attainable. Due to a shortage of housing and commercial real estate in much of the Middle East, developers have been rapidly moving forward with projects without adequately planning for ICT implementation. IDC’s research advised that once the technology master plan for a Smart City has been developed, it should be integrated into a staged project plan, focusing on four key stages – Network, Telecom Services, City Operations Services and Value-Added Services. All must be aligned with the construction schedule.
A major hurdle as well, according to IDC, is that “the complexity and scale of a Smart City also means that no single IT provider can truly claim to be able to offer a holistic solution. Collaboration between often competing IT providers is necessary, but to date, limited collaboration has occurred and the eco-system is still very fragmented and confusing for property developers. Another big inhibitor is the telecommunications environment in the region, which is largely monopolistic and generally does not encourage open access networks and innovation in terms of value-added services. A third inhibitor is the requirement for collaboration between appliance manufacturers and IT and telecommunications companies. This collaboration is necessary to develop appliances that adhere to communications and control protocols and that are compliant and easily integrated.”
IDC pointed out that real estate companies in the Middle East have not been early adopters of ICT within their own operations. Consequently, they may not truly appreciate the potential for ICT within “Smart” developments and senior decision makers in particular may consider that it adds unneeded complexity and expense. Consultants and technology solution providers must work together to overcome this lack of vision.
“Throughout the course of our research, property developers bemoaned the fact that there is no vendor-neutral solution provider who can consult, plan, and execute a Smart City vision with sufficient resources, solutions, and financial backing to be able to manage a long-term project such as the creation of a Smart City,” advised IDC. “Multiple IT and communications providers must collaborate in order to be able to provide a holistic Smart City solution to property developers.”
As the largest technology and solutions provider in the Middle East, HP’s strategy toward Smart Cities has been developed over time by focusing on the biggest global driver — environmental sustainability — as well as through understanding the needs of key stakeholders within these developments and aligning HP’s portfolio to their requirements. The four key Smart City stakeholders HP has identified are: Municipalities, Master Developers, Law Enforcers, and Enterprises and Industry. HP has identified five key areas of focus for its Smart City solutions portfolio and has solutions sets and collaborative partnerships in place to support them. The areas of focus are: Green IT Solutions, Collaboration and Information Management, Property Management, eGovernment and Access Control, and Project and Portfolio Management.
In conclusion IDC emphasized “the sheer scale and complexity of Smart Cities mean that no single partner will be able to provide solutions for all four stages of Smart City development.” This means that developers must take the time to consider which companies have the best solutions and technologies to meet the requirements of each stage and then ICT vendors must work together for the success of the project.
“HP recognizes that in order to succeed, all stakeholders need to focus on innovation and partnerships in order to fully benefit from the opportunities that a Smart City provides,” commented Margaret Adam, IDC’s Research Manager for the Middle East and Africa Region. “IDC believes that investing in future-proof, energy efficient, and innovative solutions will pay off in the long run in terms of differentiating projects and ensuring future viability in this increasingly complex and globalized world.”
