Cisco stumps $1bn to finance smart city projects

IT equipment giant Cisco is evidently frustrated by the pace of the smart city market, and has launched a $1bn fund to help cities get the ball rolling. Providing initial financing, in partnership with pension fund APG, Whitehelm Capital, and private equity firm Digital Alpha Advisors, Cisco is planning on securing some nice stable revenues out of these city projects – and is expanding its Cisco Kinetic for Cities platform.

Smart Cities represent a huge opportunity for tech firms looking to expand. However, cities are normally strapped for cash, especially so in the wake of the 2008 financial crisis. Many cities will be aware of the benefits that smart city tech could provide, but are unable to front the cash to get the ball rolling – and that’s where Cisco steps in.

Street lighting has been long vaunted as the perfect smart city entrance point, as the introduction of digital LED lights has provided a way to drastically cut the city’s electricity bill – as they are much more power efficient than older analog lights. In addition, the LED lights can be fitted with self-reporting technologies that can cut truck-roll and maintenance costs, letting operators know if a fault has arisen.

The city, in theory, could then reinvest this cash into other smart city projects, particularly ones that won’t generate cost savings but do have another benefit. These applications, such as environmental sensing, could be built on top of the communication networks that support the connected lighting – sweetening the return-on-investment for the city.

However, there hasn’t been as much activity in the street lighting market as one might have expected, given the industry enthusiasm for the sector a few years ago – suggesting that something is amiss with the value proposition. Cisco is hoping that its new finance offering is a way around this apparent hurdle, and in the process, boost its hardware and service sales, as well as turn a profit on those credit agreements.

Kinetic is actually a rebranded Kinetic IoT data platform, but with new features to provide public safety services. These include policy automations, for workflows and actions, as well as integrating video feeds into monitoring dashboard views, and an integration with Cisco’s Spark Collaboration tools, which will provide real-time emergency service updates for incident response.

Previously, the offering was called Smart+Connected Digital Platform, but now the Cisco Kinetic for Cities platform is looking to snare any city looking to deploy. According to the US National League of Cities (NLC), two-thirds of US cities have a plan to implement some aspect of a smart city platform, with the most common uses being smart meters, traffic management, e-governance, municipal WiFi, and RFID sensing. Over 40% apparently say they are examining the use of drones in smart cities, for monitoring, surveillance, and even marketing.

Cisco’s Jahangir Mohammed, VP and GM of IoT, says “Kinetic gets the right data to the right applications at the right time – across edge, private cloud, public cloud, and hybrid environments – while executing policies to enforce data ownership, privacy, security, and even data sovereignty laws. These are all critical requirements for any smart city and community deployment.”

As well as the funding, Cisco has designed new purchasing options for cities, which include starter packages of its Kinetic platform and equipment from its ecosystem partners – which Cisco promises will provide a ready-to-roll-out end-to-end solution for those city customers.

Cary, North Carolina, is the flagship customer, which has built a ‘Living Lab’ to explore how smart city technologies might improve its citizens’ lives. The seventh-largest municipality in the state, the 162,320 residents currently have a parking monitoring system that Cary wants to use for help with urban planning.

In a separate announcement, Cisco says that Copenhagen, Hamburg, Jaipur, Adelaide, Kansas City, and Las Vegas have all used Kinetic too – but that it is highlighting Cary as a great example of a smaller city adopting the platform. A handful of other smaller cities are also at various stages of adoption, and Cisco is partnering with Deutsche Telekom to pursue Chalkida, Greece. Cisco also points to a deal with Tennessee’s Department of Transport as a notable win with a state agency, which is using its for tolls and traffic management.

Cisco cites a number of other applications that a city might want to use Kinetic for – ranging from energy use reduction, traffic congestion management, public transport, waste management, and those public safety integrations. Notably, it is also offering revenue-share deals, where Cisco would be getting a cut of the money generated by those services, in exchange for the projects meeting targets.

“Funding is a major stumbling block for municipalities beginning their smart city transformation,” said Anil Menon, Global President of Cisco’s Smart+Connected Communities. “With our partners, Cisco will bring the capital and expertise it takes to make smart city projects a reality. Digital Alpha, APG, and Whitehelm Capital bring a fresh perspective on investment in an area that has previously been perceived as too new and, therefore, too difficult to finance.”

Kinetic is an IoT data fabric platform, that will extract data from sources, make it usable, compute data in motion, apply rules to this data, and then deliver it to the appropriate location. Cisco’s promise is to manage the process that turns a sensor reading on an edge device into something actually useful. It is being aimed at securely connecting gateways to cloud applications, and then normalizing the data they collect.

Cisco cites Navigant’s Smart City Suppliers leaderboard as proof of its merit – a report that puts Cisco in first place, followed by Siemens, Microsoft, IBM, and Huawei. After those leaders, a pack featuring SAP, Hitachi, Panasonic, NEC, Schneider Electric, Ericsson, and GE emerges, and the back of the list is populated by Oracle, Itron, Silver Spring Networks, and lastly Bosch.