The smart cities interview (pt2): “Those offers are hard for cities to refuse”, says Cisco
Nick Chrissos takes a breather from a packed agenda at the CityVerve ‘market-place‘ in Manchester, at the end of last month. Innovate UK has just told a conference room the CityVerve project, designed and co-funded by the UK government as the definitive UK smart city pilot, should not be attempted at home.
“If you had any sanity as a city leader, you would not look to do what CityVerve has attempted,” said Jonny Voon, digital innovation lead for Innovate UK, remarking at once on its ambition and its achievement, in a panel discussion that sought to put the work in context.
The point of CityVerve was to bring together an alliance of public and private sector agencies to come up with a smart city template that could be proven, and applied anywhere. Even besides its organisational chaos, Chrissos, the project’s director and Cisco’s head of innovation in Europe, is spinning plates. He runs seven projects in the UK for Cisco. “Some are bigger than CityVerve,” he says, across the table from Enterprise IoT Insights.
Among them, he is Cisco’s lead for the UK government’s rural 5G testbed, 5G RuralFirst, designed to make the country’s most disconnected, remote and rural communities some of the first to benefit from 5G. He is also heading Cisco’s efforts as part of the government-funded Smart Mobility Living Lab London, managed by a consortium of authorities and enterprises at the crossover of smart cites and smart transport.
The cultural exchange has been a blast, he laughs. “You know, these meetings were run like major events, with terms of reference and apologies if you can’t show up – whereas in our world, you can get a meeting with anyone in Cisco, anywhere in the world, in five minutes.” In the end, the project has delivered; its central ‘platform-of-platforms’ has provided a way to extract, integrate and regulate a myriad of data streams. The model can be replicated, anywhere, by any technology integrator.
But what city will fork out, anything, for a grandiose proof-of-concept? None, acknowledges Chrissos. In the first part of a winding three-part interview, the conversation has already sought out a new commercial model for cities. We are now stuck, rather. “Even the as-a-service model is just different financial engineering; it delivers the same software or hardware, in the end.”
Chrissos likes the paint analogy, which came up in the earlier conversation, and picks it up. He has seen it in action, he says, in the hands of a Manchester businesswoman selling office refurbishments. “She had this software for mapping inside any building, and calculating a fee for converting it into a co-working environment. Which is brilliant; every room becomes a meeting room. But it was the way she was selling it that was amazing,” he explains.
“It wasn’t one licence per user, or anything like that. She was charging developers and landlords by the square-foot. Which is how they buy paint, or cleaning services – but where one penny per square foot per month is a rounding error for a developer, £6,000 per month is a significant amount for licensing software.”
The civic-tech industry has to come up with a per-foot or per-citizen equivalent for cities’ buying new digital platforms, technologies and services, reckons Chrissos. “If there are 2.7 million people in Manchester, then the fee comes to this,” he says, lifting his hand to indicate a sizeable fee. “Of course, it doesn’t mean anything; it’s an example – cities don’t buy per-citizen. They value things differently.”
And each department within the city values things differently, and works to its own spreadsheet. How does a technology company rationalise that, so the city, at once, scratches its head, and says, ‘you know what, we’ll buy that?’
“At the moment, they don’t know this could be done; they don’t even know they could define the model for buying this stuff. If anything, the next work out of CityVerve isn’t about how much it would cost to replicate, but how it might be purchased.”
Chrissos defines the corporate methodology, as practiced at Cisco, for calculating the sense of a business transaction, based on a projected return on investment (ROI). There are three layers, he says, comprising in the first instances a ‘hard ROI’, pegged against technologies that will save or make the city money, and a ‘soft ROI’, which is harder to pin down, but brings a sense of ‘value’.
One of the stand-out use cases of the CityVerve project has been the ‘Manchester Plinth’ by local firm Sparta Digital, which uses augmented reality to bring the city’s arts and artefacts, often inaccessible to the public, to life on outside exhibition platforms. The project has resonated with the community, and helped to kindle the cold tech of the CityVerve experience. But public artworks will not pay for a city’s functional realignment.
“If you talk about the second layer, you’ll never make the deal. The plinth will make people happier about the technology, and win you votes, but it will never pay back in the same way. The deployment has to be based on this hard ROI.” Smarter bins and brighter buses make for better business cases, he says, because a slicker collection schedule, whether of the city’s rubbish or its passengers, will save the council money.
The ‘third layer’ is more profound, and where the commercial model starts to mutate. Sometimes the hard ROI has to be abstracted and distributed for it to be apparent. The CityVerve team constructed a deal for new parking infrastructure that incentivised local enterprises to shoulder some of the fee in return for a higher-rating footfall.
“Thirty per cent of cars are looking for somewhere to park; if a city can find a space for them, then it reduces traffic and pollution, and everyone’s a winner. But who pays? Where is that hard ROI? CityVerve adds a layer of intelligence – so you don’t just park the car, but park closest to your favourite shop. The city creates a growth engine into local retailers, and the shopkeeper pays for the business. You get the soft ROI, and you create a new model for the tech to be adopted.”
But these tech fixes for bins, lights, and parking are point solutions, still, albeit increasingly expansive ones, which create a costed platform for solution providers to hang additional sensors and applications off. They do not get close to a per-metre equivalent for city-wide technology solutions. “No, they don’t; they don’t crack that magic way to go to a city tomorrow and say, ‘look, this is the kit.’”
He cycles through the kinds of smart city deals being constructed in cities today, for bike-hire and street-lighting, which see providers offer infrastructure and servicing in exchange for multi-year permits and data. “The reason Mobikes is in every city in the UK is because of its commercial model.”
He adds: “Those kinds of offers are very difficult for a city to refuse.”
So how does the planet – so afflicted by waste and inequality, and so concentrated in its urban centres – find common ground between its civil servants and its business people? How does Cisco sell to Manchester?
Must cities wait for the private sector to work it out, and make gifts of infrastructure one-service-at-a-time – so when the bins are figured out, and the lights are figured out, and the cycles and buses are figured out, they find they are ‘smart’, without investing a penny?
Because connectivity provides the platform, rather than the intelligence, as the telecoms industry might advise. It’s an open platform, too. What good is hyper-connectivity to a city if it cannot access the data in the networks?
Control over data is everything for city authorities in the new technology exchange. Like with most of the over-the-top models that have changed the face of service provision, Mobikes retains charge of the mobility data it gathers in Manchester, as everywhere. “If Manchester had the platform-of-platforms when Mobikes came on board, it might have said your data is going to become my data, and it will feed my platform, and help us to plan the future.
In London, Uber has just had its licence reviewed, with probationary caveats about ‘fit-and-proper’ reform; the ride-hailing firm offered an olive branch to Transport for London in March with access to its data on traffic and travel conditions. “When Uber came to town, London said, ‘what do I have to lose?’ London thinks very differently now,” says Chrissos.
The CityVerve model gives cities total charge of data; policies are variously fixed in its platform, and data controllers can grant access and remove access, depending on prescribed rules and correct usage. “The city can expand underneath with more and more infrastructure, and on top with more and more solutions, but it is always in the middle, and it is always in control,” explains Chrissos.
“This is the time for cities to build this amazing platform in the middle, which will retain policies and requirements, and force everyone on to the top and the bottom and keep the city in the middle. This is what we believe; what CityVerve has produced is exactly what a platform like this should look like.”
Yes, but how will cities buy it? Why doesn’t Manchester buy it?
The story continues here.