Executive Summary: Navigant Research Leaderboard Report: Smart City Suppliers

Transcription

1 RESEARCH REPORT Executive Summary: Navigant Research Leaderboard Report: Assessment of Strategy and Execution for 16 NOTE: This document is a free excerpt of a larger report. If you are interested in purchasing the full report, please contact Navigant Research at research-sales@navigant.com. Published 4Q 2014 Eric Woods Research Director Noah Goldstein Research Director

2 Section 1 EXECUTIVE SUMMARY 1.1 Introduction The supplier ecosystem for smart cities continues to expand. Established suppliers are moving into the market from the energy, transport, buildings, and government sectors, while startups are addressing a range of emerging opportunities. This has created a complex and dynamic market. According to Navigant Research estimates, the global smart city technology market is expected to be worth more than $27.5 billion annually by 2023, compared to $8.8 billion in This represents a compound annual growth rate (CAGR) during that period of 13.5%. Cumulative global investment in smart city technologies over the decade is expected to reach $174.4 billion. As per Navigant Research s definition, a smart city is characterized by the integration of technology into a strategic approach to sustainability, citizen well-being, and economic development. The concept of the smart city covers a wide range of communities and governance models spanning from megacity regions to small towns and from historic urban centers to greenfield developments. Similarly, an incredible diversity of customers, suppliers, technologies, and requirements fall under the smart city label. This Navigant Research Leaderboard Report identifies and assesses the technology companies that are playing a leading role in the evolution of this important but complex market. 1.2 Evaluation Overview This Leaderboard Report offers an evaluation of leading players in the market that have the capacity to provide leadership on large-scale projects spanning multiple city requirements. It complements Navigant Research s Smart Cities report, which provides a deep dive into the market issues and demand drivers affecting the global smart city technology market. Technology companies included in this Leaderboard meet the following guidelines:» They are delivering smart infrastructure, IT, and communications solutions to cities.» They are able to support cities across multiple operational and infrastructure issues (notably energy, water, buildings, transportation, and government).» They have a global presence with the potential to work with cities in multiple regions. In order to establish a reasonable model for comparison across diverse suppliers, Navigant Research has excluded some sectors that also address smart city issues, including telecommunications service providers, systems integrators, municipal service providers, building service companies, and real estate developers. Navigant Research has limited the selection to companies that already have a footprint in this market. Smaller suppliers and those targeting a narrow sector of the market have also been excluded. 1

3 The criteria by which smart city suppliers are compared in this report include the following:» Strategy Criteria Vision Go-to-Market Strategy Partners Product Strategy Geographic Reach» Execution Criteria Market Share Sales & Marketing Product Performance & Features Product Integration Staying Power Detailed descriptions of each criterion are provided in the Criteria Definitions section of this report. 1.3 The Navigant Research Leaderboard Grid The smart city technology market is characterized by a diverse range of suppliers spanning many sectors, which makes a comparison of their strengths and capabilities a challenging exercise. However, such comparisons are becoming more important as city and other service providers look to select partners and technology providers to help them deliver on their smart city strategies and ambitions. IBM and Cisco have retained the Leader positions they had in the previous iteration of this Leaderboard Report. This reflects a continued commitment to city engagement, thought leadership, and product development by both companies. However, the competition in the market is becoming much more serious as cities look to deepen their supplier relationships and plan for larger-scale programs and deployments. Schneider Electric, which leads the Contenders to IBM and Cisco, is an example of a company that has significantly upped the tempo of its smart city strategy and is leveraging broader company initiatives to strengthen its smart city proposition. Microsoft is another company that stands out among a strong group of Contenders. The introduction and rapid acceptance of its CityNext program has led to a dramatic jump in its ranking, from eleventh place in Navigant Research s previous report to fifth. The company is now positioned between heavyweight infrastructure players like Siemens, Hitachi, and Toshiba as a key player in the smart city market. The appearance of Ericsson and Huawei among the Contenders reflects both the core 2

4 role of communications and IT infrastructure in smart cities and the growing ambitions of suppliers in this market. The continued attractiveness of the smart city market is shown by the addition of new suppliers to the Navigant Research Leaderboard Grid. Notable among the emerging challengers in the market are players that have built their reputation in the smart grid market; Itron and Silver Spring Networks are leading the way for other energy and smart grid players. AGT s appearance as another new entrant on the Leaderboard Grid reflects the growing focus on the role of advanced analytics in smart city applications. Chart 1.1 The Navigant Research Leaderboard Grid (Source: Navigant Research) 3

5 Section 7 TABLE OF CONTENTS Section Executive Summary Introduction Evaluation Overview The Navigant Research Leaderboard Grid... 2 Section Market Issues Market Definition Market Drivers Urbanization Sustainability Economic Development Improving the Quality of Life in Cities Market Challenges Finance Governance Challenges Citizen Engagement and Resistance Security Technology Maturity and the Skills Gap Finding the Right Standards The Market Opportunity

6 Section The Navigant Research Leaderboard The Navigant Research Leaderboard Categories Leaders Contenders Challengers Followers The Navigant Research Leaderboard Grid Section Company Rankings Leaders IBM Cisco Contenders Schneider Electric Siemens Microsoft Hitachi Huawei Ericsson Toshiba Oracle SAP ABB

7 4.3 Challengers General Electric Itron AGT International Silver Spring Networks Followers Section Company Directory Section Acronym and Abbreviation List Section Table of Contents Section Table of Charts and Figures Section Scope of Study and Methodology Scope of Study Sources and Methodology Vendor Selection Ratings Scale Score Calculations Criteria Definitions Strategy Execution

8 Section 8 TABLE OF CHARTS AND FIGURES Chart 1.1 The Navigant Research Leaderboard Grid... 3 Chart 2.1 Smart City Technology Annual Revenue by Region, World Markets: Chart 3.1 The Navigant Research Leaderboard Grid Chart 4.1 IBM Strategy & Execution Scores Chart 4.2 Cisco Strategy & Execution Scores Chart 4.3 Schneider Electric Strategy & Execution Scores Chart 4.4 Siemens Strategy & Execution Scores Chart 4.5 Microsoft Strategy & Execution Scores Chart 4.6 Hitachi Strategy & Execution Scores Chart 4.7 Huawei Strategy & Execution Scores Chart 4.8 Ericsson Strategy & Execution Scores Chart 4.9 Toshiba Strategy & Execution Scores Chart 4.10 Oracle Strategy & Execution Scores Chart 4.11 SAP Strategy & Execution Scores Chart 4.12 ABB Strategy & Execution Scores Chart 4.13 GE Strategy & Execution Scores Chart 4.14 Itron Strategy & Execution Scores Chart 4.15 AGT Strategy & Execution Scores Chart 4.16 Silver Spring Networks Strategy & Execution Scores Table 3.1 The Navigant Research Leaderboard Overall Scores

9 Section 9 SCOPE OF STUDY AND METHODOLOGY 9.1 Scope of Study Navigant Research has prepared this report to provide an analysis of the current landscape of major global suppliers addressing the smart city market. The report is intended for city leaders and managers responsible for smart city projects and suppliers seeking to understand how they fit in to the overall landscape. The major objective of this Navigant Research Leaderboard Report is to provide a timely overview of the companies involved in this market, as well as their strategy and execution in developing and marketing smart city solutions and services. Note that the company rankings capture the vendor s standing at the time of the report and are not a retrospective of past accomplishments or an indication of future success. The ratings are likely to change rapidly as this market matures and business models continue to evolve. Note that the report is not exhaustive. There are other global and smaller players in the market that were not included because of their specific focus on one aspect of the market or their lack of geographic reach. 9.2 Sources and Methodology Navigant Research s industry analysts utilize a variety of research sources in preparing Research Reports. The key component of Navigant Research s analysis is primary research gained from phone and in-person interviews with industry leaders including executives, engineers, and marketing professionals. Analysts are diligent in ensuring that they speak with representatives from every part of the value chain, including but not limited to technology companies, utilities and other service providers, industry associations, government agencies, and the investment community. Additional analysis includes secondary research conducted by Navigant Research s analysts and its staff of research assistants. Where applicable, all secondary research sources are appropriately cited within this report. These primary and secondary research sources, combined with the analyst s industry expertise, are synthesized into the qualitative and quantitative analysis presented in Navigant Research s reports. Great care is taken in making sure that all analysis is well-supported by facts, but where the facts are unknown and assumptions must be made, analysts document their assumptions and are prepared to explain their methodology, both within the body of a report and in direct conversations with clients. 48

10 Navigant Research is a market research group whose goal is to present an objective, unbiased view of market opportunities within its coverage areas. Navigant Research is not beholden to any special interests and is thus able to offer clear, actionable advice to help clients succeed in the industry, unfettered by technology hype, political agendas, or emotional factors that are inherent in cleantech markets Vendor Selection Ratings Scale The diverse nature of smart city market means there are potentially hundreds of companies that can be considered as part of this market. This Leaderboard Report necessarily focuses on a subset of suppliers that are able to lead large-scale smart city projects spanning a number of operation areas and city services. Navigant Research excludes companies that focus on one particular industry or operational area (e.g., intelligent transportation solutions or street lighting systems). All the companies included in the report operate globally. They also offer a portfolio of solutions that span at least two of Navigant Research s core smart city operational areas (energy, water, building, transportation, and government). In addition, these companies were selected to provide a cross-section of infrastructure, IT, and service suppliers. While the suppliers included in the report cover a wide range of solutions and services, Navigant Research has excluded some sectors in order to allow a reasonable comparison to be made across sectors. Telecom service providers, systems integrators, building service companies, and real estate developers are among those excluded for this purpose. The selection spans North American, European, and Asia Pacific companies. There is still considerable divergence in the types of products and solutions offered by these companies and their go-to-market strategies. Navigant Research has assessed each company in terms of its strengths relevant to its core market and to the needs of smart cities. Companies are rated relative to each other using the following point system. The ratings are a snapshot in time, showing the current state of the company. These scores are likely to be fluid as new competitors enter the market and customer requirements evolve.» Very Strong » Strong 76 90» Strong Moderate 56 75» Moderate 36 55» Weak Moderate 21 35» Weak 11 20» Very Weak

11 Score Calculations The scores for Strategy and Execution are weighted averages based on the subcategories. The overall score is calculated based on the root mean square of the Strategy and Execution scores. While this report uses the same criteria as the previous Navigant Research Leaderboard Report: (2013), the scoring has been adjusted to reflect the development of the market. This means that in some categories, a supplier may have a lower score than in the 2013 version. In particular, the scoring in this current report rewards further innovation and development by suppliers across the smart city market and in their engagement with customers and partners Criteria Definitions Strategy 9.3 Execution» Vision: Measures the company s stated goals in designing market solutions against the actual needs of customers based on the entire environment in which they will operate. Clear and compelling visions that are effectively communicated to the industry result in higher scores.» Go-to-Market Strategy: Evaluates the company's strategy for reaching the target market, including the sales and marketing channels to be used, as well as the processes established for informing the target market about brand differentiation and unique product value. Assesses specific innovations in engagements with city leaders and other stakeholders.» Partners: Measures the company's established partnerships with key organizations that will provide an advantage in financial backing, sales, business, and product development. The breadth of partnerships across the potential smart city market is assessed, as are specific partnerships to address emerging requirements and gaps in the market.» Product Strategy: Evaluates the long-term competitiveness of the product strategy as an effective solution that satisfies market requirements and meets market capacity needs. A component of this is an evaluation of the ability of the company to show innovation in product development to meet emerging market demands.» Geographic Reach: An evaluation of companies ability to reach national and international customers through networks of distributors and resellers. Scores are lower if the company does not have a sales or dealer strategy suitable for sales in multiple regions.» Market Share: Evaluates the company's current position in the smart city market as defined above, including involvement in large demonstration projects, recent sales agreements, and key customer accounts that are likely to affect sales during the next calendar year. 50

12 » Sales & Marketing: Evaluates the capabilities of the existing company sales and marketing resources, its understanding of the most suitable target markets, its understanding of the various needs of different end users, and its ability to successfully influence customer perceptions and purchases.» Product Performance & Features: Higher scores are given if the company s technology is already a proven market success or delivers unique product attributes. The maturity of its smart city solutions is also taken into account.» Product Integration: Evaluates the completeness of the company's portfolio and the level of integration of the smart city solutions. Higher scores are awarded for a common architecture and specific smart city platform offerings that have been deployed to customers.» Staying Power: Evaluates whether the company has the financial resources to support large-scale smart city projects on a global basis. 51

13 Published 4Q Navigant Consulting, Inc Pearl Street, Suite 300 Boulder, CO USA Tel: Navigant Research has provided the information in this publication for informational purposes only. The information has been obtained from sources believed to be reliable; however, Navigant Research does not make any express or implied warranty or representation concerning such information. Any market forecasts or predictions contained in the publication reflect Navigant Research s current expectations based on market data and trend analysis. Market predictions and expectations are inherently uncertain and actual results may differ materially from those contained in the publication. Navigant, and its subsidiaries and affiliates hereby disclaim liability for any loss or damage caused by errors or omissions in this publication. Any reference to a specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise, does not constitute or imply an endorsement, recommendation, or favoring by Navigant Research. This publication is intended for the sole and exclusive use of the original purchaser. No part of this publication may be reproduced, stored in a retrieval system, distributed or transmitted in any form or by any means, electronic or otherwise, including use in any public or private offering, without the prior written permission of Navigant Consulting, Inc., Chicago, Illinois, USA. Note: Government data and other data obtained from public sources found in this report are not protected by copyright or intellectual property claims. 52