What happened to smart cities?

COVID-19 and cloud have overrun smart cities, for now

A question from a client spurred an internal discussion among TBR’s Professional Services, IT Services and Digital Transformation Services Team around smart cities and what the vendors we cover had been doing lately to advance what had been one of the hottest topics in 2017, 2018, 2019 and right up until March 2020 — when the pandemic and cloud seemingly drowned out smart cities.

But maybe not. Maybe smart cities just splintered into component parts until municipalities and sponsoring larger government entities can get back to large-scale, transformative projects not directly tied to public health. Maybe the underpinning technologies continued to mature, in both capabilities and adoption, so that the next couple of years will see a resurgence in smart city solutions. Maybe track-and-trace programs and vaccine rollouts have provided the test beds and built the relationships needed for investments to flow again toward smart cities. Maybe. Here’s what TBR’s Services team sees as the current state of play and what may come next:

The components never went away

If the smart cities umbrella faded as the pandemic surged, the technology components and services around them did not. IT services vendors and management consultancies continued to invest in and develop capabilities around analytics, edge computing, 5G and IoT — all key components in the smart cities ecosystem. TBR’s May 2020 Digital Transformation Insights Report: Emerging Technology, 5G described investments by Accenture, Infosys, Tata Consulting Services, Capgemini, IBM and Nokia, among others, while noting that engagement “opportunities centered on speed, connectivity and reliability help elevate 5G’s position in the crowded emerging tech market, but only if vendors can demonstrate the ecosystem will remain navigable.”

A similar report, TBR’s February 2020 Digital Transformation Insights Report: Emerging Technologies, Edge Computing — built upon three separate TBR market landscape reports covering telecom edge compute, 5G telecom and commercial IoT — commented that “embracing collaborative, edge-enabled digital transformation will benefit all parties if risk and responsibilities are shared,” reinforcing the sentiment across nearly all of TBR’s research into various technologies that ecosystem plays provided the greatest opportunities. Components, in other words, remained essential, but needed other components to be truly critical to harnessing digital transformation.  

Green trends, red tape and politics

As the pandemic fades, sustainability and standardization may provide levers to bring smart cities back to the forefront for IT services vendors and management consultancies. The Brooklyn Bridge has a new bike lane. New York City has new regulations around carbon emissions and commercial real estate. Municipalities faced with renewed interests in greening their infrastructure will look for consultancies and technology companies for help. And as federal dollars flow toward all infrastructure — brown and green — cities will look to consultancies with deep expertise in risk and compliance for assistance with standardization around what is and is not permissible around emerging technologies. One substantial caution: Priorities around which initiatives to pursue, even and maybe especially ones rooted in sustainability and standardization, remain political decisions typically disconnected from technology. Smart cities require political will, not just budgets and IT architecture.

TBR’s May 2021 Digital Transformation: Blockchain Market Landscape highlighted this confluence of political will and integrating technology components: “Contributing to the muted adoption of blockchain are many factors, including but not limited to: the outbreak of COVID-19, requiring customers to reprioritize budgets to maintain business continuity; the presence of blockchain alternatives that complement, rather than replace, existing IT environments; and a general lack of knowledge in the market, given the hype surrounding cryptocurrencies today. That being said, as consultancies continue to embark on their shepherding role to lead and manage community participants, they also must consider factors that are influencing buyers’ decisions to invest and/or purchase a blockchain solution, including: 1) solution feasibility, 2) solution integrability into existing IT environment and 3) solution accuracy.”

As always, data at the center

And then there is data, an obstacle even larger than political will but also a massive opportunity for IT services vendors and management consultancies that have been honing their capabilities around data collection, orchestration, distribution and security. Here, the pandemic may have provided technology test beds and relationship building for the vendors that participated in track-and-trace and/or vaccine rollout engagements with states and federal governments, building use cases for technology deployments within the public sector — that is, gateways to smart cities.

In 2022 TBR expects to see more announcements around smart cities, beyond the high-profile greenfield opportunities of brand-new cities or untested technologies. We anticipate vendors such as Accenture, PwC, DXC Technology and Infosys will return to investing in and marketing their smart cities portfolios, pulling together capabilities around cloud, IoT, 5G and analytics while emphasizing their roles within the larger ecosystem of connectivity, cloud and software vendors.

TBR will cover those developments across multiple reports, including our digital transformation insights reports, various telecom and cloud benchmarks and market landscapes, and sustained quarterly analysis of the most dynamic IT services vendors and management consultancies.