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1. The Case of SAFE and SMART Cities
November, 2012
Balaji Srimoolanathan
Principal Consultant
Aerospace, Defence & Security
1

2. AGENDA
Presentation on SAFE and SMART Cities
- Overview and Definition of SAFE and SMART Cities
- Key Trends and Concepts
- SAFE/SMART Cities of the Future
- Competitive Environment and Convergence
- Go - To Market Models
2

3. Urbanization Challenge
50% of the world’s population lives in cities today and 70% of the global population is expected to
live in urban environments by 2050
Urban
Key Drivers
population
share by Growth/ Development/ Acuteness of:
continent
– Terrorism, Crime and Emergencies
– Road congestion
– Energy consumption
– Gas emission and waste contamination
– Demographics
– …
Need/ requirement for:
– Clean water and air storage
– Effective transportation networks
Source: UN Population Division, World Urbanization Prospects
– Reliability and efficiency of energy
•50% of the worlds GDP is produced in Cities with over – Safety and Security
750k population – Connectivity and Communication
•75% of energy produced is consumed by cities
Ability and necessity to transfer current approach of urbanization
•80% of the world Co2 Emissions are from cities development to the format of Safe and Smart Cities
3

4. Why are we talking about Cities?
• Security becomes more critical as cities and their infrastructure evolve;
• Cities get bigger (urbanisation) = more and more anonymous threats;
• Increasing pressure on Local authorities to cope with expected and unexpected security
threats against citizens
• Large number of potential end-users with real budget is another key driver and a
challenge at the same time
• Technology adoption and penetration allows us to think about a connected Safe City
50% Of The Top 20 Megacities In 2025 Will Be From The Developing Countries
45 Top 20 Megacities in 2025
Top 20 Megacities in 2025
40
1.
Population (million)
35 Tokyo
6. 9. 11.Mumbai
30 2. Mexico São
City 8. Paulo 16. Delhi
25 New Shanghai 12. Osaka-
York Kobe New definition of Megacity ‘25
20
15 3. Los 18. Guangzhou
14. Beijing 17. Moscow
Angeles 10. U.N. definition
10 Buenos of Megacity ‘09
Aires
5 5. Chicago 7.Paris 15.Hong Kong 19.Seoul
4. London 20. Miami
13.Philadelphia
0
(3) (1) 1 3 5 7 9 11 13 15 17 19 21 23
Ranking based on population and GDP * Size of the bubble – GDP 2025
* Size of the bubble – GDP 2009
* Cities with current or future plans to become Safe Cities 4
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan

5. Defining Safe Cities
Safe City can be defined as: Safe City
(1) An initiative to integrate security solutions across
stakeholder groups in a given city to enhance response to
security and safety incidents…
Integrated Solutions
(2) The implementation of reliable and all-coverage security
measures to counter incidents that a city and its inhabitants +
are susceptible to…
Reliability
(3) A combination of civic partners (law enforcement, +
businesses, and residents) to maintain order and create
stability in cities by deploying advanced security systems… Centralised & Remote
Control
(4) Security concept where key entities of a city work together +
to identify and act in real-time to security threats of any
scale and time Scalable Response
Safe City is a plan to enhance public security and welfare by deploying networked security systems
across several entities in a society to optimise the necessary response from detection to action
5

6. Defining SMART vs Sustainable Cities
Smart City Sustainable City
• Smart cities are cities built on “Smart” and “Intelligent” • Sustainable cities are cities that are built on eco-friendly
Solutions and technology that will lead to adoption of basis. These may not necessarily include “intelligent”
at least 5 out of the 8 following smart parameters systems but are built more on an energy-efficient or
• Smart Energy environmental friendly objective. Sustainable Cities will
• Smart Building have 1 or more parameters of the following:
• Smart Mobility • Green energy
• Smart Healthcare • Green buildings
• Smart Infrastructure • Green mobility
• Smart Technology • Green healthcare
• Smart Governance • Green infrastructure
• Smart Citizens • Green technology
• Frost & Sullivan believes as of 2012, there is no smart • Green governance
city. We expect 26 complete smart cities in 2025. We • Green citizens
exclude smart “projects” within a city in this count – as • Frost & Sullivan research indicates there will be 92
they do not apply to an entire city sustainable cities in 2025
6

7. How SMART drives SAFE and Vice-Versa
SMART Buildings: At least SMART Mass Transport:
50% of Buildings Will be Multimodal Transport Hubs
Green and Intelligent Built Providing Excellent Air, Rail, Road
with BIPV; 20% of the Connectivity to Other Mega
Buildings Will be Net Zero ‘SAFE’
Cities.
Buildings.
SMART
Energy: 20%
of Energy
Produced in
SMART the City Will
Technology: be Renewable
Intelligent (Wind, Solar
Communication etc).
Systems
Connecting
‘SAFE’
Home, Office, SMART GRID:
iPhone and Car Infrastructure to
on a Single Enable Real Time
Wireless IT Monitoring of
Platform. Power Flow and
Provide Energy
Surplus Back to
Satellite Towns: Main the Grid.
City Centre Will Merge
with Several Satellite
SMART Cars: At least 10% of Cars
Towns to Form ONE BIG
will be Electric Vehicles. Free Fast
MEGA CITY.
Charging Stations at Every Half Mile.
Source: Google Images
7

8. Integration is the Key Enabler and the biggest
Challenge to “Creating” a Safe or SMART city
City Infrastructure
Energy Transport Communications
Safe City
Key Elements City Operators
Law Enforcers Service Providers Infrastructure
(Fire, Police, etc.) (medical, wastage, etc.) Operators
City Users
Inhabitants Visitors Businesses
(People) (People) (People & Infras.)
Implications
• It demands the procurement of new systems.
• It increases workload by sharing responsibility across different operators.
• It is a long-term commitment that is susceptible to governance chance and political agenda.
8

9. Communication Infrastructure is Critical
and is the Backbone for Scalability
Access Control, Video Surveillance Intrusion
Detection, Biometrics, Perimeter and
Occupancy Sensors, Fire Alarm Panels,
Detection Devices (Smoke/Heat/Gas/Flame),
Fire suppression, Notification and Evacuation
Energy Logistics, Distribution Physical Integrated Fire Department,
Security Police and Medical Services,
Channels (electricity, water, gas), and Safety
Utility Monitor, Heat, Lighting, Centralised and Remote
Energy Response Command and Control,
Back-Up Power, Leakage Monitor Management Management Scalable Decision Making
Universal Process
Communication
Voice/Video/Data, Audio Visual, Logical
Structured Cabling, TCP/IP/BAS Security
and Mobility Traffic Control & Monitoring
Protocols, Remote VPN Access,
Communications Management (rail, underground, buses,
Computer Logon, Network Access Building
Management personal vehicles), 24/7 Supply
Logon, Firewalls, Managed
Management (logistics)
Security Services, Mobile Security,
Security Infrastructure
Building Automation, Building Control, Networked
Systems, Crisis Management Solution (power,
infrastructure damage, evacuation)
9

10. Operating a Safe or SMART City: The Challenge of
“WHO vs HOW” – Multi – Agency Co - Operation is
Critical for Successful City Operations
The WHO The HOW
City Governance
City Operators City Operators
Law Enforcers Service Providers Infrastructure Infrastructure City Operators
Service Providers Law Enforcers
(Fire, Police, etc.) (medical, wastage,) Operators Operators (medical, wastage, etc) (Fire, Police, etc)
Centralised
Universal
Communication
Operator
City Infrastructure City Users
Citizens Response
Transport
(People) Management
Energy Mobility
Management Management
Businesses
Energy
(People & Infras.) Logical
Building
Security
Physical Management
and
City Infrastructure Communications
Security
Visitors and Safety
Communications
(People) City Users
10

11. “SMART” City Opportunities
11

12. Smart Cities Now and Tomorrow
Smart Cities Selection Current Smart Cities Mapping
"Smart Growth“ concept has emerged in the last 10–20
years driven by "new guard" urban planners, innovative Europe
architects, visionary developers, community activists 37%
North
and historic preservationists. There are many America
institutions engaged in Smart City selection, which apply >100 active 34% Middle
Asia
East
similar approach to 6 aforementioned elements, but and upcoming Pacific
6%
with different criteria. Smart City 21%
projects
Latin
worldwide America
Participator Short Different Final
2%
application listing Diagnostics Scoring
Sum-up of existing Smart City projects Worldwide spending in technologies for Smart
• Two types: “Greenfield” and “Brownfield” City programs development
$bn
• Population in size of less 1.5 millions of citizens
• Presence of major initiator (often a Grid company) About $115bn in
cumulative
• Community of different stakeholders
CAGR spending is
• Sufficient “room” for smart mobility and grid issues 30% expected during
• Proper and convenient territory allocation 2012 – 2017 period
• Government support (legal and financial)
• Set of prepared investors
12

13. Over 26 Global Cities to be “Complete” SMART
Cities by 2025 - More than 50% of Smart cities of
2025 will be from Europe and N. America
Calgary Amsterdam Copenhagen
Vancouver Beijing
Tokyo
Stockholm
Oslo Helsinki
London Berlin
Toronto Paris
Seattle Vienna
Chicago Barcelona
San Francisco New York
Los Angeles Tianjin
Wuhan Seoul Singapore
Shenzhen
Sydney
Photo Credits: Dreamstime, willgoto.com, tanamatales.com, sol-group.net
Selected Smart Cities in 2025 Source: Forbes Smart City List, Innovation City Index, Specific Smart Project Websites for
Each City, Frost & Sullivan
13

14. Selection of Worldwide Cities Engaged in
Smart Projects (listed alphabetically)
1. Amsterdam (The Netherlands) 18. Gold Coast City (Australia) 35. Recife (Brazil)
2. Ballarat (Australia) 19. Gujarat Tech-city (India) 36. Riverside (U.S.A.)
3. Besançon (France) 20. Ipswich (Australia) 37. Rotterdam (The Netherlands)
4. Birmingham (U.K.) 21. Issy-les-Moulineaux (France) 38. Shanghai (China)
5. Bottrop (Germany) 22. Jubail (Saudi Arabia) 39. Shenyang (China)
6. Bristol (U.S.A.) 23. Kalundborg (Denmark) 40. Songdo (South Korea)
7. Cape Town (South Africa) 24. Lavasa (India) 41. Sopron (Hungary)
8. Chattanooga (U.S.A.) 25. Lyon (France) 42. Suwon (South Korea)
9. Cleveland (U.S.A.) 26. Malaga (Spain) 43. Tallinn (Estonia)
10. Copenhagen (Denmark) 27. Malmö (Sweden) 44. Taoyuan (Taiwan)
11. Curitiba (Brazil) 28. Masdar (UAE) 45. Tianjin Binhai (China)
12. Dakota County (U.S.A.) 29. Moncton (Canada) 46. Toronto (Canada)
13. Dongtan (China) 30. Ottawa (Canada) 47. Trikala (Greece)
14. Dublin (Ireland) 31. Paredes (Portugal) 48. Trondheim (Norway)
15. Dublin (U.S.A.) 32. Pedra Branca (Brazil) 49. Urumqi (China)
16. Eindhoven (The Netherlands) 33. Porto Alegre (Brazil) 50. Windsor-Essex (Canada)
17. Gdansk (Poland) 34. Quebec City (Canada) 51. Winnipeg (Canada)
Source: “Getting Smart about Smart Cities” by Alcatel-Lucent (2011)
14

15. Emerging Markets which are Accessible to International
Companies have Started to Implement and/or Plan
Safe/SMART City Projects
Fast Growing Security Market with over 7 Safe City
India
Projects Announced to Begin in the Next Few Years
Successful Deployment of Safe City Concepts in Mexico City is Fostering the Interest of Other Local
Mexico
Authorities across the Country
High Growth in the HLS Domain is also Driving Authorities to
Poland Expand Security Measures to Municipalities in the Med-term
Brazil Safe City Projects Driven by the 2014 World Cup
2010 2011 2012 2013 2014 2015 (Beyond)
15

16. Safe City:
Competitive Environment
16

17. Competitive Environment – “A Fuzzy Picture”
The figure below highlights the complexities of the competitive landscape in relation to safe city
solutions but also opportunities. Competition, partnerships, and future acquisition will occur across
application and solution areas.
CNI
Defence
Defence Integrators Integrators
Public Safety
Commercial Information Technology
Integrators Security
& Building Technology
Technology Providers Network
Commercial Security
Communication Providers
Residential Residential Integrators &
Service Providers
System Integration Technology Cyber/Network
Source: Frost & Sullivan analysis.
17

18. What is Included in a Safe City and Who is
Providing it?
The range of security solutions required for a safe city solution provider is not supplied by one
single player. A selection of some of the providers below highlights the gaps that exist in product
portfolios today. Systems integrators will not always look to fill the gap.
Video Networks & Systems Data Mining &
Video Sensors C3i Cyber
Analytics Storage Integrator Analytics
IT
Defence
Telecoms
Security
Technology
Building
Technology
Network
Security
Residential
Approximately
Most
Isolated half of the Industry
No capability organisations
Examples industry has Leadership
have capability
capability
Source: Frost & Sullivan analysis.
18

19. What is Included in a Safe City and Who is
Providing it?
The following is a non-exhaustive list of organisations that are respective leaders in their field. The list is
not an indication of market share but players that have demonstrated strong security credentials and/or
public safety expertise.
Video:
Cisco, Pelco, Axis, Panasonic, Bosch, C3I:
Analytics & Integration: Sony, Toshiba, Samsung, IQinVision, AGT International, Northrop Grumman,
AGT International, ObjectVideo, Nice, Verint Lockheed Martin, L3 Communications,
Cieffe, Viasys, ioimage, Verint, Vidsys, Frequentis, Unisys, Avaya, NSN, Selex
Avigilon, Arcont Vision, Axxon Elsag, Sepura, Rohde & Schwarz,
Motorola, Siemens, Thales, EADS, Rohill,
Mer Systems, Intergraph
Next Generation: Sensors:
UAV, UAS, GIS
Safe City Solution ShotSpotter, Lenel, Harris
Network & Storage:
EMC, IBM, Nexsan, Hewlett Packard,
Services and System Integrators: Cisco, HDS, NetApp, Dell, Sun
AGT International, Cisco, Raytheon, Microsystems, Pivot3, Intransa, Vico,
Lockheed Martin, Cassidian, Thales, Kintronics, QNAP, Veracity, Avaya,
BAE Systems, IBM, Alcate-Lucent, Alctatel Lucent, Huawei, NSN,
Frequentis, Mer Group, AIS Motorola, Airware, Seupra, NEC, Fujitsu,
among others
Source: Frost & Sullivan analysis.
19

20. Safe Cities:
Go-to Market Models
20

21. Steps in City Development Initiatives
Strategy Development: Roadmapping:
• Develop vision and strategy • Pre-select initiatives on feasibility,
• Principles and technical architecture cost and sustainability
definition • Identify and attract potential
• Approach determination partners
• Program plan and legal
framework development
Projects:
Full Scale Roll-out:
• Projects, plans, business cases
• Evaluation and selection of successful
• Partner funding
initiatives and partners
• Project execution
• Result communication
• Project monitoring
• Full scale implementation support
21

22. Miscellaneous Business Models of
Smart Cities
General Motivations Big company challenge
One or several large domestic companies initiate and manage
Economic: a smart city project with the focus on their business
• Innovation and hi-tech engagement. The business model is basically based on private
company funding of the projects.
• Industrial basis support Different factors:
• New jobs and opportunities Stakeholder
balance All-sufficient environment
• Overall state competitiveness
Government Turnkey smart cities in which many elements are covered in a
very ambitious and wide ranging plan. The business model
involvement involves public-private initiatives with an important
Social: Environment contribution provided by governments or government
• Better living conditions conditions agencies.
• Improved government services Residents’
• Convenient communications mentality Specifically focused
… The projects are usually treated as independent and separate,
with little or no integration to a global smart city concept.
Sustainability: comes to four Various aspects of the smart city applications can be taken as
basis, though grid often used as starting point.
• Eco-friendly industries business models
• Smart & eco – apartments
National pride
• Prudent resource management
The project is usually led and managed by a government or
• Renewable energy
government affiliated agency. A closed ecosystem includes
• Carbon footprint reduction carefully selected companies which are in most cases
government-affiliated (or important domestic) companies.
22

23. Different Levels of Government
Involvement (Examples)
Private companies with
Government alone takes all Government work closely with
minor government
initiatives private companies
support
• Masdar City • Amsterdam • Jubail
Presidential law created a special Government in cooperation with Bechtel Group started the project to
economic zone an electric grid operator (Liander) make better use of natural gas
started a project to reduce energy resources and to develop related
• Cape Town consumption and tackle related
ecological challenges • Lavasa
Local government issued a decree Lavasa Corporation in partnership with
transforming the way local
• Birmingham Wipro plans, builds and manages ICT
government services are delivered
services
City council worked with partners
from the business, public and local • Malaga
• Suwon city
communities to stimulate Endesa company leads management
Korean Ministry of Information economic growth and inward
and Communication in over 50 partners for a project to
investment reduce energy consumption and CO2
collaboration with the Ministry of
Construction and Transportation emissions
created a task force to cope with • Dublin • Songdo City
issues related to Ubiquitous City Government cooperated with an
Gale International (U.S. real estate
(U-city) environments that will be energy agency (Codema) to
firm) and Posco (Korean steelmaker)
realized mainly in newly created reduce energy consumption and
communities CO2 emissions are backers of a project to build a new
city on a 1,500 acre man-made island
off the coast of Incheon
23
23

24. Return on Security Investment
Security Risk Strategic
Effectiveness Protection Security
Traditional Return Additional Pillars of Return on Security
on Investment Investment
Direct calculations Calculations based on Investments, Direct
based on Gains, Loss Prevention, Risk Management,
Investments and Operational Efficiencies, Cost Savings,
Gains from the Revenue Implications etc.
Investment
24

25. Where is the Return on Investment in
Security?
High
Strategic Security
Increase revenue,
reduce operating
expenses
Total Return
Risk Protection
Business continuity,
productivity, asset
Security protection, reputation
Effectiveness
Total Cost of
Ownership, Security
CAPEX, Security
OPEX
Low
Reduce Streamline Reduce Variable Costs
Fixed Costs Costs Increase Revenues
Sources of ROSI
25

26. Delivering Safe/Smart City Projects
Challenges for Municipalities and City Corporations
How will the Industry Deal with
this Squeeze?
26

27. Delivering Safe/Smart City Projects –
PPP Contract Model
Major Installations
During Core
Investment Period
Pre -Financing Annuity Financing
Operations, Maintenance and Obsolence Management
through regular monthly/quarterly/ annual payments
Investment Period (Upto 5 years)
O&M Period (20 Years)
End of Contract
27

28. Delivering Safe/Smart City Projects –
Accepting the Risk Transfer
Municipalities/City Corporations Integrator/Security Supplier
• Price risks of personal, material • Planning risks
• Changes in regulation • Effects of delay and cost overruns
• Change of legal and technical standards • Financial risk
• Costs in consequence of accidents and • Availability of facilities
vandalism
• Operation and maintenance risks
• PPP and partnering contracts offer fast replacement of old facilities to improve safety and security
• The models can be standardised and repeated, but financing needs to be adapted to the institutions
available.
28

29. The Last Word
29

30. The Challenges Associated with Cities
End Users Industry
• Budget • Revenue Opportunities
(Need to understand the ROI) (where? Who?)
• Political Aspirations • Market Positioning
(legacy vs. budget allocated) • (Integrator vs. System Supplier vs. Partnerships)
• Technology Limitations • Open Innovation
• (scalability, upgrade, maintenance)
• Value proposition
(What solutions? What price?)
30

31. Thank You
31