#smart communities journal march 2013
TRANSCRIPT
#SmartCommunities as a hashtag reflects our belief that ICT is a key tool for
communities - regardless of their characteristics - to serve citizens more
efficiently and in a sustainable manner. Communities are defined by a
broad variety of traits; from rural or urban living spaces, permanent or
temporary membership via social networks, commercial or private
Our objective with this journal is to aggregate a selection of our analysis on
the various ICT building blocks in a #SmartCommunities network. We will
discuss the evolution of big data, cloud computing, mobile technologies,
long- and short-range network infrastructures, and their role in key industries
for the communities we live in such as health, transport, and energy. We will
also highlight key industry perspectives and government initiatives that drive
research and innovation in these areas. With all of this, we hope to give you
insight in the evolution of smart communities and in the business
opportunities behind them.
Saverio Romeo
Industry Manager, Telecommunications and Connected Public Sector
#SmartCommunities
Building Blocks in #SmartCommunities
#martCommunitiesetwork
Inside This Issue
1 #SmartCommunities
3 Verticals
10 Cloud, Networking &
Computing
12 Big Data
13 Connectivity
16 Market Views
21 Editorial Board
We are seeing a true
convergence of
industries in
#SmartCommunities.
How will ICT evolve to
adapt to this new
environment?
#SMARTCOMMUNITIES
VOLUME JAN/FEB 2013 ISSUE 1
January / February 2013
PAGE 2 #SMARTCOMMUNITIES
ICT tools are crucial for the transformation in such verticals as Healthcare,
Energy and Transportation
Regulating Mobile Health Apps in Europe, Mark Hickey
ICT achieves a Smart Energy Future, Yiru Zhong
Mobile Apps for Smart Cities and the Energy Sector, Shuba Ramkumar
Verticals
Software is increasingly becoming crucial in terms of services and
applications, but also on how those are delivered and served to the end
user. We will explore the evolution of technologies in cloud computing and
networking with a particular attention on how software is changing these
areas. In this issue, we will discuss the state of art of cloud computing in the
European public sector.
Cloud Services in the European Public Sector – Moving Beyond
Fragmented Adoption, Saverio Romeo
Cloud, Networking & Computing
Data is becoming the lifeblood of any industry. We will explore how big data
is used in relevant vertical industries for smart communities, and how big
data analytics can support business and government decision making
process. In this issue we will explore the role of customer data analytics in the
retail energy sector.
The Importance of Customer Data Analytics in the Retail Energy Sector,
Yiru Zhong
Big Data
Connectivity
The points of view of industry participants is very valuable for a better
understanding of technological and market evolution. In this session, one of
our analysts we will discuss key topics with relevant market players or will
profile companies that are performing well in market and technological
terms. In this issue, Saverio Romeo talks with Qualcomm Life about
telehealth.
The Evolution of Telehealth in Europe – The Point of View of Qualcomm
Life, Saverio Romeo
Market Views
Contact Us
Connectivity is the essential building block for smart communities. We will
explore the role of super fast broadband and mobile communications
networks. But, we will also look in great details at machine-to-machine
technologies and short-range wireless solutions. We will analyse all this from a
technological perspective and from a market perspective. In this issue, we
look at the entrance of Huawei in the M2M market.
What to Make of Huawei’s Entry into the M2M Market in Europe? Yiru
Zhong
PAGE 3 #SMARTCOMMUNITIES
Information and communications technologies (ICT) are the critical enabler
for modernizing industries and public service provision. This section considers
how this can happen. In this first issue, we look at the role of mobile
applications in the healthcare space and the associated regulatory aspects.
We then explore the role of mobile applications in the energy industry.
Verticals
By Mark Hickey, ICT Research Analyst
January 2013
Rising incidence of chronic disease, an ageing population, and financial
pressures on healthcare systems combined with a mobile penetration rate of
over 100% and relatively high income levels give Europe a unique position to
become a leading market for mobile health (mHealth) apps in the future.
Frost & Sullivan estimates that the European mobile health market will reach
€2.45 billion in 2016.
Current Regulations
Regulation of apps is a complex issue not just because Europe has different
regulatory environments at the national and the European level, but also
because it is unclear as to when a mobile app should be classified as a
medical device. At the EU level, medical devices fall under one of two
directives. The first is the Medical Device Directive (Directive 93/42/EEC) a
wide ranging directive that covers every medical device from bandages to
x-ray machines. The second is the In Vitro Diagnostic Medical Device
Directive (Directive 98/79/EC), which covers the examination of specimens
derived from the body including reagents, instruments, and specimen
receptacles. For example, reading the glucose levels of a blood sample
using a smartphone.
According to Directive 93/42/EEC medical device means;
Any instrument, apparatus, appliance, material, or other article, whether
used alone or in combination, including the software necessary for its proper
application intended by the manufacturer to be used for human beings for
the purpose of:
Diagnosis, prevention, monitoring, treatment, or alleviation of disease
Diagnosis, monitoring, treatment, alleviation, of or compensation for an
injury or handicap
Investigation, replacement, or modification of the anatomy or of a
physiological process
Control of conception
Regulating Mobile Health Apps in Europe
ICT tools enable the
transformation in such
verticals as Healthcare,
Energy and
Transportation
The European mobile
health market will reach
€2.45 billion in 2016
PAGE 4 #SMARTCOMMUNITIES
And which does not achieve its principal intended action in or on the
human body by pharmacological, immunological or metabolic means,
but which may be assisted in its function by such means. Accessories to
medical devices also fall under this regulation.
The manufacturer in this case is the app writer, not the device
manufacturer or app store. Phones marketed as communication devices
are clearly not intended as medical devices, notwithstanding the potential
impact on patient health when facilitating effective communication of
medical information, currently distributors (e.g. iTunes) are exempt from
medical device regulation.
The Grey Areas
Considering a product’s intended use in conjunction with the above
criteria should enable an app writer to decide with reasonable clarity
whether their app falls under the regulation or not. However, a grey area
has emerged in the boundary of a general ‘wellness’ app and diagnosis of
treatment or disease: under what circumstances might an app intended
for general wellness become subject to medical device regulation? For
example, if an app intended for Health and Fitness measures one’s heart
rate, it could arguably, if integrated into a diagnosis or treatment regimen,
be classified as a medical device.
Here it is important to break up medical apps into two categories. The first
is apps aimed at patients and the second is apps for medical professionals.
Apps designed for patient use are currently not evaluated for accuracy or
safety by any regulatory organization. They are made directly available to
any smartphone user without any strict criteria that would clearly distinguish
them from other apps. Sometimes apps that are described as - and are
listed in the app store - as medical include information in the description
stating that the app is intended for entertainment purposes. If patients
become reliant on apps to help them manage chronic conditions any
failures could have serious consequences. For example if an app meant to
remind users to take their medication experiences technical issues a
consequence could be the user missing a dose and triggering a medical
emergency. The benefits of establishing regulations that ensure users are
fully informed of the intended use of an app and are safeguarded against
being misled are obvious.
On the other hand, medical professionals are better qualified to make
judgments on the use of apps in a treatment regimen or as support for the
provision of healthcare. They are accustomed to new technology being
introduced into their field and can be trusted to evaluate the usefulness of
mobile apps in relation to specific conditions. However, adopting a set of
standards on things like technical specifications, definition of
characteristics, and specific criteria to ensure that a product is fit for a
purpose could be a useful point of reference for medical professionals that
operate under the same EU device regulations, but work in different
healthcare systems. A similar standard is the International Organization for
Standardization’s standard ISO 14971:2007(E), which contains requirements
that provide manufacturers with a framework in which experience, insight
and judgment are applied systematically in order to manage the risk
associated with the use of medical devices.
There is a difference in
regulatory treatment for
mobile apps targeted
at patients and
medical professionals
PAGE 5 #SMARTCOMMUNITIES
Conclusions
Providing clarity and assurance that products are fit for purpose while not
stifling the path of innovation is a difficult challenge for regulators. However,
the benefits of mHealth are to be believed, it is an issue worth addressing
almost immediately. App writers will bear the bulk of the regulatory
responsibility, but as medical apps become a bigger component of
healthcare, the regulations may require post market maintenance, version
control, surveillance, reporting of adverse events, and a system for
corrective and preventative actions. Here, app distributors and perhaps
phone manufacturers will have an important role in relaying the information
to the necessary regulatory body. While this is more work for app writers and
distributors, customers will come to expect that apps listed as medical are
safe and fit for use, and this could be viewed as an opportunity for
distributors to engage with regulatory bodies and capitalize on the
opportunity to become a trusted brand in the field.
In summary, more clarity is needed surrounding what can and cannot be
classified as a medical device. The current revision of the medical devices
directives by the European Commission offers an important opportunity for
this. As the use of mHealth apps becomes more pervasive, and the
capabilities of smartphones and tablets increase, engagement of all
stakeholders (app writers, app distributors, medical professionals, and phone
manufacturers) will be necessary to ensure that the appropriate safety and
efficacy standards are adhered to from product conception, to distribution
and consumption and post market surveillance. While this will be a
challenge to stakeholders, it can also be viewed as an opportunity to
present one’s self as a trusted and approved brand in a market that is
experiencing very promising growth.
ICT must engage in
regulatory discussions to
pave the way for
building a trusted and
approved brand in a
growing mHealth
market in Europe
By Yiru Zhong, Senior Industry Analyst
November 2012
The proportion of ICT spending has traditionally been small compared to that
of energy systems in a utility company’s assets topology. Prior to 2000, the
industry average of ICT spending was no more than 5 % of a company’s
total capital expenditure (capex) and no more than 10 % in the last 5 years.
The role of ICT, however, becomes more vital as the energy sector operates
in a world with scarce raw resources, rising costs and increasing
environmental constraints. Adding intelligence and communication links to
energy assets is the way forward - ICT is the enabler of this solution, of
connecting previously remote assets to the backbone of the grid, of adding
intelligence to previously dumb assets, and of facilitating better, proactive or
self healing decisions of energy assets. Frost & Sullivan’s ICT in Smart Energy
Research Practice predicts a growing weight of ICT spending in overall
capex, with the share rising to 15-25 % by 2030.
ICT achieves a Smart Energy future
PAGE 6 #SMARTCOMMUNITIES
Legislation drives investment certainty
The clearest and strongest driver for increased ICT investment into the
energy sector is the need to comply with legislation. This gives a certainty
in timings and scope of smart grid projects in North America and Europe,
as reflected by smart metering projects. The European Union (EU) requires
member countries to deploy smart meters to at least 80 % households by
2020, provided it is economically sensible to do so. Looking at the bigger
countries in the EU, countries such as the United Kingdom, France and
Spain have smart meter deployment trials and plans in place. Both energy
and ICT sectors base these large scale rollouts in the next 2-4 years as their
primary scenarios. Other larger countries such as Germany and Poland
currently have a less certain timescale or scope of these projects; although
the former will have a better visibility of timelines and scale by June 2013.
When more certain legislation is in place, however, the timings and scope
of smart grid projects allow energy companies to prioritise and define their
investments. One of EU’s 20/20/20 requirements is to increase the share of
energy consumed from renewables to 20 % by 2020. This pushes
Generation Companies (GenCos) to actively investigate ways to fulfil this
requirement and influences Transmission and Distribution System Operators
(TSOs and DSOs) to consider the implications of integrating this new
technology. As such, the flow of smart grid investments can be seen
mostly from GenCos, DSOs and TSOs as they explore the first phase of ICT
solutions similar to that in any green- or brown- field deployment. Follow on
ICT investments are necessary as companies consider adding more
intelligence deeper and wider energy assets until all stakeholders,
including the energy customer, are included in the grid.
Internal operational efficiencies drive innovative ICT investments
When energy companies are not compelled to make an investment, their
capex is driven by operational efficiencies. This implies different investment
priorities and thus presents a more diverse ICT opportunity. For example,
energy companies in Southeast Asia are more interested in capturing
accurate meter readings for their Commercial & Industrial (C&I) customers.
This suggests a greater emphasis on software and applications that more
efficiently read, bill and invoice a customer. While there will be a need for
communications services such as unified communications or an integrated
customer service management for a customer call center, there is limited
scope for new infrastructure rollout as could be required in Europe.
Energy systems in Japan are already highly automated and prior to the
Fukushima nuclear disaster, rarely faced generation energy storage issues.
The fallout was so significant that it changed investment attitudes
completely. For example, TEPCO now has an accelerated plan for smart
meter deployment to households. Only 1 million households have a smart
meter; TEPCO’s target is to deploy 17 million by 2022 to allow household to
see their consumption. With a greater risk of imbalance between demand
and supply post Fukushima, TEPCO now has a great appetite for wider
automation across all functions but especially at the household level. A
pressing need to enable Demand Response will boost ICT investment that
processes and utilises the greater volume of data flows across a wider
spectrum of stakeholders.
Outside of legislative
drivers, energy
companies invest in ICT
to achieve tangible
business benefits;
Customer relations
management ICT tools
in Southeast Asia and
potential for grid data
analytics in Japan
Smart grid projects with
allocated investment
funds are mostly in
smart metering
deployments because
of clear timelines and
milestones
PAGE 7 #SMARTCOMMUNITIES
Learning from the disaster, we predict the sector will actively consider a
higher density of sensors to further integrate the information flows with the
energy grid. In such an event, there will be a strong need for a secure
internet capable of processing large amount of data from sensors to
computing servers.
The future ICT architecture in Smart Energy will look very different
The different patterns of investment reflect the industry’s opinion that no one
knows what the future of smart energy will look like. We predict the energy
sector to be one of the first industries to embrace the concept of Internet of
Things. Any object that can be connected and makes sense to be
connected will be so. This ensures both energy and information flows are
processed to constantly optimise the energy grid and enables all
stakeholders to make the best possible decision. In the wider context of
#SmartCommunities, there will be interoperability with such networks as
broad as urban transport systems and as small as home area network that
manages a household’s energy, entertainment, security and
communication needs. Such interoperability implies only one thing – greater
adoption of ICT solutions.
Frost & Sullivan expects
greater application of
grid/meter data to
interact with customer
data to fully optimize
benefits of a Smart Grid
By Shuba Ramkumar, Research Associate,
February 2013
Companies and governments are realizing the importance of offering
mobile apps as a value-added, personalized service to their customers.
Mobile apps enable users to efficiently access resources, make informed
decisions, and offer valuable feedback. These tools can also help users and
providers develop a smarter city. Mobile apps have improved service,
particularly in the transportation, tourism, environmental, and public sectors.
The energy sector, which is an important component of a smart city, offers
mobile apps for integrating the end user into the grid.
Mobile apps for the Energy Sector: Empowering the end user
Energy sector customers once were unaware of details about usage,
wastage, and pricing. Today, though, utilities are investing in customer
relations management tools as customers become interested in minimizing
energy costs. Some of the most commonly used energy apps focus on
individual consumption or on how much energy electronic devices use.
Energy utilisation apps can:
• Provide visibility of consumption and usage: Calculate usage and
consumption of a household’s energy upon entering manual data from
electricity meters. These apps include Meter Readings and Wattulator. The
British Gas app and the Electric Ireland Meter Reading app allow
consumers to electronically collect and submit meter readings to the utility
to help them better understand the billing process.
Mobile Apps for Smart Cities and the Energy Sector
Mobile apps empower
the digital citizen in
#SmartCommunities
PAGE 8 #SMARTCOMMUNITIES
• Encourage habit of energy efficiency through “gaming” mentality:
Motivate customers to use energy efficiently. Some offer advice on how to
cut electricity bills, or compare energy consumption within a social
network. The Powercents app for the province of Ontario, Canada notifies
users about utility price changes and suggests shifting usage to off-peak
periods. The iGo Vampire Power Calculator details the costs of electronic
devices’ excessive energy use. People Power 1.0 and Opower’s Social
Energy App are built for social networking, so users can share, compare,
and compete based on their energy consumption data.
Extending the personal smartphone screen for Home Energy Management
solutions (HEM): Monitor energy usage of electronic devices as part of a
HEM system. These apps let users remotely control electronic devices such
as the thermostat, air-conditioning, and lighting. Control4 MyHome,
Ecobee Smart Thermostat, and Lutron Home Control+ are a few examples.
Mobile apps for the Energy Sector: Adding mobility to remote workers
Several apps cater to energy sector workers. The Energy Services Mobile App
by Enbase helps improve productivity and operational efficiency in the field.
Similar apps are available for the oil industry, including the InSite Anywhere
Mobile Service by Halliburton, which helps keep teams updated on real-time
well construction and completion processes. Numerous mobile apps help in
calculating drilling operations. Other apps provide general news about the
energy industry, such as Energy Global and Energy Intelligence, and details
about fuel and energy stock prices, such as Pricelock.
Energy providers and consumers can benefit from interactive and
informative apps. These can contribute to the overall efficiency of the
energy sector, which is important for the development of a smart city.
Mobile Apps for Smart City Citizens
Many cities are also equipped with apps for services such as transport,
participative governance, environment, and tourism. Providing these in a
user-friendly, creative platform is an important feature of a smart city.
Mobile app development is a component of several smart city initiatives in
Europe. The Amsterdam Smart City project has app developers working on
solutions for safety, mobility, energy, and tourism. The Code4EU project is
developing apps for several European cities. The Barcelona City Council has
deployed several apps developed by international IT services company Atos
as part of its MyCity solution.
Apps that promote smart cities include:
Transport service apps. These are mostly location-based apps that provide
information about navigation, real-time traffic, public transport schedules,
or parking spots. HopStop, Öffi-Public Transport Buddy, and Citymapper
help plan journeys, provide navigation options, show transport schedules
(buses, trains or taxis) and make price comparisons. Parker and m-Parking
(a MyCitysolution) help users find and pay for parking spots.
Wheelmapand similar apps have been developed to show accessibility
points for wheelchair users in underground stations, museums, cafes, and
other public spaces.
Mobile apps are
extremely common
tools for adding mobility
to business processes
PAGE 9 #SMARTCOMMUNITIES
Tourism apps. Time Travel Explorer, available in London, provides historical
information based on a user’s GPS location. The Walk and Feel app helps
visitors to Helsinki download information on history and sights as they follow
a mobile-guided pedestrian path.
Environmental apps. Pollution is a geo-local app that shows alist of
pollutants present in a user’s surroundings. NoiseMeter measures noise
levels using the microphone on asmartphone or tablet.
Participative governance apps. These help governments reach out to
citizens. Smart Recycling, an app introduced in Spain in 2012, helps users
find the nearest recycling centre, which they can share on a social
networking Website. Citizen Mailbox is a GPS-based app offered by the
Barcelona City Council to give citizens a voice in city administration.
FixMyCity and FixMyStreetlet people report local problems, such as graffiti
and broken pavements, on a mobile device.
Stakeholder apps such as those targeted at drivers and citizens.
Give feedback to drivers. Green Meter, an eco-driving app,
provides statistics on a vehicle’s fuel consumption with real-time
feedback on the environmental impact of driving.
Measure data for electric vehicles. As the electric vehicle (EV)
adoption rate rises, EV apps provided by charging station owners
and automobile manufacturers are becoming common. The Green
Charge app, compatible with the Nissan Leaf, Toyota Prius Plug-in,
and Chevrolet Volt, shows a vehicle’s battery status and informs the
driver about other financial and environmental costs. The
Chargepoint app, offered by the Chargepoint network of charging
stations, gives information on the location of stations and the status
of charging sessions, with options to make reservations.
Encourage carbon footprint reduction. In line with the European
Union climate change regulations, public institutions are
encouraging citizens to reduce their carbon footprint. The Joint
Research Centre for the European Commission has developed the
MobGAS app, which is available for 27 countries in 21 languages.
This app shows the impact of an individual’s daily activities on
greenhouse gas emissions and offers suggestions for improvement.
The market for mobile apps for smart city services is burgeoning. An
important driver for improving mobile apps of this kind is the presence of big
data. In this case, big data refers to a vast amount of collected information
including residential and commercial electricity use, fuel consumption, noise
levels, real-time traffic, and public transport.
The ability to absorb and retain real-time data to provide insight via apps is
an important value-added service. At the same time, apps can contribute
to the database of public services. Data collection on a large scale requires
industrial grade devices, such as smart meters at homes and commercial
buildings, and sensors for collecting environmental information.
Mobile apps engage
citizens. But what is the
next step? How do you
harness the vast
amount of data to
deliver improved living?
PAGE 10 #SMARTCOMMUNITIES
However, obtaining and using such data causes privacy concerns. An even
bigger challenge is the vulnerability of these systems to attacks. Stronger
regulations and investment in IT systems that protect customer privacy and
safeguard the reservoirs of data are vital.
Mobile Apps Market for Smart City Services: A Promising Future
The future of the mobile apps market for smart city services looks promising.
Numerous opportunities exist for app developers and other companies
concerned with data collection, management, and analytics. Personalized
service and increased interaction is expected to influence governmental
decisions and create new business opportunities for public/private
organizations. Efficient, information-rich environments will enhance lifestyles
and contribute to the development of a smart city.
Software is increasingly becoming crucial in terms of services and
applications, but also on how these are delivered and served to the end
user. We will explore the evolution of technologies in cloud computing and
networking with a particular attention on how software is changing these
areas. In this issue, we will discuss the state of cloud computing in the
European public sector.
Cloud, Networking & Computing
Cloud Services in the European Public
Sector – Moving Beyond Fragmented Adoption
Saverio Romeo, Industry Manager for Telecommunications and Connected
Public Sector
October 2012
Between Anxiety and Enthusiasm
More than a year ago, Neelie Kroes, Vice President of the European
Commission responsible for Digital Agenda, claimed that she wanted to
create a Cloud-friendly and Cloud-active Europe. The use of cloud
computing should bring benefits to large and small companies and
individuals. Since then, the European Commission has launched a
consultation on cloud services involving cloud solution providers, cloud users
and consumers. The consultation highlighted some key challenges such as
security, interoperability, lock-in, certification and standardization. It also
brought attention to the topic, particularly from national governments and
local authorities across Europe. Such organizations see cloud services as a
way to optimize their resources and offer better services for citizens.
At the Core of Political Agenda, but Fragmented Adoption
Despite current economic conditions and subsequent restrictions on budget,
European governments have generally tried to invest in the modernization of
public service delivery through the use of information and communications
technologies. Broadband deployment and cloud computing have been
two of the key areas in which governments have focused their efforts. The
recently launched new UK budget has placed emphasis on these two
technological areas.
PAGE 11 #SMARTCOMMUNITIES
The new Italian government has committed to the use of cloud services
across the public sector. Similar approaches are being adopted in other
European countries. Despite these efforts, the adoption of cloud services
across the European public sector is at an early stage. There are some
interesting cloud projects at national and local levels in various European
countries, but they are more single initiatives within specific government
departments rather than part of an overall strategy. Certainly, new budgets
are clearly moving towards a more systemic approach to cloud services.
The Role of European Union – Investments and Harmonization
Current fragmentation with regards to public sector demand for cloud
services is also a key reason of a new EU initiative in cloud computing in the
public sector. At the last World Economic Forum in Davos, Neelie Kroes
launched the European Cloud Partnership. The raison d’être of the
Partnership is well explained on the EU Digital Agenda webpage:
“The public sector collectively is the largest buyer of IT services in the Union,
but its impact is very limited today. More harmonization and integration of
this buying power, notably through common requirements across different
areas (e.g. eHealth, eGovernment) will bring benefits to the public sector via
new efficiency gains.”
The European Cloud Partnerships will go live in July 2012, with an initial
investment of approximately €10 million. The immediate task of the
Partnerships is to create a strong common basis for Cloud procurement for
public authorities. This Cloud procurement platform should address all the
concerns (interoperability, data security, lock in and so forth) that the
consultation strongly highlighted as barriers to the adoption of cloud
services.
The European Cloud Partnership re-emphasizes how cloud computing is a
key feature of the EU’s Digital Agenda vision. And this emphasis has been
supported by investments. Within the Seventh Framework Programme, the EU
has invested €382,925,070 in research projects in the area of cloud
computing. This effort will continue during the new research programme,
Horizon 2020.
Cloud Computing for a Radical Change of European Public Sector
It is too early for a detailed mapping of cloud service adoption in the
European public sector, but throughout the last year a strong number of
political initiatives at national level and EU levels leave few doubts that a
rapid evolution of cloud services in Europe is occurring. In fact, in the coming
years we expect rapid adoption of cloud services at all levels of public
administration in European countries. We also expect an increasing effort to
create a pan-European cloud. The Helix Nebula-the Science Cloud is an
example in that direction, while the European Cloud Partnership also follows
a similar path. It appears clear that the EU is moving towards a Single
European Cloud as main component of a Single European Information
Space. All this evolution will happen rapidly because, as Neelie Kroes
claimed in her speech in Davos:
“Cloud computing will change our economy. It can bring significant
productivity benefits to all. It promises scalable, secure services for greater
efficiency, greater flexibility, and lower cost.”
The European Cloud
Partnership has an initial
investment of around
€10 million.
Within the 7th
Framework Programme,
the EU has invested
>€380 million in cloud
related research
projects
PAGE 12 #SMARTCOMMUNITIES
Data is becoming the lifeblood of any industry. We will explore how big data
is used in relevant vertical industries for smart communities, and how big
data analytics can support business and government decision making
process. In this issue we will explore the role of customer data analytics in the
retail energy sector.
Big Data
The Importance of Customer Data Analytics in the Retail Energy Sector
By Yiru Zhong, Senior Industry Analyst
February 2013
The use of data analytics in the retail energy sector is uncommon compared
with the trends observed in the credit card and telecommunications
industries. Reasons include a lack of customer data that can be collected,
and customers’ privacy concerns. However, Frost & Sullivan believes that
2013 is the year that customer data analytics will gain a high profile through
a confluence of driving forces:
• Energy consumers will be more open to energy management services in
the current climate of rising energy costs
• Retail energy companies will be keen to prepare for customer care ahead
of a country’s smart meter rollout plans.
• The industry is seeing true convergence of information technology (IT),
communications, and industrial equipment companies to meet demands
of a smart energy future.
• Governments, regulators, and interest groups are working together to
address privacy concerns.
The Reticent Attitude towards Customer Data Analytics
Retail energy companies have been reluctant to invest in customer data
analytics because there has been no pressing business need. The energy
sector overall may have been liberalised, but it is taking its time to adjust to
competition—especially in retail. Even in countries where retail competition
is high (e.g., the United Kingdom), use of customer data analytics is low. A
low adoption also is contrary to economic theory: Customer data analytics
must be a key tool that allows energy suppliers to differentiate on non-price
factors in what is essentially a commodity product. Low adoption can be
linked to:
• No instrumentation in the home. Few parameters are being captured in
the prevailing engagement method between energy supplier and customer:
a meter for reading usage. A meter is usually outside a residence or in a
difficult-to-reach location. It may record usage in real time, but the data is
usually counted in large intervals of time (quarterly or monthly). As such, the
only necessary interaction is the energy company sending an invoice to the
consumer, and the consumer making a payment. Consumers have no other
way to measure consumption, and invoices are so outdated that there is no
incentive to change behavior.
There is recognition of
customer data
analytics benefits but
there are not enough
by retail energy
companies in Europe
PAGE 13 #SMARTCOMMUNITIES
• Customer Attitudes. Customers are wary of personal data being misused
or shared with third parties exposed to unwanted personnel. The fear of
privacy loss prompted delays of mandatory smart meter installation in the
Netherlands and the UK. Both factors must be addressed to optimise smart
grid investments. With the push to implement smart electricity meters by
2020 according to European Commission mandates, retail energy
companies are considering how they can improve consumer services
through portfolio expansion and IT and communications technologies (ICT)
investments. A smart meter’s measuring tools and sensors will help
consumers understand home energy consumption patterns.
Both factors must be addressed to optimise smart grid investments. With the
push to implement smart electricity meters by 2020 according to European
Commission mandates, retail energy companies are considering how they
can improve consumer services through portfolio expansion and IT and
communications technologies (ICT) investments. A smart meter’s measuring
tools and sensors will help consumers understand home energy consumption
patterns.
A networked home is essential to integrate consumers’ demand patterns
into the grid for more accurate, real-time balancing of electricity. Energy
consumption insights will help the consumer determine baseline energy
habits and eventually pave a way for the educated consumer buying a
bundle of energy services from the supplier.
Evolution of
#SmartCommunities
require deep
understanding of
connectivity services.
No one does that
better than the telcos
Connectivity is the essential building block for smart communities. We will
explore the role of super fast broadband and mobile communications
networks. But, we will also look in great details at machine-to-machine
technologies and short-range wireless solutions. We will analyse all this from a
technological perspective and from a market perspective. In this issue, we
look at the entrance of Huawei in the M2M market.
Connectivity
What to Make of Huawei’s Entry into the M2M Market in Europe?
By Yiru Zhong, Senior Industry Analyst, ICT Europe
October 2012
Is Huawei the Disruptive Player that the M2M Market Needs?
In September, Huawei formalised what has mainly been a reactive
approach towards the machine-to-machine (M2M) opportunity in Europe.
It announced its expansion into the region by revealing several partners
and value-added distributors, most notably Landis + Gyr, a smart meter
manufacturer. This is definitely a shift from its position of only a year ago.
Then, it was decidedly more tactical and would fulfill demand only where
there are immediate product and customer requirement alignment. If a
market entry does not guarantee Huawei a meaningful market share, it
would choose not do so. With this expectation and our opinion that the
M2M market could do with an external shock to kick start the industry,
Huawei’s entry is a net positive.
PAGE 14 #SMARTCOMMUNITIES
Huawei’s presence will spur the M2M market, just as its foray in the
telecommunications infrastructure outside of its home market triggered
deep changes in that sector, accelerated innovations in technological
applications and business models, reduced the number of players, and
more importantly, drove significant industry convergence. The equipment
vendors left standing have a much wider IT and communications portfolio
and expertise.
Huawei’s entry into the M2M market in Europe originates from its devices
business unit, where its M2M modules have already been successfully
deployed in key verticals in China. It is also clear that Huawei is betting
heavily that the telecommunications industry will be the main conduit for
moving M2M modules to the end customers; many of Huawei’s newly
announced M2M partners are in the telecommunications equipment
business or are providing communications services. With the exception of
Landis+Gyr, Huawei’s partners are also trusted brand names in the specific
M2M vertical. This is an important difference to Huawei’s M2M module
competitors – while its credibility is currently less established than many of
the module manufacturers in the market, it relies on the middlemen to
spread Huawei’s technical expertise for end customers with basic M2M
communication requirements. Furthermore, armed with a basic M2M
portfolio at this announcement, Huawei’s entry seems to be targeting,
generally, the lower end of the technology sophistication spectrum and;
thus, the lower end of M2M use cases. This will provide a shorter return on
investment for such companies in industries where the M2M benefits of
automation are less clear or even where secure M2M communications are
less severe. We expect Huawei’s portfolio to widen in coming years, but its
presence in the market is not necessarily a bad thing for the end M2M user.
Drawing parallels from the telecommunications vendor market, we can
expect the following changes in the M2M market:
1. More widespread M2M adoption. The average M2M end user will benefit
with an additional choice of M2M module manufacturer. Simple
economics suggest that this will have the inevitable downward pressure
on prices. This, in turn, will make the business case easier for risk-averse
M2M customers, whether they are in a conservative industry or whether
they are small and medium in size. In industries where legislation does
not compel one to implement an M2M solution, such as in smart
metering, a reasonable business case can be a stumbling block to an
M2M project sale.
2. Innovations in applications and business models. Huawei’s direct
competitors such as Telit, Cinterion and Sierra Wireless will be wary of
losing market share and we hope the fear will lead to accelerated
innovations in technological applications and/or business models. We
will also see an accelerated timeline for M2M module manufacturers to
expand in the M2M value chain to provide more services around M2M
SIM and even M2M application development. Additionally, we will
definitely realise an accelerated collaborative approach to partnerships
across the M2M value chain and with vertical applications’ eco-system
players.
Huawei’s M2M module
market entry will reduce
the barriers to adoption,
especially among the
SME segment
PAGE 15 #SMARTCOMMUNITIES
Beyond Huawei’s direct competitors, we are hopeful that a more urgent
sense of collaboration could also spread the application of M2M into the
realm of B2B2Cfunctionalities beyond such traditional sectors as telematics
and consumer electronics. We still do not see a more widespread utilisation
of a personal mobile device, such as smart phones or tablets, as a personal
touch point to the end customer – the idea of a connected society that
touches every citizen can then truly materialise.
3. De-fragmentisation of a disparate M2M eco-system. When we consider
both the M2M and its applications in each industry’s value chain, we still
have a rather fragmented eco-system. As more M2M players look to
expand their portfolio, we expect several more iterations of value proposition
fine-tuning. The bigger players, such as M2M telcos, must evaluate their
proposition and differentiate from not only their immediate peers, but also
other M2M players, if they want to capture M2M revenue beyond simple
connectivity.
4. The rise of M2M data analytics. We hope that the evaluation of market
positioning would accelerate the push towards monetising and utilising M2M
data and intelligence. Currently, this is an even more nascent development
within the M2M market and use cases continue to be patchy at best in M2M
verticals. We are hopeful that M2M telcos could be motivated to consider
this route as a differentiating factor to other M2M players. Similarly, we also
believe there is a role among system integrators who would be able to
enable the applications of data analytics for more accurate business
decision making.
5. The importance of security. We predict that there will be a severe security
breach that will shock the industry into becoming more vigilant in ensuring
security in an M2M world. This is not necessarily going to originate from
Huawei’s M2M modules. But we expect the move towards stripped down
M2M modules to keep costs low could lull less security conscious M2M
customers into a false sense of safety. Furthermore, as more
objects/machines are connected, a security breach becomes more likely.
Inevitable Economic Outcome – Embrace the Challenge
We welcome the presence of Huawei in the M2M modules as their first foray
in this market opportunity. Our last words are that Huawei’s entry has
sounded a warning to the market and the participants have almost a three
year response window. Just as Huawei’s telecommunications portfolio
expanded to include IT and applications, we fully expect Huawei to
compete with a wider portfolio that its traditional competitors such as
Ericsson, Alcatel Lucent, and Nokia Siemens Networks have in their M2M
proposition. If we consider an average of three years for Huawei’s new
venture to prove its strategy, there is not much time for its traditional
competitors to entrench deeper within targeted M2M opportunities.
The hope is that market
entry should accelerate
M2M innovations
PAGE 16 #SMARTCOMMUNITIES
The points of view of industry participants is very valuable for a better
understanding of technological and market evolution. In each issue, one of
our analysts will discuss key topics with relevant market players or will profile
companies that are performing well in market and technological terms. In
this issue, Saverio Romeo talks with Qualcomm Life about telehealth.
Market Views
The Evolution of Telehealth in Europe – The Point of View of Qualcomm Life
By Saverio Romeo, Industry Manager
December 2012
The telehealth market in Europe is still nascent despite the fact that all
European countries report at least small local telehealth or telemedicine
undertakings, or plan to start such pilots. According to the European
Commission’s benchmarking study, current projects mainly concern
telemonitoring applications for chronically ill patients, access to care from
remote and scarcely populated areas, exchange of patient data,
coordination of services between health and social care providers, and in
some cases, telecare provision. Apart from the pan European projects like
RENEWING HEALTH (REgioNs of Europe WorkINgtoGether for HEALTH), the
wider use of telemedicine services at the national level is still the exception.
Such initiatives can be noticed only in the Nordic countries: Denmark,
Sweden, Norway and Finland. A growing number of countries (among them
Slovak Republic, Romania and Spain) is also adopting national strategy
documents for telehealth implementation.
According to a recent study from the European Commission’s Joint Research
Centre (IPTS), Denmark, England and Scotland are the three pioneers that
have been able to integrate telehealth into standard patient treatments.
Denmark emerges as an example where good co-operation between
government and healthcare stakeholders has contributed to the integration
of personal health systems such as remote patient monitoring into
healthcare delivery. In England, there have been economic incentives, new
funding, impact assessment and political back-up to integration of health
and social care that contributed to the success of telehealth.
This nascent, but evolving, context is also driven by companies that provide
technologies to facilitate and accelerate the adoption of telehealth
solutions. Qualcomm Life is one of these. Frost & Sullivan has met Qualcomm
Life to better understand their offer for the European telehealth market.
Saverio Romeo (SR): Can you provide an overview on Qualcomm Life?
Qualcomm Life (QL): Qualcomm Life, a wholly-owned subsidiary of
Qualcomm, Inc. operates and maintains a wireless communications
infrastructure, network and service platform dedicated to the health care
community. Qualcomm Life is therefore a network and business to business
(B2B) service operator in that it allows telehealth service providers and
Qualcomm Life
prepares to take on the
nascent market that is IT
Healthcare
PAGE 17 #SMARTCOMMUNITIES
system integrators to securely develop, deploy and operate end-to-end
telehealth services and applications throughout Europe. Qualcomm Life’s
mission is to mobilize healthcare, with an objective of a world with access to
health care anytime and anywhere.
SR: At the recent International Telehealth and Telecare Conference in
Birmingham, Qualcomm Life launched the 2net™ Hub & Platform. Can you
describe the Platform and its main features?
QL: 2net is a plug and play connectivity hub of a size of a small box that can
be installed anywhere in the home of the patient, connecting medical
devices through Wi-Fi, Bluetooth, Bluetooth low energy or ANT+ radios. It
locally and wirelessly collects biometric data generated by medical devices
and transmits it through a cellular network, wherever the country of use is in
Europe, to our 2net Service Platform that aggregates and stores the data.
The main competitive advantages of Qualcomm Life is the full interactivity
between 2net Hubs deployed in the home of the patient and the Service
Platform operated by Qualcomm Life 24/7/365, allowing our customers to
significantly reduce the costs of operations of their telehealth services .
Indeed, this consistent near real-time interaction between the 2net Hubs and
the Service Platform allows us to remotely configure, upgrade and maintain
the hubs and the connectivity with the medical devices. The second
competitive advantage is the openness of our ecosystem and network. It is
available to nearly any medical or fitness device, the same for the
community of developers that can connect through documented APIs to
our service platform in order to develop and deliver to the health care
community fully tailored telehealth applications. This provides our customers
significant flexibility and adaptability to deliver the right medical device
configurations and combinations to any patient at any time in any place in
Europe, as well as being in a position, at any moment, to upgrade, modify or
improve the telehealth application’s look and feel, MMI and content,
remotely. The 2net Hub as well as the Service Platform of Qualcomm Life is
CE registered and Class I listed under the medical device directive (MDD).
SR: Qualcomm Life 2net™ was launched in the US in late 2011, can you
share some case stories that illustrate how the Platform works and benefits to
patients and doctors?
QL: One example is from one of our earliest customers, Entra Health. They
have integrated their MyGlucoHealth blood glucose monitor with 2net,
allowing patients to seamlessly send blood glucose readings to carers or
general practitioners. No longer does the patient have to take device
readings and either manually transmit them to a computer log or connect to
a hardwire to transfer data. Readings are automatically picked up from the
2net Hub, sent to the Platform and then onto a final application, device or
dashboard for monitoring or interpretation by a carer. In some cases, those
readings are also monitored by a family member, improving quality of life.
This is particularly important for a parent with a child who has Type 1 or Type
2 diabetes for instance.
Qualcomm Life’s 2net is
a plug and play
product to simplify
deployment for
healthcare practitioners
PAGE 18 #SMARTCOMMUNITIES
We officially launched our business in Europe and have customers deploying
2net and our Service Platform locally. To date, 2net has nearly 180
customers, collaborators and app developers in our 2net Ecosystem. One
example in Europe is Telbios, a system integrator and telehealth service
provider in Italy, which uses 2net Hubs and our Service Platform to provide
and deliver chronic disease patients’ medical data to several hospitals from
four different regions in Italy. The patient remains at home and 2net transfers
all of the medical data to the Service Platform that Telbios accesses to
aggregate and deliver data in the right format to hospitals for online
monitoring or alerts. Through this program, the hospitals plan to significantly
reduce their operational and readmissions costs by focusing on high risk, high
costs patients even before a critical event might occur.
SR: It is a common consensus that telehealth will change health care
systems dramatically in Europe, but the adoption of telehealth is low in
comparison to the expectations. What are the barriers to overcome in order
to accelerate the adoption of telehealth in Europe? And how 2net™ can
drive that adoption?
QL: Both patients and hospitals want and need telehealth for different
reasons. Patients want to stay at home with family members, and once he or
she gets a reliable telehealth service, the physician or carer can provide
remote monitoring to avoid exacerbations or help follow treatment
protocols. On the other hand, hospitals face greater budgetary challenges
with a reduced number of beds available. They need to reduce costs and
those often involve urgent or not urgent readmissions led by chronic disease
patients with. So many factors are coalescing for a general adoption of
telehealth for chronic disease management; but, the time required for a
significant adoption will of course vary country by country.
Qualcomm Life helps to solve several challenges limiting adoption, including
data security, privacy and interoperability of devices by the provision and
operation of a pan-European reliable, secure and confidential IT solution
dedicated to telehealth. Now, the business model supporting the
deployment and reimbursement of the hardware and service components
of telehealth needs to be decided and implemented.
What we have experienced so far is that countries that have a decentralized
and regional healthcare system where the local authorities can
independently decide budget allocations and reimbursement procedures
progress more rapidly as they work closely, directly and individually with
each group of hospitals or service providers. A good example of this is Italy,
where trials in the Veneto, Lombardy and Piedmont regions have been
reimbursed. This also allows them to rapidly put in place efficient business
models adapted to each particular group of hospitals in specific regions.
Several regions from countries like Italy and Spain already have in place
operational telehealth programs and services with over tenth thousand
chronic diseases patient managed and monitored remotely from home and
reimbursed by local social authorities. I believe the local initiatives and
programs will be key for a rapid adoption and use of telehealth. We are also
getting more visible proof from major national initiatives like 3millionlives in
the UK, which has noted decreases in mortality rates of 45% in initial trial
patients.
Qualcomm Life’s 2net
groups eco-system
partners together to
deliver new services
PAGE 19 #SMARTCOMMUNITIES
SR: 2net™ has been launched in the main European markets. What is your
go-to-market strategy and pricing model? And which are the business
models you will adopt in those countries?
QL: Our model is a B2B2B or B2B2C model. We are an enabler so we support
the telehealth service providers and system integrators in making sure they
can focus on the telehealth applications and services delivered to their end
users whereas Qualcomm Life takes care of all the challenges related to the
connectivity and data collection, transfer and storage in a service platform
that can easily be accessed by our customers and any other duly authorized
party. I have to admit that today we are directly approached by telehealth
service providers in Europe that have services up and running or in
demonstration phases but face challenges with the IT and wireless
communication infrastructure and solution put in place and want to transfer
this portion of the business to partners with the right expertise in wireless
communications and managed services. We started our operations two
months ago in Europe. We already have two key references with operational
telehealth services as customers and have been approached and are in
negotiation with several service providers, system integrators, carriers and big
pharmaceutical companies that want Qualcomm Life to power and
operate their IT and wireless communications infrastructure and network. The
pan-European connectivity we use enables us to negotiate and close deals
in any European country, both in Western and in Eastern Europe. The model
is very simple, we charge a flat monthly fee per active 2net Hub which is a
“no surprise fee” as it includes not only the wireless communications cost, but
also the integration costs of any new medical device in our ecosystem and
network, unlimited access to our Service Platform, and access to our support
services as well as any new software releases and upgrades.
SR: When do you think 2net™ can be launched in Eastern European
markets? Are Russia and Turkey under your radar?
QL: As stated previously, our 2net Hub and Service Platform can already be
deployed and used in most Eastern European countries. For Russia, the
challenge is just the hardware certification which is different from the CE
marking certification so it will require local certification. Except for seeking
regulatory certification, nothing prevents us from launching our services in
Russia or in Turkey. It will depend on the business opportunities that will arise
in the coming months.
SR: Which are the technological evolutions you envision for the Platform?
QL: Our product roadmap includes two major innovations for launch in the
coming 12 months: one software development kit or SDK that allows medical
device manufacturers to rapidly and easily integrate their device into our
ecosystem, network and Service Platform. Doing so, the “on-boarding” of
new telehealth service providers using specific or new medical devices will
not be as challenging or time consuming. The second innovation to come
soon is what we call the virtual hub which consists of porting, integrating and
having the 2net Hub available virtually on any smartphone or tablet so that
these mobile equipment devices can collect, aggregate and transfer
biometric data to the Service Platform generated by any medical device in
patients’ nearby environments.
.
Qualcomm Life’s 2net is
already deployed in
Europe. Local initiatives
and programmes will
be the main driver for
rapid adoption of
teleheath services
PAGE 20 #SMARTCOMMUNITIES
SR: In telehealth and more general in the use of information and
communications technologies in health, we are at the verge of dramatic
changes. Which is the role that Qualcomm Life wants to play in that
process? And what is Qualcomm Life doing, in technological and strategic
terms, in order to achieve that role?
QL: The answers to your previous questions help demonstrate that
Qualcomm Life is not only an enabler but also a facilitator and accelerator
for mobile health service adoption. All the investments and developments
completed by Qualcomm Life in health care pursue and support this
objective. This is also why the Qualcomm Life Fund exists. Managed by
Qualcomm Ventures, this $100 million fund is available to stimulate the
industry by investing in global companies that also support this objective - to
mobilize health care for chronic disease patients. This already impacts the
lives of 300 million people in North America and Europe and 860 million
worldwide, who can now be better managed and cared for. If we want
personalized health care in a growing aging population with chronic
disease, saturated hospitals and a shortage of carers, it is the responsibility of
companies like Qualcomm Life to leverage its knowhow in IT, cellular
technologies and managed services to make sure all these patients have a
better life, cared for and monitored remotely in the comfort of their own
homes.
Qualcomm Life: “You
can expect a SDK for
easier integration onto
our platform and
bringing in virtualization
to enable mobility into
service delivery.”
PAGE 21 #SMARTCOMMUNITIES
Adrian Drozd
Research Director
ICT Europe
Tel: +44 (0)1865 398 699
Jean-Noel Georges
Global Programme Manager
Digital Identification
Tel: +33 (0)4 93 00 61 87
Saverio Romero
Industry Manager
Telecommunications &
Connected Public Sector
Tel: +44 (0)20 7343 8367
Yiru Zhong
Industry Manager
Machine-to-Machine &
ICT in Smart Energy
Tel: +44 (0)20 7915 7822
Editorial Board