Cisco’s Connected Cities Look for Business Models


Turning cities into networked hubs of efficiency: that’s the motivation behind Cisco’s (s CSCO) new connected city initiative. But the business models for how cities and building owners will ultimately make their connected worlds pay off financially isn’t quite yet clear.

Wim Elfrink, Cisco’s chief globalization officer and EVP, spoke to me Wednesday at the Global Green Cities conference in San Francisco, and explained, “Our objective is to get the infrastructure in, in the right way, and then start experimenting with new business models.”

Take South Korea, where Cisco and developer Gale International are building “New Songdo,” a greenfield city center meant to showcase the best in smart urban design. Or the South Korean city of Incheon, where Cisco has been helping to network every building to manage IT systems and sensor networks, as well as monitor water, natural gas and electricity use, Elfrink said.

Cisco’s also working with home energy management startup Control4 in Incheon to display household energy use and network Control4’s energy devices to utility smart grid systems, as well as control lights, air conditioners and door locks in homes. But whether energy awareness, telepresence, home security or some combination of services will prove most popular with Incheon residents isn’t yet clear, Elfrink said.

“From a technology point of view, potentially everything is possible,” he said. “But we have to find out price points and bundles.” Some general rules apply: Cisco has seen so-called “triple play” phone-cable-Internet type offerings being the most popular, with home energy awareness and security generally taking second place, he said.

Cisco’s Incheon project has focused on using powerful routing platforms in buildings to manage these networks, but in the South Korean city of Busan, Cisco is turning to its cloud services platform. In a project announced this week, Cisco and Korea Telecom said they’ll build a platform-as-a-service (PaaS) offering to help the city develop applications for mobile platforms like smart phones.

The project intends to have “urban mobility, distance learning, energy management, and safety and security” products available by 2014. Cisco has built the virtualized data center infrastructure to manage such applications, Elfrink said, but in that case as well, “the business model is a bigger complexity than the technology.”

Other cities are trying different models, he said. Barcelona, for one, is looking at deploying a “pervasive physical network infrastructure” that links sensors, information access points and mobile devices in the city’s streets and public spaces, with a potential early focus being industrial sites set for redevelopment. Amsterdam is putting energy management systems in homes and businesses and wiring a major shopping street with smart meters and lighting control systems.

Making those types of networks pay off for cities will require a balance of meeting residents needs and delivering real cost and energy reductions, Elfrink noted. Most cities aren’t really set up to allow different city departments to use a common IT platform, let alone manage emerging platforms such as the Internet-of-things model imagined by Cisco. At some point, cities will need to think about creating a CIO-type position to manage it all, he said.

Cisco’s connected city partners include Amsterdam, Bangalore, Barcelona, San Francisco, and the South Korean cities of Incheon and Busan. Each is trying different combinations of Cisco’s technology, from networking and telepresence to its cloud services platform and emerging smart grid and smart building systems.

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Image of Songdo international business district in Incheon courtesy of Cisco.


Very interesting article. together with or instead of a CIO I would see a new role like the CSO (Chief Sustainability Officer).

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