The Smart City vision is a big one and so is the global market opportunity. Smart Cities are interconnected, sustainable, low carbon cities striving to be more competitive, livable and attract more investment than traditional counterparts. The vision spans mobility, transport, buildings, infrastructure, energy and water management, security, even healthcare and governance. The market will grow to $1.5 Trillion in 2020.
Many of the biggest players are involved. IBM’s Smart City is part of their “Smarter Planet”. Microsoft calls it CityNext. Cisco is after the Internet of Everything and GE is focused on the Industrial Internet. Accenture and Siemens have formed the Omnetric. ABB, Schneider, Hitachi and Toshiba are there. Gartner has a Hype Cycle for it. Exciting young companies building innovative technology and new business models are making a big impact, too.
The fabric of Smart City is diverse and there are major opportunities in each thread. This integrated technology market is driving extraordinary M&A opportunity. Some high profile deals include Schneider’s acquisition of Invensys for $5.6B and Google’s purchase of Nest for $3.5B. Cisco paid 12x sales for startup JouleX. Marlin Equity and Toshiba each bought 2 energy management companies. Corum is in the thick of it with multiple clients and several recent closes.
Some of the dominant technology themes are:
If you are building a company capable of becoming an important thread in the smart city fabric, one that can flourish in the middle ground where sustainability and carbon friendly technologies create better living conditions, competitive and economic advantage, then you have a unique opportunity.